ASIA-PACIFIC BROADCASTING

The IPTV market in South Korea is expected to grow in the next three years but competition from traditional media, including cable TV, remains a challenge, according to an analyst of market consultancy firm Ovum Korea.

Sangyun Han told APB that IPTV subscribers in South Korea are expected to grow to 3.47 million and total revenue volume will be at US$314.17 million by 2012. These represent a compounded annual growth rate (CAGR) of 25% and 58%, respectively.

Han said the number of subscribers has been growing steadily from end-2007, which was at 1.13 million, and 1.55 million by the end of 2008, despite the fact that IPTV service providers have not been aggressively marketing their services.

He said that a well-penetrated and advanced broadband environment is one of key factors driving the growth of IPTV in South Korea where there were 15.5 million broadband subscribers as of the end of 2008.

“This equates to a 92.6% household penetration rate, which is among the highest in the world,” Han added. “[The] proportion of broadband subscribers using over 50Mbps offerings are approximately half of total broadband subscribers in South Korea, which I believe is fundamental for the IPTV growth. The proportion, though, needs to be expanded going forward.”

Other factors that could boost growth include real-time retransmission of terrestrial TV programmes and bundled service of IPTV.

However, growth of the IPTV market in broadband-dominant South Korea is going to be an uphill battle. IPTV is currently facing stiff competition from cable TV which has already reached 15.2 million subscribers as of end-2008 and is competitive because it offers more content at a cheaper price.

“IPTV, as a new media, needs to create new customers’ demand and/or to compete with other media like cable TV,” said Han in an e-mail response to APB.

“As IPTV service providers reinforce their content and pricing system, competitiveness will increase in the future.”

According to Ovum Korea figures, among the major players in South Korea are SK Broadband, which has acquired 780,000 subscribers since its commercial launch, and Korea Telecoms (KT) and LG Dacom, both of which have gained 770,000 and 80,000 subscribers, respectively as of January 2009.

Of these players, Han said: “I think all of the IPTV service providers take similar position at the moment, because the market is at the early stage now.

“Nonetheless, I think KT has more successful factors because it has concentrated on IPTV services more than others. Also, KT takes the best position to provide marketing activities through bundled offerings as the KT-KTF (KT Freetel) merger [just this year] was approved by the government.”

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