BUSINESS

KT joins forces with DreamWorks Animation

By Kim Young-won

Korean IPTV market competition sizzles

  • Published : Apr 20, 2016 - 14:59
  • Updated : Apr 20, 2016 - 16:47
Korean telecommunications companies are desperately seeking ways to overcome breakneck competition in the local mobile network sector.

One such effort involves beefing up their media platform businesses, often considered as their future growth engine.


On Wednesday, network operator KT joined hands with U.S. filmmaker DreamWorks Animation to provide the latter’s animation content on KT’s IPTV service olleh TV.

DreamWorks has produced mega-hit animated movies such as “Shrek,” “Kung Fu Panda,” “How to Train Your Dragon” and “Puss in Boots.” The U.S. filmmaker is also rolling out TV adaptations of its films, aiming to attract global fans.

The U.S. firm launched DreamWorks TV channel in July 2015 and it is currently available in five Asian nations including Thailand and Malaysia.

With the latest tie-up, KT has become DreamWorks’ sixth local partner for the animation channel in Asia.

“The core factor of an IPTV service is a variety of content,” said Kang Guk-hyun, managing director of KT’s marketing division. He added that the new partnership with the U.S. firm will be a driving engine behind KT’s media platform business, along with its plan to offer high definition content on all 242 channels of the IPTV platform by the end of this year.

He also said that the company will try to make investments to create media content this year.

KT will provide 4,000 on-demand animations of DreamWorks on olleh TV.

The latest move by KT partly reflects ongoing tectonic changes in the local telecom and multimedia sectors.

Korea’s largest mobile network firm SK Telecom is trying to merge cable TV operator CJ Hellovision with its subsidiary and IPTV firm SK Broadband, posing a threat to its rivals KT and LG Uplus, which also runs its own IPTV service.

SKT’s merger attempt was made in response to its relatively weakening leadership in the telecom market.

Its market share by number of subscribers dropped from 53.2 percent in 2002 to 44.8 percent in 2015. Its market share based on sales dropped 60.3 percent in 2002 to 40.6 percent in 2014.

SKT also aims to invest in creating media content as in the case of video-streaming giant Netflix which produced American TV show “House of Cards.”

The U.S. video-streaming firm, which launched its on-demand video service in Korea earlier this year, is a threat to the local market as it can eat into the profits of the three network operators.

NH Investment and Securities said in a financial report that “Netflix could cause a negative impact on the local IPTV services in the long term.”

KT’s IPTV service, which has more than 68 million subscribers, is expected to post 1 trillion won ($882 million) in sales, but it is anticipated to record an operating loss.

“The Korean IPTV sector, relatively smaller in size than other nations, has great growth potential,” a KT directing manager said.

By Kim Young-won (wone0102@heraldcorp.com)