digital korea plus8star

Digital KoreaLeadership Expedition | European Media CEOs

Benjamin Joffe | Plus Eight Star Ltd | January 2008

0. Introduction

1. Industries under pressure

2. Innovation in Asia?

3. Digital Korea

4. Key players

5. To keep in mind

Agenda

0. Introduction

Benjamin JOFFE

밴자민 저프

4 years

1 year

3 years

www.plus8star.com

China | Japan | South Korea

Innovation Arbitrage

Mobile & Internet services

The future has already arrived.

It is just not evenly distributed yet.

William Gibson

Science fiction author & father of the cyberpunk genre

Coined the term "cyberspace" in 1982

1. Industries under pressure

Source: Tomi Ahonen, 2008

The 7 Mass Media

1st Media Print

2nd Media Recordings

3rd Media Cinema

4th Media Radio

5th Media TV

6th Media Internet

7th Media Mobile

Transition lessons to Internet

Source: Tomi Ahonen upcoming book Mobile is the 7th Mass Media Channel, 2008

Effects will be:

• Incredibly rapid cannibalization of content,

formats, and audience time

• All business models migrating to internet,

with new models and formats appearing

It will probably also kill some content types.

For example:

• The daily newspaper

• The music CD

Very likely other content types will adjust,

such as TV debates using YouTube content.

The 7 Mass Media

Music score Print

Record, CD Recordings

OST Cinema

DJ Radio

MTV TV

iTunes Internet

RT, RBT… Mobile

CONSULTING

News websites

Expert blogs

White papers

…

FASHION!

Fashion shows

Mobile & Internet broadcast

Made in [far-distant countries]

And fashion publishing…

PUBLISHING

Free websites (incl. NYT)

Ad pages

Classifieds

JOURNALISTS

Low wages

Tight deadlines

Editorial cut

At one point my boss told me “your

experience is getting in the way”.

Former Head of CNN Asia

Today, as a blogger I can pursue topics

I care about and have more influence

than when I was with CNN.

So what can we do?

Web 2.0?

Consulting 2.0

Fashion 2.0

Publishing 2.0

Journalism 2.0

Media 2.0

2. Innovation in Asia?

General assumption #1

Everything from the US is great

General assumption #2

Everything from Asia is weird(and sometimes funny)

Japanese like texting on mobile

Anonymous manager at a telecom company in 2000

Because they have small fingers

Asians like avatars

Anonymous manager at an Internet company in 2005

Because they read mangas and watch animes

Chinese like ring-back tones

Anonymous manager at a foreign media company in 2006

Because they go to KTV a lot

Giving the wrong explanation

to the right question

Make fun

Stereo type

Re-invent

Adopt

Self-evident

Oblivion

CC | +8*

The Not-Invented-Here

Circle of Oblivion

Copy-to-China

Why look at Asia?

1Because some Asian markets

are strategically important

Official partner of Chinese Web2.0

fundraising since 2005

Quiz

Alexa School of Investment

Crowdsourcing Quiz

Which Asian Internet

services do you know?

