TU Media, currently Korea’s only mobile television service provider, is not meeting subscriber expectations, a company official said. But an industry analyst added that the company is on firm footing after only three months of operations.

Sunkyu Kang, vice president of public relations for TU Media, confirmed to Satellite News that, as of July 22, the operator had 100,000 subscribers, which was lower than the company’s target numbers. He would not disclose what the initial target numbers where but added that TU Media also is unlikely to meet its year-end target of 600,000 subscribers.

The operator launched its satellite-based mobile television service in early May, charging subscribers a start-up fee of about $20 and a monthly fee of $12 for eight video channels of sports and entertainment programming and 24 audio channels covering a variety of musical genres. TU plans to expand its video offering to 14 channels, as well as add new content, such as interactive games, and still expects to have 6.6 million subscribers by 2010, Kang said.

While the early numbers did not meet company expectations, signing up 100,000 subscribers in three months is a good start, said Florence Le Borgne-Bachschmidt, a research analyst at French consultancy firm Idate. “TU Media has had a successful launch,” she said. “Within the first months they sold something like 82,000 terminals. The first month was for free. During the second month, 60,000 customers decided to subscribe to the pay-TV offer, which is very impressive in just one month.”

One of the major issues facing TU is putting together deals to offer Korea’s major terrestrial channels, such as KBS, MBC, SBS and EBS, on its service, which “TU Media believes it needs to attract more consumers,” Le Borgne-Bachschmidt added.

Also, there may be competition in the mobile television space in Korea shortly because one of TU Media’s major rivals is planning on offering free television. But that competition could translate into greater subscriber gains for the entire industry, Kang said.

“The main challenges for TU include getting more consumers within the mobile market to accept and understand the functionality and convenience of mobile TV, as well as competition with the upcoming launch of T-DMB (Terrestrial Digital Multimedia Broadcasting), which will provide users with DMB service free of charge,” Kang said. “Within the next year, we will see the promotion of S-DMB (Satellite Digital Multimedia Broadcasting) and the launch of T-DMB services helping to inform a greater number of people on the positive characteristics of mobile TV, thus promoting an increase in users of our service.”

Consumer Behaviour

While its early subscriber pace disappoints TU Media, the company is hoping that lessons learned about consumer use patterns will help TU Media increase its customer base, Kang said. “Consumers are showing a similar listening pattern in audio services to conventional forms of broadcasting,” Kang said. “On average, Koreans were surveyed to watch 120 minutes of television a day and listen to 48 minutes of radio. DMB users spend on average the same amount of time listening to the audio channels, however, video channels are viewed only about four times a day at a time span of about 28 minutes.”

TU Media hopes to take advantage of its apparent edge in video, where the company found that in comparison to conventional television’s two peak viewing times–the morning and evening–DMB service had four peak times: morning rush hour (8-9 a.m.), lunch time (noon-1 p.m.), evening rush hour (7-8 p.m.) and late night (11 p.m.-12 a.m.), Kang said.

S-DMB In Europe

Kang remains confident about the long-term viability of the mobile programming service, both within Korea and throughout the world.

“We see enormous potential of mobile TV developing in not only Korea but in other parts of the world,” Kang said. “Mobile media is the new lifestyle for the future. As technologies continue to develop and terminals are more affordable, there is no limit to the potential size of this market.”

Le Borgne-Bachschmidt was not as confident about S-DMB’s future in Europe, noting that the European Commission (EC) had been funding research and development into S-DMB, “but it seems that the EC will stop its funding” before the research and development project is finished.

“It is hard to understand this decision from the Commission, but it seems to prove that the EC will not support a satellite option and maybe favor a terrestrial solution,” Le Borgne-Bachschmidt said. “So, maybe like in Korea, if a satellite offer [is] launched in Europe it could only be a private initiative with no public support.”

—Mark Holmes