Some regions boast world's fastest connections
HONG KONG — There are few regions better qualified than Asia to demonstrate the prowess of Internet Protocol Television.Pockets of Asia also boast the world’s densest and fastest Internet connections, making them ripe for interactive and high-definition TV services over a souped-up phone line. PCCW’s Now TV in Hong Kong has overtaken its cable rival to become the leading pay TV supplier in the territory, while Singapore’s mioTV, which launched last year, has built-in recording and search functions and can even be forwarded to the mobile phones of SingTel subscribers. But in many parts of the region, converting that potential into a mass-market proposition has been hampered by incumbent cable operators and regulations that seemed designed to protect them. That may now be changing in mature markets like South Korea and Taiwan and the fast-developing China. Asia has not had a common regulatory approach to IPTV, and rules typically dealt with content, broadband access and exemptions for small players. China, for example, prevents most foreign-owned channels from operating in the country and limits foreign content. India, on the other hand, requires channel operators to make content available to all platforms, something that discouraged pay TV operations from developing. Korea offers the most dramatic example of what could be ahead. For years, regulations prevented IPTV platforms from carrying linear real-time programming such as news or sports, and enforced a 12-hour delay on transmission of shows such as local TV dramas. This effectively relegated IPTV to video-on-demand or catch-up systems. So-called “pre-IPTV” services, including Hanaro Telecom’s Hana TV (now sold to SK Telecom) and Korea Telecom’s MegaTV, each built up several hundred thousand subscribers, and total numbers hit 1.35 million in February. Now that new regulations have been drafted, Hana and Mega are expected to challenge the cable giants. After all, KT and SKT already deliver super-fast broadband into millions of homes (over a third of Hanaro’s domestic subscribers have connection speeds of more than 100 mbps). But problems remain. KT recently began a trial of full-service IPTV, but at launch it had to make do with carrying only KBS1 and EBS, the country’s two nonprofit pubcasters, as talks to carry KBS2, MBC and SBS had stalled over carriage fees. In the Korean case, competition comes not only from cable platforms, which have consolidated in anticipation of the IPTV onslaught, but also from mobile TV. Korea is far and away the world’s most developed mobile TV market — with 14 million subscribers to rival satellite and digital terrestrial services — operated by many of the same broadcast and telecoms groups. Still, SKT and KT seem confident that their new-media platforms, whether mobile or IPTV, will become powerful media in the future and have bought equity stakes in film and TV production shingles to provide them with unique content. KT recently greenlighted a slate of four made-for-IPTV movies to be made through its Sidus FNH subsidiary in a fashion similar to cablers CJ and OCN’s low-budget, cable-only movies, mostly erotica and suspensers. In Taiwan, government protection for an oligopoly of cablers that have slowly consolidated their reach over the past 15 years has probably gone too far and is now criticized even by Taiwan’s Cable Broadcasting Assn. and by the Cable & Satellite Broadcasting Assn. of Asia. Price caps may have helped the cablers hold back competition — in most other Asian territories, IPTV comes in 20%-30% lower than competing pay TV services — but have also removed the incentive for modernization and digitization. Lu Shyue-Ching, boss of Chunghwa Telecom, which operates the Multimedia on Demand IPTV service and has 591,000 subscribers, says: “We want equal access to content. Now 70% of our programming comes from foreign providers. We want local news(shows) and talkshows, but regulations prevent this.” In order to gain some exclusive content, Chunghwa acquired local animation firm Spring House in 2006. Taiwan’s slowly progressing regulatory system could see convergence of rules for terrestrial, cable and satellite transmission and turn MOD and other IPTV services, currently limited to the big cities, into nationwide services. In numerical terms, China is already a major IPTV player, with 2.2 million subscribers at the end of Q3 (China Telecom had 1.51 million, China Netcom 690,000), but content and licensing requirements so far prevent it becoming mass market. (So too, does the political capital previously expended on building major cable networks.) IPTV licenses are not issued directly to telecom operators, which control the infrastructure, but rather to joint operations between telecom carriers and IPTV broadcasters. Further, they require three separate licenses from the Ministry of Industry and Information Technology and a fourth, an Internet culture business license, from the Ministry of Culture. And local telecom operators are only allowed to offer IPTV in cooperation with national IPTV license holders — a China Telecom branch in Hubei Province was recently fined for breaching this rule. Still, demand for new services ahead of the Olympic Games gave IPTV in China a significant boost. Singapore may offer the most interesting glimpse of the future. In addition to mioTV, which is having a tough time against a cable incumbent with numerous exclusive content deals, the country also established a lighter regulatory framework for niche players to offer IPTV services. To date, two licenses have been granted, one to an educational programmer, the other to a channel strong on locally made content.
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