By Cho Jin-seo
Staff Reporter
The two Internet-Protocol TV (IPTV) service providers have submitted to the demands of powerful broadcasting companies, agreeing to charge their users additional fees for viewing popular terrestrial broadcasting content such as dramas and sports shows.
KT and Hanarotelecom both began to charge their users 500 won per program to watch MBC content within a week of its airing. The same fee will also be charged for KBS and SBS programs from Feb. 15. However, after one week, the programs can be viewed for free.
The IPTV operators have negotiated with the three terrestrial TV channels to make a comprehensive contract so that their users can watch the terrestrial programs without paying additional per-program fees. But the contents providers have opposed the idea out of concern that the IPTV will erode their advertisement sales.
To retain subscribers, KT and Hanarotelecom are offering bonus-point systems. Hanarotelecom gives back 300 won in bonus points each time a user purchases the 500 won program. KT is also planning a similar rebate plan.
``The terrestrial programs make up only a small part of our content, so they won't affect our total sales much,'' Park Byung-moo, CEO of Hanarotelecom, said during last week's press conference. ``But we are working hard to minimize the damage on our customers.''
Many users are reacting ferociously to the charge plan, saying that they were not informed of such plan. Many of them are considering taking group action at online forums in two major Web portals Naver and Daum.
IPTV uses a broadband Internet line and a set-top box to download, or stream video and audio data. The two firms have more than 1 million subscribers in total and want to expand it to 3 million this year.
IPTV is expected to face a lot of competition this year, once the government allows live broadcasting of three terrestrial channels via Internet lines. Both KT and Hanarotelecom are determined to expand IPTV users this year with generous discount plans, believing it will be vital in retaining their broadband Internet subscribers. KT has already started offering a three-month free subscription plan. NHN, the operator of Naver Web portal site, is working together with KT. Daum, the No. 2 portal, has its own IPTV project.