TV world is going digital. Strong push by South Korean government, digital TV and broadcasting replace the old established analog TV technologies. The convergence of media broadcasting and communication is leading industry to come up with new business ideas.

As the recent trend indicates wired telephone which peak out soon after year 2000 continues to fadeout, even explosive popularity with wireless technology for last ten years is showing slight drop in data side, and also high speed internet market beginning to stagnate, raising concerns to shrinking market.

In broadcasting sector, unlike struggling Terrestrial, cable TV is showing steady growth across-the-board. The outburst of Terrestrial competitors is driving market sales and profit margins to down trend. On the contrary, the cable TV market is gaining more subscribers and supplement sales through high-band internet access. Also, satellite broadcast market with worsening profitable margin and lack of sales are not seeing any lights.

As a result, both broadcasting and communication sides are looking to regain momentum through their merger and the TV will no longer limit itself just with broadcasting side but explore new market(s) using communication side.

Consumers sold on blending of Communication and Broadcasting
One other thing that should be noted is spending pattern of each household. Coinciding with recent domestic consumer spending issues, total domestic household spending in telecommunication (internet, cell phone) rose to all time high $13.268 billion just in first half of this year. It's first time communication related spending weighed more than spending related to eating out.

The figure indicates huge rise in telecommunication spending but actual growth rate has been trickling down gradually since year 2003. However, airwave fee expense of 0.3 percent from overall expenses in last year has shown 6.1 percent growth rate (partially due to pay per view programs) compared to mere 0.1 percent CAGR (Compound Annual Growth Rate) in Telecommunication expenses.

Precisely, it's an indication that telecommunication market has topped out but in relative, consumers are more willing to spend on low costing airwave fees. Thus industry affiliates expect synergy effect upon linking telecom services.

Eventually TV market should expand into DMB, IPTV and digital cable and run both communication/entertainment businesses.

IPTV, digital cable, DMB bringing new TV era
One of the biggest changes in TV services is with IPTV. It's using telecom IP networks to transmit data. Hanaro Telecom (HanaTV) and KT (Mega pass TV) are two main TV portals providing IPTV service presently. When combining future demands from ETRI and stock markets by year 2010, IPTV subscribers are expected to be somewhere between 3.7 million to 6.1 million with sales forecast of $9 billon.

Meanwhile, digital cable TV industry is keeping close watch on the IPTV commercialization and targeting to finish most of digital conversions by 2010. Three cable companies Tbroad, CJ Cablenet, C&M Communication are working toward standardizing digital Media Center (DMC), acquiring HD set-top box, offer HD PPV (Pay Per View) programs to raise the combined cable TV market revenues close to $1.3 Billion dollars.

In recent, LG Dacom and KB bank launched 'TV banking service' through subscribers of KDMC (Korea Digital-cable Media Center) to bring next generation of home networking electronic financial service, T-Commerce.

Mobile service as one of next generation TV
Mobile broadcasting is one other form of next generation TV services. T-DMB and Satellite DMB services are available in domestic Korea currently. The satellite DMB (service provided by TU Media) is in struggle but T-DMB (free service) on the other hand is doing quite well. Just in first nine months since its conception (metropolitan service area), 1.75 million DMB devices have been sold.

Pilot programs are being developed by KBS (Korean Broadcasting Service) for nationwide service presently. Within December, broadcasting commission plans to pick single firm to control one region and twelve others to run six other regions, targeting for first commercial service by next March. Also in discussions are employing MediaFlo or DVB-H devices for IP based DMB services.

"With convergence of broadcasting and communication, we could see a one standard bandwidth, common network with unified platform to carry TV programs in future. The unified platform ultimately will offer mobile TV, mobile phone, and mobile internet all as one unified service." said Minhyung Um, KBS DMB team manager.