Korean IPTV a Western content oasis

April 1, 2008 by Kate Calder

Sitting in on our own KidScreen Summit ‘Multiplatform Mania: The New Contract’ panel discussion that explored the contractual landscape for digital rights on emerging platforms, our curiosity was piqued when Decode Entertainment director of sales Josh Scherba mentioned the company’s non-exclusive deals with three new IPTV channels in Korea, a country that currently has the highest broadband penetration in the world.

As well as locking in three traditional linear broadcasters in Korea, Scherba recently cut deals for English literacy series Super Why! with Hanaro Telecom and two other IPTV service providers (the deals were just awaiting sign-off at press time). Each IPTV player is operating non-exclusively and paying license fees with one- to three-year terms. ‘We had a specific opportunity with Super Why! because it’s about English literacy. This deal wouldn’t have happened if we didn’t have a Korean version,’ says Scherba, who also sold a Korean dubbed version of Franny’s Feet to Hanaro.

Scherba explains that IPTV services in Korea operate through set-top boxes and charge monthly fees for the box rental in exchange for making content available on-demand. (IPTV is a supplement to TV, so users still subscribe to cable or satellite.) ‘It’s essentially replacing the DVR in Korea,’ says Scherba. Hanaro Telecom has so far been the leading service provider, with Korean Telecom (KT) and LG Dacom competing for market share.

The digital landscape is about to evolve even further when new legislation on IPTV services, expected to pass in the next few months, allows providers to graduate from only supplying content on-demand to offering linear broadcast services. ‘Viewers will have all the on-demand applications, but will also get the regular channels. These three major IPTV players will effectively become competitors in the market for TV viewers,’ Scherba says.

Mickyeong Jung, a director at Seoul-based distribution company Iconix, says Korean and Japanese content is still most popular with Korean families. However, with the emergence of IPTV channels, there’s an increase of Western content in the market, especially from US majors such as Disney, which last year set up a VOD channel on Hanaro as well as a branded channel for preschoolers, kids and families on KT. And Jung adds that the volume of Western-made animation for which Iconix represents IPTV rights is also increasing.

As IPTV subscriptions continue to rise, Jung says the broadband market in Korea is getting fiercely aggressive, and providers are hustling to secure content for their IPTV services. She says some are looking for exclusive content that jibes with their channels’ identities and are even ready to participate in co-productions to create original content that’s the right fit.

In the meantime, Jung cites government regulation, policy at free-TV networks that are powerful content suppliers of IPTV, and the strategy and finances of IPTV players themselves as vitally important factors that will affect how the market transforms.