Global China Japan South Korea

1 Yahoo!

2 Google

3 YouTube

4 MSN

5 Windows Live

6 MySpace

7 Facebook

8 Wikipedia

9 Hi5

10 Orkut


1 Yahoo! Yahoo Japan

2 Google Yahoo

3 YouTube Google Japan

4 MSN Google YouTube

5 Windows Live

6 MySpace Google Korea

7 Facebook YouTube

8 Wikipedia Livedoor

9 Hi5 Yahoo Wikipedia

10 Orkut


1 Yahoo! Baidu Yahoo Japan Naver

2 Google QQ FC2 Yahoo

3 YouTube Sina Google Daum

4 MSN Google YouTube Cyworld

5 Windows Live Netease Mixi Nate

6 MySpace Taobao Rakuten Google

7 Facebook Sohu Nicovideo YouTube

8 Wikipedia Tom Livedoor Empas

9 Hi5 Yahoo Wikipedia Gmarket

10 Orkut 56.com Goo Auction


1 Yahoo! Baidu Yahoo Japan Naver

2 Google QQ FC2 Yahoo

3 YouTube Sina Google Japan Daum

4 MSN Google YouTube Cyworld

5 Windows Live Netease Mixi Nate

6 MySpace Taobao Rakuten Google

7 Facebook Sohu Nicovideo YouTube

8 Wikipedia Tom Livedoor Empas

9 Hi5 Yahoo Wikipedia Gmarket

10 Orkut 56.com Goo Auction

3. Digital Korea

Population

South KoreaFrance

127 million49 million61 million

Japan

GDP (billion €) 3,4006201,490

GDP/Capita PPP 22,900 €11,500 €20,800 €

Broadband subs 28 million15 million15 million

China

1.31 billion

1,020

1,600 €

52 million

Penetration 21%30%24% 4%

Internet users 88 million35 million35 million 200 million

Sources: ARCEP, MIC, TCA, MII, CIA World Fact Book, Internet World Stats

Broadband country

The fastest broadband connections are in Korea and Japan.

OECD Report, July 2007

Thanks to fiber optic cables the broadband

connections in Japan were up to 10 times faster

than the OECD average. Japan also had the

lowest relative monthly broadband charges/Mbps

# CountryHouseholds

subscribing

Avg. speed

(mbps)

Price/month

for 1 mbps,

fastest tech.

(USD PPP)

Overall

Score

1 Korea 0.90 45.6 0.45 15.73

2 Japan 0.52 61.0 0.27 14.99

3 Iceland 0.83 6.0 4.99 12.14

4 Finland 0.57 21.7 2.77 12.11

5 Netherlands 0.73 8.8 4.31 11.87

6 Sweden 0.49 18.2 0.63 11.54

7 France 0.49 17.6 1.64 11.41

12 US 0.51 4.8 3.33 10.47

Source: OECD, 2007

Consequence #1

Internet penetration and

speed

Consequence #2

Internet literacy

Consequence #3Internet as a retail channel for

material, immaterial goods and

human intelligence

“Ubiquitous” Korea

Online services

Navigation systems

e-Commerce

e-Government

Intelligent home

Intelligent objects(tagged and connected)

“Ubiquitous” Korea

Convergence & pervasive

technologies

Quoting „Digital Korea‟(by Tomi Ahonen, August 2007)

1. Over 50% citizen use Internet banking

2. 63% use mobile phones for payment

3. 25% of all Visa cards are provided by mobile

phone

4. m-commerce transactions for non-telecom goods

exceeded $1bln in 2006

5. 73.6% filed taxes online as of January 2006

6. Electronic Signature Law and e-Commerce Law

And more!

Online game market is 57%

of the total game market in Korea(5% in US, 2.5% in Japan, shifting to online)

Source: Game White Paper 2007

Two?Online Newspaper Associations

Source: NYT, 2007.11

Are we so different?

China Takes unique steps to combat web addition (China)

USA Today | 2005.7

Internet addiction more serious than OCD (Israel)

United Press International | 2007.8

Computer addiction: What is it? (USA)

Psychiatric Times | 1998.8

“US full of Internet addicts”

Study from Stanford FacultyBreitbart.com | 2007.10

Rich media demand

Ad spending shift

Technology trends for 2008Korea Times | 2008.01.14

Global ranking search engines(ComScore, 2007.10)

