Will IPTV Find Korean Ancillary Markets a Way out of the Darkness?
On November 5, a preview of
22nd Jump Street was held at CGV Cheongdam by Olleh TV, a division of KT. In October, Olleh TV launched a Film Premiere Service that plays films that will not receive a theatrical release.
22 Jump Street also hit TV screens after skipping theaters. The film starring Channing TATUM and Jonah HILL is a buddy comedy film that depicts the happenings of stake-out police officers. The film premiered in the U.S. in June and earned US$190 million in North Americia and US$320 million around the world. It is rare for a commercially successful foreign film to directly go to TV without hitting theaters. But Olleh TV announced that in the future, it will continually show such films.
The
22 Jump Street case cut across the recent growth of the IPTV market. Ancillary markets, and in particular the IPTV market has grown nearly exponentially. IPTV is now leading among ancillary markets, and its growth is substantiated by numbers. The number of IPTV subscribers crossed seven million in May 2013 whereas digital TV surpassed 6.1 million subscribers in November 2013. This means that 13 million households watch IPTV or digital TV in Korea. The
Korean Film Council’s
2013 Annual Report says that the digital online film market more than tripled to 267.6 billion won from 88.8 billion won in 2009. The IPTV and digital cable TV market has grown by at least 30% every year. This fact is encouraging Korean film investment and distribution companies, and branches of Hollywood studios, to keep an eye on the IPTV market.
Growth of IPTV Market Fuels Contents Development
The film industry is responding quickly to the growth of ancillary markets including IPTV. Investment and distribution player
N.E.W. first stepped into the ancillary market by setting up “Content Panda,” an IPTV-oriented contents distribution company. Content Panda will plan, develop and sell works via digital online platforms such as IPTV, digital cable TV, the internet and mobile without releasing them in theaters. Contents’ Panda’s first project is Crazy Modern History based on an original cartoon by cartoonist KANG Do-ha.
Crazy Modern History depicts a dangerous love affair between the 32-year-old man Hyun-dae and the 27-year-old woman Min-ju. The film was released in July.
“The expansion of ancillary markets is a global trend,” said KIM Jae-min, head of the Business Division at Contents Panda. “We are planning to steadily invest in and produce adults-only VOD contents based on popular webtoons in the future.” “As for film imports, which typically come from a few countries such as the U.S., we will diversify contents by importing works from other countries and supplying them to TV,” KIM added.
Warner Brothers Korea also jumped on the bandwagon by launching its IPTV Premiere Service. On October 16, Blended fired the first salvo, followed by Tammy and Jersey Boys, a Clint Eastwood film based on a musical. Such moves by Warner Brothers Korea are interpreted as a step toward developing a new distribution channel separate from theaters in line with the era of ten million IPTV subscribers. In particular, consumers express much anticipation for this initiative since the online digital channel allows them to watch films faster and more conveniently by way of digital platforms.
The growth of IPTV suggests a new paradigm in the Korean film distribution market. Industry watchers say that ancillary markets including IPTV face a turning point, six years since the introduction of IPTV and digital cable TV. This is because sales are growing sharply, and ancillary markets are expanding in size and embracing new platforms such as cloud DVD and mobile service. In particular, a drop in illegal downloads that arrested the growth of ancillary markets is raising people’s awareness of the importance of consuming contents legally. Some conservatively forecast that the digital online market will surpass the scale of the past video tape rental market.
In particular, low-budget films, so-called indie and art films and other specialty films can develop their channels to create new customers, making the growth of the IPTV market noteworthy. IPTV is a popular alternative platform for low-budget films since they have trouble finding theaters that will show them. Some IPTV services are building new models by developing independent marketing tools for low-budget films and creating an exclusive channel for them.
Integrated Data Collection Systems and Transparent and Accurate Calculation System
But the steady growth of the digital online market is contingent on the fulfillment of many tasks. First of all, the transparent and accurate calculation of viewing statistics is urgently needed. At the moment, theatrical revenues are transparently calculated by the KOBIS integrated box office data network, whereas the digital online market is devoid of an accurate calculation system, so no one can determine accurate figures. Therefore, this forces digital market participants to address many issues such as connecting computer systems at various companies and working out contracts with CPs (Contents Providers). The Korean Film Council is pushing forward with plans to create an integrated online screening computer network, but it is facing some difficulties including the coordination of conflicting interests.
Erotic films and so-called adult-only contents should not be ignored. Of late, erotic film screenings are on a gradual increase in the digital online market including IPTV. This is attributable to market players’ active production and distribution of erotic films. Accordingly, some are voicing the opinion that IPTV must devise strict standards on erotic film screenings, and that a policy should be made to limit the distribution of erotic films. For example, KT Media Hub introduced a condition to only screen adult films that had a theatrical release in Korea of at least 20 screens, or which screened at 19 international film festivals.
Recently the digital online market has been showing explosive growth. But there are many hurdles for the market to clear before it becomes a major competitor to theaters in the distribution market, instead of remaining a new platform. This is why Korean cinema must continue paying attention to the moves of the digital online market and help to make the market substantial.