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KANZ: if we build it, they will stop buying DVDs

Whatever nice cosy assumptions you’ve built up over years in the screen production or distribution business; it’s time to chuck them out. That could have been the unofficial theme of the Korea Australian New Zealand Broadband Summit: Digital Futures event (KANZ09) held in Auckland over two days this week. Coincidentally, it also formed the backbone of Jeff Okun’s presentation at Animfx in Wellington.

We’ve heard this kind of thing before about mobile platforms, internet television and so on and so forth. But this time you’d better believe it; governments are in the game and building infrastructure.

Speakers at the Summit explained how Korea already has 100Mbps broadband to most households. That’s 100 mega bits per second – the speed of your average office local area network. But Korea’s Ultra Broadband Convergence Network is the new plan to take that to a Gig.

That’s Gbps or Giga bits per second, the kind of speed where you can download entire movies in HD as fast as you now download email.

The Australian National Broadband Network (NBN) will provide ninety percent of Aussies with access to a high speed optic fibre cable to the home and workplace. This is an AUD $43 billion, 8 year, 100Mbps plan.

New Zealand has a more modest concept to connect up most rural schools at 100Mbps while looking for a spill-over effect for the wider rural community. So, in essence, even after completion of the government-backed 10 year plan to upgrade the network, the broadband most Kiwis will get at home will be 100 times slower than Korea’s.

With these numbers in play Australia and New Zealand look to Korea for inspiration as to how to use this new kind of network.

Sure enough, entertainment is the big thing; lots and lots of television channels, lots and lots of options, lots and lots of downloads, and lots and lots of gaming. There must be something satisfying for Korean gaming company Neowiz to know that they often have 2 million users simultaneously on-line in just one game.

It’s the kind of thing that 100-strong Wellington game studio Sidhe Interactive looks forward to. Founder Mario Wynands says fast broadband means the company will be able to get around the restrictions and the profit-split imposed by shrink-wrapped game distribution.

Even a toe-in-the-water trial of one downloadable game produced 30,000 downloads a week for Sidhe at over $9 a pop, with a forecast sales life of a couple of years.

But governments are united in claiming they are not investing for the benefit of gaming alone; apparently there will be E-learning and E-health, and cloud computing. If you are not sure exactly what someof those things are, join the club, but if we built the infrastructure, everyone seems pretty sure these are the kinds of new things will develop.

What is a sure bet, is that really fast broadband networks will deliver the coup de grace to the ability of the major free-to-air television networks to aggregate large audiences. That was the view of speaker Kim Dalton, the ABC’s Director of Television, who also says these same broadcasters will need to act as senior partners to new companies intent on exploiting the technology.

So, if we do build it, which it seems we will, and they do come, which those that know have confidence will happen, who’s going to lose out?

According to Dalton, that would be free-to-air TV networks. He predicted that audiences would fragment, heading to lots of low cost channels viewable over any number of platforms and services, and that will mean networks won’t be able to afford to create local content.

This is why every company in the production broadcasting chain needs to be reassessing their strategic plan and approach, dropping the old business models along the way.

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