Rank Engine Reach PV

#1 Google 750 million 37

#2 Yahoo 750 million 8.6 bln

#3 Baidu 200 million 3.3 bln

#4 MSN 750 million 2.2 bln

#5 Naver 35 million 2.0 bln

#6 eBay 750 million 1.3 bln

Cyworld Syndrome

Transition of Internet icons

1996~1998 2002~20031999~2001 2004~2007

Yahoo Korea Daum CafeFreeChal

Damoim¹

Cyworld

Naver

Text Based

Simple searchOpen Community

Interactive space

School Network

Personal Resource Planner²

Multimedia Portal

Cyworld Syndrome

New model led by

Cyworld1st generation’s model

From Information-centric to Human-centric

“In a connected age,

sharing information is power”Tomi Ahonen

4. Key players

Services

18 million users

“Easy to study” Blogging serviceInstant messaging

Internet portal Internet portal

Services

Key figures

Market Cap7.3 billion EUR

Employees2,086

3Q2007170 million EUR

2007650 million EUR

Operating profit margin>40%

Search

Display ads

E-commerce

Online games

Services

Market Cap 702 million EUR

Employees 1,723

3Q2007 108 million EUR

Operating profit margin 7.4%

Key figures

Online and offline life

permeate each other

New hybrid form

Online + Offline = Life

Citizen media

Web 2.0?

How about those concepts?

Meta-blogging

Content scrapping

Social Process Re-engineering

Trust-based information sharing

Personal Resource Planning (PRP)

5. To keep in mind

1Are you the target?

2Look for concepts

Adapt the rest

Thanks!

[email protected]

+86 1371 880 3321

Skype: benjamin0123

mailto:[email protected]

Appendix

About +8*

• [+8*] (Plus Eight Star Ltd.) is a consulting boutique

operating from Beijing, China

• To learn more about our name, please visit our site at

www.plus8star.com!

The company

• Provide strategic analysis to operators & content providers

to anticipate their markets

• Bring best practices in business models, service design

and marketing to Internet and mobile companies to

accelerate their business

• Other services range from M&A advisory, market entry,

partners identification to negotiation support

Our services

• „Innovation Arbitrage‟: bridging differences in market

maturity worldwide, using Asia as a source

•Strategic consulting on best practices in mobile and Internet

services in China, Japan and South Korea

Our focus

• Multicultural team covering the 3 markets

• Hands-on experience with local companies

• Large network of contacts

• Cross-market & cross-cultural awareness

Local expertise and global perspective

Co-Founder & Organizer | Mobile Monday Beijing

• Leading Information and networking event related to mobile

services in China, part of the Mobile Monday global network.

• 17 sessions since March 2006

• 2000+ members, 50+ presentations

• www.mobilemonday.cn

Managing Director | Benjamin Joffe

• 8 years in Japan, Korea and China

• Tel: +86 1371 880 3321

• Skype: benjamin0123

• Email: [email protected]

The future has already arrived. It is just not evenly distributed yet.

William Gibson

Science fiction author & father of the cyberpunk genre

Coined the term "cyberspace" in 1982

Mobile & Internet


About +8*

© Copyrights 2008. All rights reserved. www.plus8star.com

http://www.plus8star.com/

Mobile & Internet


“Inside Cyworld” Report | December 2006


• Cyworld is also very relevant to you

– A broadband country since the late 90s, South Korea is today enjoying

super-high speed broadband and its society has evolved accordingly,

making Korea today the most „Internet literate‟ country on the planet and

a perfect laboratory for new broadband Internet services.

– Among Korea‟s success stories, the online community Cyworld has

been the shiniest star: over 30% of South Korea‟s population, and 90%

of Korean netizens in their 20s have a personal page on the service.

• What you will learn

– The critical elements that made Cyworld a success

– The money-making services and payment systems generating 200

million USD

– Original services that could help differentiate and plan some great

innovations!

• Content

– 190 slides with visual analysis & interviews | PDF License : 2,000 USD


Mobile & Internet


“Inside QQ” Report | January 2008


• First, Tencent is China‟s largest IM service (270 million accounts vs.

MSN‟s 250 million) and casual gaming portal.

• Second, Tencent‟s revenues will be in excess of 400 million USD in

2007, most of it coming from non-advertising services.

– What are those services?

– How can they make users pay for Internet services?

– What are the successful business models at work to achieve such

results?

• Third, for numerous Chinese users, QQ is synonymous with Internet

– What is the social impact of QQ?

– What kind of economy & ecosystem are being created?

• Last, Tencent is considered as China‟s greatest Internet success

– What are Tencent‟s latest strategic moves?

– What is their ambition for overseas markets?

• Content

– 185 slides with visual analysis & interviews | PDF License: 3,000 USD


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