SEOUL - In the next few months, South Korea will launch competing terrestrial and satellite-based multimedia broadcasting services, marking one of the first commercial showdowns for digital video content for mobile phones in the world.
It's a gamble involving millions of dollars and could set a precedent for companies in other countries seeking to market subscription services for streaming bits of video, music and information. South Korea, with its savvy consumers who spend dead time on subways and buses glued to their cell phone sending text messages and playing games, is prime territory for a test run.
In the U.S., Verizon Communications last month launched a limited 3G (third-generation) multimedia service, VCAST, in some cities on their broadband EV-DO network. For $15 a month, the service offers a range of video clips and news on handset models Verizon offers made by Korean electronic giants LG Electronics Inc. and Samsung Electronics Co. Ltd.
The Korean experiment may be watched closely for several reasons, said Anthony Townsend, an urban planning research scientist at New York University. South Koreans, who have been used to a broadband experience for years, may be more tolerant of technical limits while Americans may expect it to function with the speed of cable television. "It's going to be a tough sell," Townsend said of Verizon's launch.
The South Korean government has high hopes that investments in its digital economy will further propel the country’s above-average economic growth. It predicts that multimedia broadcasts will create 160,000 jobs over the next 10 years with $13 billion in product sales and added services.
TU Media Corp. started a free satellite content service last month. The broadcasts come from a satellite it jointly launched in March 2004 with Mobile Broadcasting Corp., a Japanese company backed by Toshiba Corp.
South Korea is using its propriety Digital Multimedia Broadcast (DMB) standard, a derivative of the Digital Audio Broadcast (DAB) standard widely used for radio broadcasts in Europe. Japan is also using it for satellite broadcasts but has its own standard for terrestrial broadcasts.
LG and Samsung are both heavily vested in DMB and are hoping it's adopted Europe-wide as a standard. South Korea's Ministry of Communications has created a special task force lobbying for European use of its DMB standard, and Korean companies have performed several demonstrations.
The other competing technology, Digital Video Broadcasting – Handheld (DVB-H), was picked by the European Telecommunications Standards Institute (ETSI) as a standard in November. However, ETSI recommendations for a standard are voluntary and not compulsory, said Kevin Flynn, press coordinator for ETSI.
Whether it catches on remains to be seen. LG recently promoted its DMB standard at the 3GSM Conference at Cannes as requiring less infrastructure investment as DVB-H because of existing DAB services in many countries. In South Korea, however, satellite and terrestrial systems both use the DMB standard.
Satellite DMB offers an advantage over terrestrial-based systems in that it immediately covers the whole country, and the company has heavily invested in so-called "gap fillers" to enhance coverage in subways where South Koreans use their mobile phones while traveling, according to TU Media.