S. Korea ISP Wants Cut Of Internet TV Profits From Google, AppleBy: Drew Bowling - February 13, 2012
While Google, Apple, Samsung, and other technology leaders race to populate your living room with Internet-enabled televisions, an internet service provider in South Korea might be revealing itself to be a green-eyed monster for all that Internet TV action. KT Corp, South Korea’s top ISP, has stated it will demand a cut in the profits that companies like Google and Samsung gain from services provided by Internet-enabled TVs.
According to a Reuters report, the ISP is hoping to claim a stake in the budding Internet TV industry in order to “create a business model that enables [them] to share profits” gained from the use of their networks. They also rehash the usual complaint ISPs state in regard to these issues, saying the increase in streaming video could clog up their network speeds.
Telecoms like KT Corp have been complaining about streaming services for a while now, so that’s nothing new. What’s novel in KT’s approach is that, instead of trying to bilk their subscribers for money they want, they’re trying to levy a toll from the companies that manufacture and sell Internet-enabled TVs to consumers instead of the consumers themselves. As if to accentuate the seriousness of their demand, KT has already throttled the access of TV applications offered by a Samsung TV.
Samsung responded to KT’s decision to limit services in a statement:
Samsung is a pure manufacturer making TVs, smartphones and computers. It’s not logical to demand network fees from a manufacturer that makes products using networks.
I agree Samsung, it’s not logical, which is why I’ve poured over this article more than I care to admit trying to parse out a legitimate reason for why KT would basically penalize Samsung and their consumers with such a restriction. But I can’t make any sense of it either – well, other than the obvious fact that KT, like most major ISPs, are simply trying to take a short-cut in order to stay competitive with an industry that is quickly leaving them behind.
With Google TV already here and an iTV possibly on the horizon, this kind of challenge from an ISP is problematic. And as more people gravitate towards the Internet to get their fix of TV shows, don’t think this is the last time you’ve heard of this complaint from ISPs, either. If the practice of an ISP charging Internet TV manufacturers did become common, though, you could almost definitely expect that the Googles and Samsungs would implement a monthly service fee from customers to make up for the loss in profits. Which would counteract why people are moving away from cable for TV programming in the first place.
But that’s only allowing that companies like Google and Apple capitulate easily to the demands of ISPs like KT Corp. So let’s hope it doesn’t come to that.