|Issue:||Asia-Pacific II 2005|
|Topic:||Creating a new future for Korea|
Graham Kill is the Chief Executive Officer of Irdeto Access. He joined Irdeto first as Finance and Operations Director and later served as CFO, in 1995, becoming Chief Financial Officer of the Mindport Group in 1998. Mr Kill became Chief Executive Officer of Irdeto Access in 1998. Before that, he held management positions at USC, British Gypsum and the British Coal Corporation. Mr Kill joined the FilmNet Group as a corporate finance associate in 1993 and was actively involved in pay-TV business development initiatives and various acquisitions and financing transactions. Mr Kill holds an MBA from the Rotterdam School of Management and an Engineering degree from the University of Nottingham. He is a registered European Engineer and chartered Engineer in the UK.
While many wonder if mobile television will become popular given the phone’s tiny screen, Korea has gone ahead to test it. Korea’s new satellite direct-to-mobile, DMB service, offers TV, radio and data content. The DMB launch took place 1st May, and the 20,000 handsets sold in the first two weeks show it will succeed. Some predict it will change the world of entertainment. ‘Prime time’ will no longer be between 7p.m. and 9p.m., but anytime the consumer wants.
There has been much talk about mobile television around the world. While some people argue that mobile TV will catch on only if there is a population of people with pin-sized heads happy to watch images on pin-sized screens, others predict that it will be the springboard for a new world order in entertainment. Underlying all this is an agreement that mobile TV just might take-off, if the service is packaged correctly and if affordable handsets are available for consumers. While a number of trials are taking place across the globe, South Korea has turned heads by decisively launching a commercial mobile TV service called Satellite Digital Multimedia Broadcasting (DMB), which is likely to forever change the lifestyles of South Koreans, who are already one of the world’s biggest pool of early adopters. South Koreans are not only leading the way as early adopters of this new and exciting technology, but are also breaking ground in the vital areas by developing mobile TV regulations, business models, mobile-specific content and new technologies. South Korea’s first satellite DMB service began commercial operation on 1st May, kicked off by a mobile-only channel, ‘Channel Blue’, the first program broadcast over satellite DMB. Korea’s first satellite DMB service is an initiative by TU Media, the appointed national satellite DMB operator. TU Media is a consortium consisting of 150 companies, led by SK Telecom. It will provide technology and various forms of content such as television, radio and data, through its pay multi-channel broadcast service. In the initial stages, a total of 27 channels will be provided, including seven TV channels and 20 radio channels. Although SK Telecom has already over 2 million 3G customers, it decided to use DMB-S because of the unique ability of this new broadcast technology to scale to many millions of users, something the unicast 3G service is far less suited to do. To date, TU Media has garnered a lot of publicity for its new mobile TV service. First, because it’s regarded as the world’s ‘first’ pay TV broadcast service targeted at mobile phones and other mobile devices. Secondly, because of the significant regulatory issues that TU Media had to overcome before launch. There is a lot to watch and learn from the South Korean experience, and it will be interesting to watch as the South Korean Broadcasting Authority’s and TU Media’s carefully planned initiative strives to reach the success it envisions. If the service’s first two weeks of commercial operation are any indicator, then the answer is a resounding ‘yes!’. Shops have already sold more than 20,000 handsets, with only two handset models available and with some of the terrestrial channel agreements still to be finalised. An additional 17 handsets, PDAs and in-car devices already scheduled for release will appeal to even more consumers. Samsung started with its SCH-B100 phone, and plans to unveil a series of new models in coming months. LG Electronics, SK Teletech and more than a dozen other vendors are aggressively following with their own models. These handsets are a clear indication of the consumer experience made possibly by satellite DMB technology. They offer a new type of technology convergence, where multimedia digital broadcasting, mobile communications and wireless Internet can be accessed on one device while on the go with a camera and MP3 player usually accompanying the device for an ‘all-round’ multimedia experience. Take-out TV and It’s Digital Essentially, the satellite DMB service enables subscribers to access multi-channel, high-quality multimedia broadcasting such as television, radio and data broadcasting while on the move. More importantly, the service will trigger a revolution centred at the consumer level. In an era where content is going from analogue, static and physical to digital, mobile and virtual consumers will watch and listen to what they want to, where they want to and at any time they want, on any device. Consequently, ‘prime time’ will no longer be at the traditional timeslot between 7p.m. and 9p.m. It will be anytime the consumer wants it to be, with new peaks anticipated during morning and evening, commuting hours and lunch breaks. Short programmes of 20 minutes or less will be provided in order to match the characteristics of satellite DMB viewing, i.e. the audience will watch programming for only short periods. Programmes with various formats will be added to differentiate the service, such as five-minute animations every hour. The new prime times will also create new opportunities for advertisers. The programming mix will be quite different from traditional TV. While major programmes will be an hour long, live shows will cover specific news topics chosen by the viewer. Consumerism in South Korea will change as well. Because satellite DMB combined with the CDMA network can provide various interactive services instantly, vendors can offer users new mobile shopping experiences and large-scale opinion polls can be conducted instantaneously. Satellite DMB also offers several advantages as a platform for public service. Because signals originate from a satellite, and not from an earth station, the satellite DMB service is ubiquitous and available to people in all areas. This means that the government can use it as an effective medium for emergency announcements during calamities and natural disasters. It can therefore help save properties and lives by broadcasting effective information when the current terrestrial broadcasting services or communication networks are not available. The social dynamics of South Korea may change forever if the adoption of this new technology reaches the expected levels and DMB terminals become a ubiquitous, useful, everyday device. Interestingly, the South Korean government is investing US$8 million to subsidise terminals and subscription fees to drive adoption of the service. New economic pillar in bloom In addition to the social impact, satellite DMB is expected to bring a positive economic impact to South Korea as well. For one, its already strong national image, as a technologically advanced country will be enhanced and it will contribute new technologies and standards to similar services worldwide. However, as consumers are in the driver’s seat, traditional business models for service and content providers may no longer work. As such, South Korea has undertaken special efforts to support the service and content providers. The government will invest more than US$700 million over the next five years in the development of new content for the service, in subscription charges to programme providers to maintain a smooth supply of content, in general promotion of the service and in a subscriber media centre. All the dedicated mobile channels will feature new content, and all new programming will be outsourced to contribute to the development of the local production industry, especially independent companies, thus opening up thousands of jobs for South Koreans. Over 20 independent producers have been commissioned to create new and diverse satellite DMB content of the type never before attempted. The satellite DMB industry will have far-reaching effects on associated industries and job creation because the DMB value chain includes infrastructure and hardware manufacturers, service and content provisioning systems, mobile terminals and retail distribution outlets. In addition to domestic economic development, South Korea is more than aware that it will have a head start in the world’s DMB market and may have the opportunity to emerge as the leader in the digital broadcasting market, as it will likely gain economically in exporting the satellite DMB business to overseas markets. The permutations and possibilities that TU Media’s satellite DMB service opens up are immense, but the impact is clear and resonant. Satellite DMB will completely alter the social life of South Koreans, change business and regulatory models and, at the same time, build a new economic pillar for South Korea as it leads the world in the new age of mobile TV.