By Kim Tong-hyung
Staff Reporter
Internet protocol television (IPTV) was touted as the next big thing in telecommunications and household entertainment. But three months after the lavish baby shower, the industry has yet to show signs of becoming a towering market after growing out of its infancy.
According to the country's three IPTV operators ― KT, SK Broadband and LG Dacom ― about 210,000 Koreans get their television through broadband Internet networks, growing by around 50,000 subscribers per month.
The growth trajectory is flatter than that of other pay-TV services such as digital cable, and the government target of having 2 million IPTV users by the end of the year seems way off.
KT, which began real-time television broadcasts on its Mega TV network in November last year, has about 150,000 IPTV customers. LG Dacom's myLGtv service has about 50,000 subscribers, while SK Broadband has just around 12,000 customers for its Broad & IPTV service.
The fixed-line operators had hoped that IPTV would allow them to get more from their broadband investments. IPTV, or the delivery of television services over broadband networks, provides viewers with a wealth of interactive features, including video-on-demand (VOD), e-commerce and other data services on top of conventional television programming.
However, competing in what is already a saturated pay-TV market, with more than 15 million households signed to cable television, is proving to be a difficult challenge.
And many of those who did make the leap of faith to IPTV now complain that they are paying a premium for a service that lacks in content.
Even when counting VOD-only customers who don't use IPTV to watch national television, the IPTV market looks unimpressive.
When adding the VOD customers, KT has about 700,000 Mega TV subscribers, which is actually 120,000 less than it had before beginning the real-time broadcasts. SK Broadband has about 780,000 IPTV customers when counting VOD subscribers, but the number represents stalled growth.
The only company that is having any success is LG Dacom, which has a combined 110,000 customers for its VOD and real-time television services, about 60,000 more than it had at the end of last year.
``We are losing customers because many subscribers are not converting to paid services after their free trials end, and difficulties in securing quality channels don't help either,'' said a KT official.
The slow start for IPTV is certainly a concern for policymakers, who pressured telecommunications companies to strengthen their investment in a sector they thought of as the prince of the ``converged era,'' as the boundaries between telecommunications and broadcasting continue to blur.
However, it remains to be seen whether IPTV doesn't follow the path of WiBro, another hyped technology that is now looking more and more like a cautionary tale.
The WiBro mobile Internet services, short for ``wireless broadband'' and a local variant of mobile WiMax, have been struggling to compete in one of the world's most wired countries.
KT has invested more than 730 billion won (about $553 million) in its WiBro services, while SK Telecom, the other operator, invested 620 billion won. However, the two companies combine for just 170,000 customers and about 25.2 billion won in revenue for their WiBro businesses.
The numbers make a mockery of the government's initial predictions of 1.4 million subscribers and 290 billion won in revenue by 2008.