[Satellite News 05-07-10] SkyLife is one of the first DTH operators in Asia to make the move to 3-D, teaming with Nagravision to offer 3-D services to its 2.5 million subscriber in Korea. The operator already has launched Sky 3-D, which it claims is the world’s first 24-hour 3-D channel and is investing 5 billion Won ($4.4 million) to extend its 3-D activities, including launching two more 3-D channels by 2012.
     “When I took the helm of SkyLife and became CEO, we started considering full HD and 3-D broadcasting services as new business products since 2008,” CEO Mong-Ryong Lee said. “ I have taken the lead on these projects. Starting last year, we took our course to 3-D broadcast, and a 3-D task force team were gathered and involved in preparation of 3-D channel service. … In terms of our next step, we will produce better 3-D content like live sports and movies continuously and export our own 3-D content. We will also launch new services like 3-D (movie rental service). We believe it was the right time to make a debut into the 3-D market.
      Lee discussed why the broadcaster has moved aggressively into 3-D and how SkyLife will make a return on these investments.

Satellite News: Why do you think the time is now right to launch such a service?

Lee: We consider our company as a trailblazer in the 3-D broadcasting market, as we launched the world’s first 24-hour 3-D dedicated channel, and we are setting the standard of 3-D on TV in Korea. When we decided to launch 3-D channels, many people said the time was not right yet for 3-D, but we wanted to reach the next frontier and conquer 3-D-TV. Our primary goal is to give our customers the best entertainment. Also, we are sure that our 3-D broadcasting service will help the growth of our ARPU figure.

Satellite News: How would you assess the performance of Sky 3-D to date?

Lee: Around 20 percent of the SkyLife customers subscribe to HD packages. After launching the 3-D channel, the amount of HD package watching customers is growing gradually. Many of them said they chose SkyLife HD service for being able to watch the 3-D TV channel. These numbers show that the performance of 3-D channel is doing well.

Satellite News: What levels of demand do you think there will be for 3-D TV services in Korea?

Lee: Sky3-D is trial broadcasting, so viewers can watch this channel at no extra charge. But it will be transferred to a commercial service around the fourth quarter of this year. At that time, we expect that more than 10 percent of 3-D TV users in Korea will subscribe to SkyLife’s pay 3-D channel. It is expected that more than 300,000 enabled 3-D TVs will be sold in Korea this year.

Satellite News: What have you learned from your initial foray into 3-D TV?

Lee: One of the big obstacles to the adoption of 3-D TV at home is the fact that to get the 3-D effect, you’ll need to wear glasses. Second, Sky 3-D is broadcast using a normal HD broadcast channel over existing SkyLife infrastructure. It’s the same 3-D broadcast delivery way of BSkyB, SkyPerfec TV. The images then make their way through SkyLife’s broadcast infrastructure where they are compressed and positioned side by side in a single HD frame, so if you don’t have a 3-D ready TV, you have to watch the divided images inconveniently.

Satellite News: What of consumer behaviour are you seeing so far?

Lee: We are convinced that wearing glasses is a big obstacle. Active shutter 3-D TV glasses are heavy, and many viewers feel uncomfortable. Even worse, the initial glasses that the TV makers are rolling out with their sets typically only work with their own brands of TVs: Samsung glasses with Samsung TVs, Panasonic glasses with Panasonic TVs, etc. That’s a big problem because the glasses are expensive — about $150 a pair. That’s a lot of money if you have a 3-D TV and want to invite your friends over to watch.

Satellite News: Are you able to use your existing HD infrastructure to deliver 3-D TV?

Lee: Sky 3-D is broadcast using a normal HD broadcast channel over existing SkyLife infrastructure, which means you can enjoy our 3-D channel using a SkyLife HD set-top box, provided you have a 3-D-ready TV. The Sky 3-D signal is a side-by-side, 1080i spatially compressed stereoscopic 3-D delivery, decoded at the receiver’s site and viewed with circularly polarized passive lenses.

Satellite News: What are the major challenges to make a 3-D TV proposition a success?

Lee: The lack of proper quality 3-D content is the biggest problem. 3-D production costs are two to three times higher than for 2-D content. Moreover, the production process is much more time consuming, so we invested $4.4 million to make quality 3-D content. We are starting to produce a variety of 3-D content, focusing on live sporting events and concerts. ESPN 3-D announced that a further 25 FIFA World Cup 2010 matches, NBA, etc., will be produced in 3-D. We think World Cup matches and other big sporting events will drive adoption of 3-D television sets and afford opportunities for our affiliates to create value through new product offerings, and our advertisers, who want fresh sponsorship opportunities.

Satellite News: How will you make money on 3-D TV?

Lee: From the fourth quarter of this year, Sky 3-D will be transferred to a commercial service, so the subscription fee will be the biggest income of 3-D broadcasting service. Also, we are looking into partnering with the advertisers and new models of advertising.