Thursday, February 28, 2008

Koreans stay at home and go to school

SEOUL: You can spend thousands of dollars and endless hours in crowded lecture halls to gain a South Korean real estate agent's certificate.

Or you could study for the license in the comfort of your own room with a broadband connection to a television for a fraction of the cost.

For companies selling interactive television over the Internet, soaring demand in Asia for high-quality education for children, as well as demand from people looking to change careers, offers a potentially lucrative market and the chance to lure customers away from cable television and the computer.

South Korea, where children spend hours studying in a gruelling battle to enter the top schools that can guarantee a job at the big conglomerates, is at the vanguard of educational television over the Internet in Asia.

Tuition is expensive, with spending on after-school tutoring estimated to be the equivalent of 2.6 percent of the country's gross domestic product.

Private tutors, who are highly sought after, can earn a salary similar to a banker's pay.

South Korean companies, like KT, which plan this year to upgrade their Internet-powered television services to full Internet protocol television, known as IPTV, are spearheading the move.

KT says online education for children ranks among the most successful programs on its "MegaTV" system, which also offers after-school tutoring and adult education courses.

"The response is strong for kids' programs in which they learn by playing games and solving puzzles using a remote control," said Yang Jae Geon, KT's director of media.

Young Choi, an analyst at Mirae Asset Securities in Seoul, said educational programs generated about 20 percent of IPTV revenue.

"Education is one area they can make users pay extra money," Young said. "The key is to increase the portion of paid programs."

Young said he expected IPTV use in South Korea to rise to five million subscribers by the end of 2009 from an estimated three million at the end of 2008. The overall market for IPTV could reach more than 55 million worldwide by the end of 2011, from an estimated 10 million last year, according to the research firm Ovum.

IPTV, with its immediacy, interactive features and easily navigable menus, bypasses the process of having to start up a computer and surf the Internet.

Across Asia, quality education is in constant demand and short supply. Students often fight for places at the best schools, workers pin their hopes on English skills to lift their careers and parents look for new ways to teach their youngsters.

"Game content and educational programs have big potential because both target a very important group of people - that's the young generation," said Rocky Li, marketing director at BesTV, the IPTV unit of Shanghai Media Group.

Most IPTV companies have focused on popular television shows and sports events for growth. In Europe, operators like BT in Britain gained market share by offering customers free access to digital terrestrial television. PCCW of Hong Kong has the exclusive right to broadcast popular English Premier League soccer.

But operators, many of which are fixed-line carriers muscling in on broadcasters' territory, hope that IPTV's interactive features give them an edge in the potentially lucrative teaching market.

On IPTV, lectures can be repeated at any time and they allow students to take quizzes or pose questions in real time.

In China, where history and geography programs are already offered, education is set to become the fastest-growing part of BesTV's business, Lee said, referring to the IPTV unit of Shanghai Media Group.

"In traditional TV, it's difficult to find these programs," Lee said, because of inconvenient times and limited slots. He expects overall IPTV users in China to reach two million by the end of 2008 from 600,000 now.

IPTV companies are also trying to add popular video games, from simple board games and racing to multiplayer online games, to attract computer users away from their computers.

But some analysts say a television in the living room is not the best platform for interactive programming.

"TV is something shared by the entire family," said Suran Seong, a senior analyst at Ovum. "Some parents are not comfortable with the idea of kids studying in front of a TV."

On the financial side, operators will also need to strike the right balance between subscription fees and payments to content holders.

"Big players will remain hesitant until IPTV starts to make money," said Lee Sun Kyoung, an analyst at Goodmorning Shinhan Securities. "Operators, on the other hand, are under pressure to keep fees low to expand the market." ◦

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