FTA effect on media small: experts

The free trade agreement with the United States will have little effect on both traditional and new media markets, U.S. specialists said yesterday.

In a special seminar to kick off the three-day Seoul Digital Forum held at the Sheraton Walkerhill in eastern Seoul, Columbia University economics professor Eli Noam and Boston Consulting Group senior vice president Philip Evans spoke on the U.S. FTA and its impact on media.

“FTAs have less effect on media than the imagination of critics. Media have different economics than industrial or agricultural products and are not much governed by FTA-style agreements,” Noam said.

He divided the media into three categories ― content, distribution, and devices ― and said that the FTA would not largely affect any of those sectors. “Hardware is already highly open and market access to Korea for content, such as falling quotas, has been happening anyway,” Noam said. “Broadband and other distribution makes quota reductions obsolete anyway. Intellectual property rights protection is happening anyway, and [such rights] are unenforceable anyway,” he added.

Both specialists mentioned that the FTA would have an impact on content with low domestic effects but potential global impact, such as interactive games that can be played around the world. Evans said that businesses that are significantly locally based, including traditional media such as newspapers, will not be affected by the FTA.

He also emphasized that new media businesses, such as television, music and most notably, video games, are emerging forms of media that are not controlled by a specific company or country. The impact of removing trade barriers, he said, usually depends on the tension between local and global bases of competitive advantage, but that user-created content throws doubt on that point of view.

Giving the example of the virtual world Second Life, Evans pointed out that although it was established by a U.S. firm, the value of the content, which is created by global users including Koreans, is 10 times more than the initial investment. “New media are thus accommodating global and local advantages independently of international legal and tariff arrangements,” he said.

by Wohn Dong-hee for JoongAng Daily

Analyst: China will pass Korea in chipmaking

Korean memory chipmakers will likely lose ground in global markets to Taiwanese rivals as memory prices continue to fall, a leading market analyst said yesterday.

At the Seoul Digital Forum, iSuppli CEO Derek Lidow said Korean firms’ hold on the dynamic random access memory, or DRAM, chip market will falter. Korea’s Samsung Electronics Co. and Hynix Semiconductor are the top two memory chipmakers in the world, holding about 45 percent of the market last year by revenue. iSuppli is one of the world’s largest IT market research firms.

Lidow said that the situation for DRAM is severe because price levels today are below production costs for almost all suppliers. “The market will bottom out within the next seven weeks. The overall industry will see double digit profit losses when they report [performance] in July,” he said.

In particular, Lidow said that China and Taiwan will pass Korea as the region with the largest share of DRAM production by 2010.

“There is a high concentration of production in Korea and a few key suppliers, while the Taiwan/China region has many suppliers of DRAM and is able to spread the risk of investment over many more players,” he pointed out. “This makes it hard for Korean suppliers to fight off so many competitors at once.”

He said that the situation is similar to that of liquid crystal displays, where Korea lost dominance to Taiwan and China three years ago.

“Creation of more investment capital through market liberalization or through tax incentives will help Korean industry diversify and make use of immense talents in population,” Lidow suggested. “With such a narrow base in the IT industry here, I believe that innovations will always be at risk of being taken over and copied by other regions who have the ability to attract that risk [venture] capital.”

By Wohn Dong-hee for JoongAng Daily

Starcraft 2 preview sets gamers buzzing

Korea’s e-sports scene is heating up along with the weather, as major tournaments are taking place, headed for late-summer finals. But the surprise announcement that a new edition of StarCraft is coming is stealing the spotlight and causing both excitement and apprehension in the gaming industry.

Although electronic sports, or e-sports, embraces 28 games ― with the latest addition being Dungeon and Fighter ― StarCraft accounts for the bulk of the action. The largest StarCraft tournament for teams, the Shinhan Pro League, is well underway, with the Korean Air Force team achieving a surprising three victories in nine games. Led by the legendary Lim Yo-hwan, whose gaming career has evidently not stopped despite being drafted into the service, the team is currently in 11th place. The Shinhan Pro League ― formerly the SKY Pro League until its sponsor Pantech went under debt restructuring ― is only one of the many StarCraft tournaments taking place. The games are also on the Internet and on three cable television channels devoted exclusively to computer games.

