South Korea Tries VOD in the Theatrical Window

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We’ve seen distributors in the US try to deliver video-on-demand within the theatrical window before, but audiences weren’t really that enthused about the idea. South Korea on the other hand, has just gotten content injections from Sony Pictures and Disney to give concurrent theatrical and VOD release another whirl. With streams priced at about $9, about 20% over the average movie ticket, it’s far more economically attractively than the US attempts.

Wall Street Journal has the details:

South Korea Disc vs. VOD via Wall Street JournalSouth Korea has one huge advantage over the US, and that’s that the movie and cable business is pretty much a monopoly there and VOD is incredibly popular. The money is going into the left pocket instead of the right, but negotiations do not require the cooperation (or silence) of a dozen theater chains, none of which is owned by a cable company, and artificially high prices to protect the theatrical window.

Of course, even with the very different market in South Korea, there’s nothing to say that this is going to be the new norm. Each movie released by Sony and Disney will be judged on a case-by-case basis, and chances are good that if a film is pulling droves of viewers into cinemas, it will see a more traditional home video release window.

There’s no doubt that this kind of distribution will come to the US eventually, although probably only for smaller movies. (I’m looking at you, Much Ado About Nothing). With many movies these day pending just a few weeks in the theater, being able to push them to VOD for something like $20 a pop is probably not a bad idea. The big difference between Korea and the rest of the top-ten world is the piracy rate. To call it rampant, especially with the massive cheap broadband available, would be kind.

So a monopoly like this, with virtually nothing to lose on the home video end, is the ideal testing ground for early VOD. Early runs have increased revenue by up to 30%, something that might give studios pause on the smaller movies they release. We’ll see how this all turns out, but I don’t expect anyone to try again in North America on major theatrical titles for at least 3-5 years.

Via: [Wall Street Journal]

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