Education new hope for Asia Internet TV firms

By Rhee So-eui - Analysis

SEOUL (Reuters) - 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 TV for a fraction of the cost.

For companies selling interactive TV over the Internet, Asia's surging demand for high quality education for kids to career changers offers up potentially lucrative market and the chance to lure customers away from cable TV and the computer.

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

Tuition is expensive, with spending on after-school tutoring estimated to be worth 2.6 percent of the country's gross domestic product. Sought-after private tutors can earn a banker's salary.

South Korean companies, such as KT Corp (030200.KS), which plan to upgrade their Internet-powered TV services to full IPTV this year, are spearheading the move.

KT Corp says e-learning for children ranked among the most successful programming on its MegaTV, 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.

"Education is one area they can make users pay extra money," said Young Choi, analyst at Mirae Asset Securities in Seoul.

"The key is to increase the portion of paid programs," he said, noting such programs generate about 20 percent of IPTV revenue now. Choi expects South Korea's IPTV users to grow to 5 million by end-2009 from an estimated 3 million at end-2008. The overall market for Internet protocol TV (IPTV) could reach more than 55 million subscribers worldwide by end-2011, from an estimated 10 million last year, research firm Ovum says.

IPTV, with its immediacy, interactive features and easily navigable menus, bypasses the process of having to boot up your PC and trawl the Internet.

GET THEM YOUNG

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

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

Most IPTV companies have mainly focused on popular TV shows and sports events for growth. In Europe, operators such as BT (BT.L) in the UK gained market by offering customers free access to digital terrestrial TV. Hong Kong's PCCW (0008.HK) has the exclusive right to broadcast popular English Premier League soccer.