Breaking the Speed Barrier

As you read this, I’m on a plane bound for Seoul, South Korea. Through our office there, I met a few members of the Korean Advertisers Association (KAA). They requested someone from the U.S. speak to a group at Korea University on the state of digital marketing here. (Do I have news for them!)

My speech follows a lecture from a professor at Japan’s Nomura Institute, “Ubiquitous Network Applications for Marketing Innovation in Japan.” (Now that seems like a juicy topic.) Regardless of subject matter, the thing I most admire is the KAA’s willingness to seek out insights from around the world. I believe too often we’re afflicted with a “the-world-revolves-around-us” syndrome. We don’t look to learn from our global brethren often enough.

During my research, I learned a good deal about South Korea’s technology explosion over the past five years. I was surprised to learn it’s the most broadband-enabled country in the world, significantly eclipsing the U.S. According to the Yankee Group, global broadband penetration among Internet households (a category in which Korea and the U.S. are on par, with over 60 percent penetration) looks like this:

South Korea 57.4%
Canada 49.9%
Japan 25.6%
United States 22.8%
Sweden 18.4%

Perhaps the New York Times put it best in May, when it wrote, “America’s Broadband Dream is Alive in Korea.” We learn, “Koreans are offering a glimpse of what wired societies are supposed to look like, where fast Internet connections vastly increase access to information, help lift productivity and create new markets.” One could argue Koreans turned their country into a giant petri dish for the visionaries who, a few years ago, imagined a future of near-infinite digital possibilities.

Even the thing we call broadband here in the States is a mere shadow of the speeds they have in Korea. Most Americans on DSL or cable zip around the Internet at 1 to 3 megabits per second (mbps). Koreans access broadband services via fiber optic cable at up to 40 mbps.

Much of South Korea’s technology explosion has been subsidized by the government. By granting low-interest loans as well as tremendous grants, the country’s leadership has managed to defray the cost of building an infrastructure. Just two months ago, the Korean government (through the Ministry of Information and Communication) announced it would install the world’s fastest integrated broadband network, with 50-100 mbps connection speeds. It’s anticipated to reach completion by 2012.

In addition to access and speed, Korean broadband connections are significantly cheaper than they are here. Compared to an average of $50 per month for high-speed access in the U.S., the average Korean spends the equivalent of $25 to $27 per month for blazing speed.

How is broadband affecting South Korean society? Consumers are shifting more and more of their lives to computers. They watch soap operas, attend virtual test preparation schools, sing karaoke, and, of course, play games.

Not surprisingly, gaming and other forms of entertainment are the big draw. Two years ago, the Seoul Broadcasting System’s interactive division began charging micro-payments to watch its streaming video online. Today the service has almost two million active users, and earns 4,000 new sign-ups a day.

Online banking has also taken off. The number of Koreans using online banking services tops 20 million (nearly 42 percent of the nation’s population).

E-commerce, a novelty in Korea just a few years ago, has skyrocketed to represent 8.7 percent of all retail sales. It’s expected to double by 2005, according to global consulting company Accenture.

All in all, there’s a vast world out there from which we can learn. Despite its dramatic rise in Internet and broadband penetration, Korea has not seen significant maturation in the e-marketing sector (as we have here in the U.S.). They’re eager to learn from our mistakes, and to find out what’s working here today. Hopefully, they can avoid the roller coaster ride we endured.

It should be a very interesting trip. I’m eager to venture out of my digital bubble, and will be sure to report my insights.

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