Korea's KTF and SKT Hunt For Content Acquisitions

In May, we had a post and comments regarding SK Telecom’s purchase of a media company to help feed content to its 3G and DMB (satellite-to-handset) networks. I defended the action, noting that Korean business is NOT like the US or EU, and vertical integration through the value chain is the norm. Well, right or wrong, that SKT purchase seems to have started a trend in Korea, where competitor KT Freetel is now hunting for content acquisitions. KT, which owns the fixed infrastructure and the #2 wireless co. has already hired a new VP, and fired up a consortium targeting media mergers. Often, as an analyst, I have looked to Korea and Japan for clues at to what will happen in a couple of years in other markets, but such vertical integration is not something I think the rest of the world will adopt. For example, don’t expect Qualcomm to buy Time-Warner in order to pump content into the MediaFlo network. What we more typically see in the USA would be something like Qualcomm paying the development costs of early content to kick-start the market, then hoping momentum builds.

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