TU Media, the company that really was the first mainstream mobile TV service launched in the world, using satellite and gap fillers in Korea, is changing its business model almost entirely say local news reports, trying one last throw of the dice to keep pace with the regulator mandated free to air T-DMB service.
Mobile TV operators the world over will be keen to track the outcome, because TU Media, using its S-DMB proprietary satellite terrestrial hybrid in 2.6 GHz, a system very similar in nature to the Alcatel DVB-SH technology, because it will be a good indicator of how compete with an entirely free to air Mobile TV service.
The idea is to offer 9 of its 16 TV channels for free, along with many music channels, in some of the key South Korea Telecom cellular bundles, with SKT paying TU Media (in which it is the dominant shareholder) for the service. The price for this particular ‘thin’ bundle of TV services is now also dropped to the equivalent of around $7.
The company has also launched ‘a la carte’ options where customers can create their own bundle and only pay for the channels they choose, paying just $2 a month for the first channel and then $1 per channel after that. TU Media will need permission from the Korean Broadcasting and Communications Commission to offer these new prices, which is expected soon.
TU Media has also recently added the National Geographic channel, BBC World News, a golf channel, more stock exchange information and more international news services.
TU Media has been on the back foot since it first launched its service in Japan during 2004, where it was a complete failure. When it was launched 6 months later in Korea from the same satellite, it was understood that the system needed gap fillers and that a satellite only approach would not be good enough. This drove up its costs considerably.
Politically this was a classic war between broadcasters and cellular operators, and the residue of that remains, despite the out and out win by T-DMB across Korea, attracting over 4 viewers for each of S-DMB’s one. T-DMB has now begun to build out from its base in Seoul to the rest of the country, but its growth has begun to slow, and the conflict between the two services still seems to prevent either one from making headway. Between the two services there are over 8 million viewers of mobile TV, but S-DMB, initially paid for at around $17 per viewer, has between 1.5 million and 2 million of these, and more than 50% of those 8 million are in car systems or on specialist video devices, not handsets.
TU Media identified early that it had a content problem as local broadcasters were backing T-DMB and it has chased any sport and especially live sport that was not already signed to an existing broadcaster, and has had some successes importing overseas sport such as the Barclays Premier League (UK soccer) and US Major League baseball. It has also landed local baseball and the World Championship of Baseball when Korea was involved during 2005, which drove its subscriber numbers aggressively.
Currently though, rival T-DMB is only running around 7 or so TV channels despite having capacity for around 20.
In November there were rumors that SKT was looking for a way out of the service, and we thought that perhaps a converged platform for S-DMB and T-DMB could be offered and that EchoStar, another shareholder, may become more aggressive in the region. However this looks to us like SKT is now using the S-DMB service offering to reduce SKT customer churn, rather than generate real revenues.