We are clearly at a very important point in time when it comes to Internet video, especially video that is served to your television, but over the Internet (also known as “over-the-top” Internet video). Christmas of 2009 and Christmas of 2010 will mark the point in time that Internet menus began to show up in-mass on televisions, DVD players, and game machines. That said, one would be hard pressed to predict exactly how this market will evolve. There are simply way more questions than answers. For example:
- Who will own the operating system layer?
- Who will own the menu “stack” which dictates discovery?
- What will be the key features of this menu system, and which applications will be most useful and successful?
- What type of programs are most popular in this format?
- What are the typical pricing/product offerings?
- Will this product live inside the carrier set-top box or outside?
- Will the carriers that control the pipe also control this interface (either directly or indirectly)?
- Are these systems selling at rates that are above or below expectation? Why or why not?
- Is it considered a viable alternative to cable or satellite?
One way to have an advantage in “predicting” what will happen is to look at other countries that are further evolved in terms of broadband. The most obvious of these, with over 90% broadband penetration, is South Korea. Three providers in Korea offer an over-the-top Internet set-top box, and recent press suggests that there are now just over 800,000 subscribers of these services (out of roughly 16-17mm South Korean HHs). The leader is KT with their Mega TV offering, followed by LG Dacom, and then SK Broadband. While these numbers are certainly impressive, if memory serves, the estimates from a few years back were for multiple-millions at this point, so for some reason the roll out has not gone exactly as planned.
According to this article from January, MegaTV has 38 live channels and 85,000 episodes in VOD format. Also, the video included immediately after this paragraph shows an integration of the Mega TV service on the Playstation 3 (unfortunately its not in English). This highlights the complexity of the “who owns the menu” question. Mega TV is a set-top box as well as service offering on other boxes.
Unfortunately, outside of what is shared here, I do not have much detail on exactly how this market is evolving. If any readers have more data, or have perspectives or answers to any of the questions listed above, add them to the comments or send them to me at [email protected] with “Korea IPTV” in the subject, and I will incorporate the responses into this post. In other words, I will try to make it a living blog post with the latest and greatest on the Korean “over-the-top” video market. Thanks a ton – I look forward to hearing from you!