Taking the local games industry by surprise, Irvine, California-based Blizzard Entertainment announced during a game festival held May 19-20 that StarCraft 2 would soon make its debut. Blizzard, the maker of the original StarCraft, chose Seoul as the venue for the new game, but that is hardly surprising since Koreans account for roughly half of all global StarCraft sales. But the prospect of a new blockbuster game ― regardless of the fact that it will take a couple years to get here ― was enough to send the share prices of local game companies Ncsoft, Webzen and CJ Internet down when the market opened after the weekend festivities.

More interested than investors are actual gamers and the e-sports industry, because no one is sure whether StarCraft 2 will be able to take over from the original StarCraft. Although the game is yet to be released, many gamers expressed disappointment at the slightly slower movement of the units in a demonstration video, although Blizzard developers said that the speed had been toned down for demonstration purposes. Korean gamers are showing heightened sensitivity to StarCraft 2 because StarCraft itself had once been threatened by the release of WarCraft 3 in 2002. At the time, most StarCraft players converted to WarCraft, but the game wasn’t able to win players over for the long haul and they eventually went back to StarCraft. WarCraft is now just a minor part of the e-sports scene.

So what is this StarCraft 2 all about and will it live up to the hype? The game’s story takes place four years after StarCraft’s Brood War, and protagonists from the original game, such as Zeratul, Kerrigan, and Jim Raynor reappear. The game maintains the three main breeds: the alien-like Zerg, human-like Terrans and highly intellectual Protoss. Some have new abilities and a few new units were added, including several for the Protosses. The majority of the game-playing is mostly the same, except that the graphics are entirely rendered in 3D.

By Wohn Dong-hee for JoongAng Daily

Searching for the truth at Google Korea

Google is taking a dose of bitter medicine from local media. Daily newspapers are suggesting that Google’s new search service is copying Naver and that Google Korea is trying to steal information about local portals through interviews with potential candidates.

Korea’s wire service agency, Yonhap, as well as a number of daily and Internet newspapers, said that Google’s new Universal Search service is almost identical to Naver’s “integrated search” service, which was launched in August of 2000. They also accused Google of imitating Naver with its “Daily List of 100 Fastest-Gaining Queries.” Naver, run by the local firm NHN Corp., is currently the largest Internet portal in Korea, in terms of revenue and page views.

Google Korea retorted that its Universal Search service is part of a “natural trend” and that because Korean companies have cutting-edge products, Google’s service may seem to be similar in certain aspects.

Local media are also accusing Google of trying to convert researchers into industrial spies. The Financial News quoted two employees, both of whom worked for local Internet companies. One employee, who declined to be identified, said that in an interview for Google Korea’s research and development center, the interviewers asked about the details of the program the employee was working on. Another worker said that Google Korea interviewers asked about the problems of search software as well as other questions on key technology. The interviews took seven hours, the worker said. Both sources said that, after the interviews, they felt like industrial spies.
Google’s interviewers also allegedly told applicants that if they submitted the names of the five best developers in their company, that would give them an advantage in recruitment.

As of last week, Google Korea had appointed about 20 developers. When Google Vice President Alan Eustace was in Seoul last October to establish the company’s Korean R&D center, he said that the company would employ about 150 people for now.
An employee at a portal service firm who declined to be identified said, “The reason Google has come to Korea and is increasing investment here is to imitate local services and pilfer key human resources.” Google Korea, however, said that its interviews were purely for judging applicants’ abilities.

On a separate note, a Google insider, who wished to remain unnamed, complained that the company is worried about reports it claims are untrue.
“Some of the media reports about Google Korea contained false information, which can be a disadvantage to us, especially since Google is a listed company,” the source said, declining to go into detail about which reports were false.

By Wohn Dong-hee for JoongAng Daily