By Kim Tong-hyung
Staff Reporter
Cable television reigns over Korean living rooms, but is now pressed more than ever to keep viewers entertained and engaged.
Cable TV is struggling to protect its turf from telecommunications companies and to expand into new and advanced broadcasting services such as Internet protocol television (IPTV). Companies also have to compete with national networks in an ever-changing television industry landscape.
However, they claim confidence in their ability to stay ahead of the curve in an era where televisions are plugged into the Web.
At the "Korea Cable Television Association (KCTA) Digital Cable TV Show" at the KINTEX in Goyang, Gyeonggi Province, KCTA President Kil Jong-sup said that cable television operators are proactive in embracing broadcasting technologies and content development.
He also stressed that the trend of convergence is a two-way street, with many cable operators looking to get a slice of the telecommunication pie as virtual mobile network operators (MVNOs).
"We should prepare for the expected analog-to-digital television transition in 2012, to provide a high-quality network to allow digital broadcasting to reach every corner of Korea," Kil said.
He claimed that the industry is in an ideal position to spearhead the transition into the digital broadcasting era, considering the level of the networks, content, technologies and service experience.
The KCTA believes that about 70 percent of the households with cable will transfer to digital cable broadcasting by 2011, compared to the 2 million digital cable subscribers last December.
"Establishing a strong content base is also critical for us, especially with plans to find new opportunities in foreign television markets, which could give some cable operators a shot at becoming global media groups. Cable television operators will be involved in 3D broadcasting and 4D, and will also be providing various form of mobile telecommunications services," he added, apparently using the concept of "4D" liberally.
The Digital Cable TV Show doubles as a self-thrown party by the cable industry to celebrate its 15th anniversary.
Since starting services in March 1996, the industry established a dominating presence here, with its 15.4 million subscriptions accounting for more than 80 percent of Korean households.
Following mergers and acquisitions in the late 1990s and early 2000s, the cable industry is now ruled by five heavyweight operators in CJ, T-Broad, CNM, GS and HCM.
Reshaping the TV Landscape
The coming years may pretty much determine whether the cable industry continues to rise and eventually compete with terrestrial broadcasters for influence and revenue, or fail to exploit its size and struggle for growth in a saturated pay-television market.
IPTV, backed by telecommunications operators KT, SK Broadband and LG Dacom, is off to a slower-than-expected start, with the three companies combining to garner about 2 million customers after a full-year of services, with viewers complaining about paying a premium for services that lack content.
However, with the telecommunications companies throwing in IPTV along with fixed-line, mobile and Internet telephony in their bundled discount packages for consumers, the market is expected to pick up.
IPTV, or the delivery of television services over broadband networks, is certainly a sexy technology, enabling video-on-demand (VOD), e-commerce and other data services with enhanced interactivity on top of conventional television programming.
Cable operators insist they have the technology, network infrastructure and subscriber base to stem the IPTV onslaught but they complain about the lack of freedom in providing telecommunications services, particularly wireless telephony.
However, government plans to allow MVNOs ― companies that buy wholesale minutes, text and data from wireless network operators and resell them to consumers under their own service brands ― inspire confidence.
The larger cable companies, including the "big-five," are moving to form a united front for an entry into voice services, while charting their own strategies for the MVNO era and also discussing the possibility of non-phone mobile services through other devices.
"Telecommunications operators have been providing 'quadruple services' in television, broadband Internet and fixed-line and mobile telephony, while cable television operators were allowed to provide only three of the four. The MVNO law would adjust this competitive balance," said a KCTA official.
The government plans to deregulate the media market ― lifting the cross-ownership bans on newspapers and television stations and allowing a larger number of businesses to own television stations and provide news channels. This may have a bigger effect on the reshaping of the television industry.
The Korea Communications Commission (KCC) is looking to license two or more companies this year to provide "comprehensive programming" cable channels, which are to be allowed to provide news, entertainment and other programs. Additional licenses for news-only channels will also be given.
Although critics claim that the deregulation may threaten diversity in media ownership and discourse, government officials insist that the changes are vital for sparking new competition in the media industry and allow "global" companies to emerge among the local media heavyweights.
Print media giants, including the "big-three" conservative newspapers of Chosun Ilbo, JoongAng Ilbo and Dong-A Ilbo, have their own television aspirations, but it could be major cable operators that benefit the most from the changed regulatory framework.
A license to provide comprehensive programming could allow major cable companies like CJ to compete directly with national television. The company already seems to be looking ahead, bulking up by acquiring ON Media, a major cable television company that operates a variety of popular movie and entertainment channels.
CJ already controls many of the country's most popular cable channels such as showbiz channel tvN, movie channel CGV, music channel Mnet and sports channel XTM.
ON Media, which has around 600,000 subscribers through four cable system operators, just adds to CJ's wealth. ON Media operates a variety of popular channels, including movie channel OCN, cartoon channel Tooniverse, fashion and lifestyle channel ON Style, and drama channel Story ON.
It remains to be seen whether CJ could provide a fourth player to the "big three" national networks, KBS, MBC and SBS, which have dominated the television sector in terms of influence.
thkim@koreatimes.co.kr