Financial success eludes mobile television

Financial success eludes mobile television

Despite massive viewership and popularity, mobile television, dubbed as digital multimedia broadcasting (DMB) here, has yet to become a lucrative business for broadcasters. / Korea Times file By Kim Tong-hyung Five years into its existence, the viewership continues to grow for live mobile television. Now, only if anyone could figure how to make money off of it. In the first-half of this year, more than 34 million Koreans had access to free digital multimedia broadcasting (DMB) television and radio services, with the functions becoming conventional on mobile phones and other portable devices like multimedia players and in-car navigation systems. The sales of DMB-equipped devices are expected to pass 40 million by the end of the year, according to industry watchers. Apparently, nobody is complaining about the growth in viewership, but DMB appears to be a strange business where the massive number of customers defies the depleted bank accounts. Unlike satellite-based DMB, a pay-television platform backed by mobile-phone carrier SK Telecom, the free, terrestrial DMB services rely on advertisements to keep them going. But with advertisers skeptical over the effectiveness of their commercials on the tiny portable screens, DMB broadcasters are learning the hard way that advertisements alone will never ensure them a sustainable business. The country’s six terrestrial DMB broadcasters combined earned less than 10 billion won (about $8.6 million) in advertising revenue for the first six months of the year. During the second quarter they managed to earn less than 5.8 billion won combined, despite the bump in viewership due to the football World Cup matches in South Africa. At least, the plight is manageable for the DMB operations run by the three major national television networks KBS, MBC and SBS, and cable news channel YTN. DMB-only broadcasters like Korea DMB and U1 Media, on the other hand, are confronting an existential crisis. And SK Telecom’s underwhelming satellite-based DMB business shows that the subscription model isn’t working too well either. ``It would be difficult to find a precedent anywhere of a new media service gaining that much acceptance over a five-year span like terrestrial DMB did. But a combined revenue of around 4 billion won per quarter just won’t cut it, and finding a reliable business model will be critical for the future of the industry,’’ said an official from the Terrestrial DMB Special Committee, which represents the six land-based DMB broadcasters. ``The advertisement-based model clearly isn’t working. We can’t convert into a true, subscription-based business now, but we need a more reliable form of income, such as charging wireless users a certain amount in activation fees when they buy a DMB-enabled phone.’’ Another threat for DMB broadcasters is the scorching popularity of smartphones, tablet computers and other mobile Internet devices, which may eventually render mobile television reception on handsets irrelevant. KBS, MBC and SBS are among the slew of broadcasters rushing to provide smartphone applications that allow users real-time access to some of their programs. Count in available video destinations like YouTube and Netflix, and it’s hard to argue that mobile television has irreplaceable value for smartphone users. And apparently, it doesn’t help that the country’s most popular smartphone model, the Apple iPhone, doesn’t support DMB at all and probably never will. DMB broadcasters are scrambling to differentiate, and their new beacon of hope is ``DMB 2.0,’’ an interactive service based on mobile Internet networks that enable viewers access to a wealth of data services like electronic commerce, stock updates and personal video recording (PVR) atop of live broadcasts. The technology is nice, but it’s unclear whether DMB 2.0 will ever do anything that smartphone services can’t. And besides, major handset vendors like Samsung Electronics don’t appear to be in a rush to push DMB 2.0-enabled devices. Telecommunications companies like KT, which are aspiring to extend their interactive Internet protocol television (IPTV) services to the mobile platform, aren’t likely to have the back of DMB 2.0 either. DMB broadcasters claim they should be provided a separate source of income to complement advertising, or the lack of it, and among their ideas is for them to take 10,000 won from every DMB-enabled handset sold in ``activation fees.’’

thkim@koreatimes.co.kr