By Cho Jin-seo
Staff Reporter
Movies and TV dramas have become a cheap commodity. Multiplex cinemas are open 24 hours a day in every nook and cranny of Seoul's main streets. Cable and satellite TVs are inundated with latest American TV shows with no extra charge. On the Internet, up-and-coming Hollywood movies sneakily spread via peer-to-peer file sharing programs before they are premiered at local theaters. Considering all of this, it is not peculiar that video rental is now a sunset industry.
But even for those accustomed to all the free stuff, it may be a very tempting offer if they can watch popular television series such as ``Prison Break'' or ``24'' at any time they want, on their big living room TV, at only 600 won (around 70 cents) per episode _ and in a completely legal way.
That is why the so-called IP TV service is gaining momentum in South Korea where some 90 percent of households already have pay TV boxes, let it be a cable box or a satellite dish.
Hanaro Telecom, the leading IP TV provider, says that its ``Hana TV'' has drawn more than 500,000 customers over the past 12 months and expects the figure to double by early next year. KT, the nation's dominant fixed-line telephone and broadband line operator, is also eager to take a piece of the swelling pie with its ``Mega TV'' service.
``Our main idea was: When our customer has time to watch TV, don't tie them to the schedule of regular channels,'' said Mark Pitchford, chief marketing officer of Hanaro. ``Allow them to choose the program they want to watch when they have the time available.''
Hanaro boasts that it is the world's leading IP TV provider in terms of quality of service and rate of growth. The company expects that it will become the largest player in the world in terms of the number of subscribers within this year, passing Hong Kong's PCCW which has around 820,000 users.
Its greatest virtue is the diversity of programs. Pitchford says the firm has stashed more than 70,000 programs bought from 200 providers worldwide, available at any time a user wants to watch them. There are movies, TV dramas, documentaries, music videos, cartoons, sports, educational programs, and of course, adult shows for aged 19 and above.
``It's really a long-tail model,'' Pitchford says.
IP TV is short for Internet protocol television _ the Internet line plugged into your living room TV. It is a system where television contents are delivered by using broadband Internet lines and a set-top box, instead of using traditional TV antennas, cable boxes and satellite dishes.
Watching TV via the Internet is not a completely new idea. The first IP TV service appeared in Britain in 1999. In Korea, KT, the network giant, launched it in 2004 though on a limited scale. Many video-on-demand or pay-per-view services at hotels and other closed networks are operated this way, too.
Only a year old, Hanaro is a late starter. But its growth rate has been overwhelming.
``While it took three years for France Telecom to acquire 500,000 IP TV subscribers and two years for PCCW of Hong Kong, we acquired 500,000 Hana TV subscribers in about one year, and it can be a barometer of success,'' Park Byung-moo, the firm's CEO, said in a press conference earlier this month. ``Hana TV is growing at an unprecedented pace, positioning itself as the leader of IP TV service.''
Pitchford, the chief marketing officer, rightly contributes the IP TV's success to South Korea's high broadband penetration.
Because IP TV requires real-time data transmission and uses the Internet, it is prone to delays and picture blurring if the Internet connection is not fast and reliable enough. But as South Korea surpasses most other countries when it comes to Internet networks, so could its Internet TV services.
About one third of Hanaro's home Internet users have connections of over 100 megabits per second. At that speed, it requires only a few minutes to download a full high-definition movie, and 15 seconds are more than enough to download the first few minutes of a program as a safety buffer that ensures seamless viewing.
Despite such technological advantages, there are obstacles that are hindering IP TV's further growth.
Piracy is still an issue, though public awareness on this has improved a lot. Many youngsters still don't feel a bit of guilt in downloading movies and dramas on peer-to-peer sites.
Hardware systems have evolved along with software piracy. Many DVD players sold these days have memory chip slots, which can read downloaded computer files and play them on TV using remote control, as conveniently as watching a movie on DVD.
Competition with other media also remains a big concern for IP TV's future. Cable TVs have been consolidating their distributional and buying power by acquiring and merging with each other. The evolution of mobile TV services such as DMB (digital multimedia broadcasting) and Mobile WiMax can be long-term threats as well.
Another critical point is that the government's bureaucracy is too rigid and obtuse to catch up with the technologies.
Since there were no specific laws dealing with such a format for broadcasting, the government hasn't allowed IP TV services to provide real-time broadcasting in order to prevent protests from traditional broadcasters. That is why IP TV services have a 12-hour delay in broadcasting local TV dramas and why they don't have live news and sports programs.
This is a result of a tug-of-war between two government groups. The Ministry of Information and Communication has been laboring to lift the ban on real time broadcasting; meanwhile, the Korea Broadcasting Commission, which represents the interests of traditional TV media, has been strictly against the ministry's drive.
The stalemate is expected to continue for some time. Yoo Young-hwan, who is soon to be the new minister of information and communication, said in a National Assembly hearing last week that the ministry will not back down in the contest and will keep fighting until the broadcasting commission submits. There is no doubt the commission is as determined as the ministry.
Still, Pitchford said that he is very positive about the government's willingness to ``guide the industry the right way.''
``I think it's more about timing. It's about when, not if,'' he said.