Daum moves into Korea's IPTV market

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SEOUL -- Daum Communications, South Korea's second-largest Web portal operator, will join U.S. computer software giant Microsoft and local set-top box maker Celrun Co. to enter the country's growing Internet Protocol Television market, Daum said in a statement Tuesday.

Beginning in the second quarter of 2008, Daum said it will provide content and operational support for the IPTV service, Microsoft will provide the IPTV support and overseas marketing and Celrun will provide the consumers' equipment.

In the wake of the recent loosening of IPTV laws here, competition in the field is rapidly heating up. Many players are hoping IPTV might provide Korea's successful film and TV business with a share of the online revenue earned in the music and gaming industries.

Korea is either the fifth- or sixth-largest movie market in the world, topping $1 billion for the past two years, but ancillary revenues remain tiny, as rampant piracy has prevented the DVD market from gaining traction.

Fixed-line providers KT and Hanaro Telecom are already offering Video on Demand ventures that they are converting into full IPTV. Hanaro's Hana TV is the market leader with 800,000 subscribers, while KT's Mega TV has 300,000.

Industry observers are predicting that South Korea could have 3 million IPTV subscribers by the end of 2008.

Despite Korea having one of the deepest broadband penetration rates in the world, bureaucratic turf wars kept IPTV out until the National Assembly passed the necessary legislation Dec. 28 after months of wrangling.

Some data show that India is the fifth-largest movie market, in terms of revenue.
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