Korean film biz eyes new media challenges
EmptyPUSAN, South Korea -- Executives from Google, SK Telecom's media contents partner iHQ and gaming giant Gravity spoke about the future of film Tuesday, citing challenges and opportunities posed by South Korea's rapidly developing new media sector.
Traditional theaters cannot keep up with the growing number of Korean films made each year or with changing consumer habits, said Jin Choi, executive vp of iHQ, the Seoul-based talent manager and film company partly owned by SK.
Speaking on a panel discussion at the first Asian Film Market here (HR 10/16), Choi said that the challenge will only grow as more Koreans connect to the Internet via cheap big-screen TVs at home. "New windows for distribution beyond theaters must come soon, no matter how many movies Korea makes," he said.
In a country where kids already consume a great deal of entertainment on Internet handsets, Choi said SK and iHQ "are testing new content and distribution models as fast as we can."
A Los Angeles office helps iHQ work with Hollywood in developing content and SK's investment in China's No. 2 Telco shows that both firms have their eyes on bigger markets, Choi said.
To meet Korean demand for filmed content delivered online, Google will localize the video services it acquired through its Oct. 9 purchase of U.S. consumer-generated video Web site YouTube. A day after the purchase, Google announced it will establish a research and development center in South Korea.
"With all new strategies, Google internationalizes and localizes within 90 days. Korea is no different," said Google head of Korean business development Sang Kim.
Content creators eyeing the success of the Mountain View, Calif.-based company could find one distribution model that splits advertising revenue particularly attractive.
Google, which gets more than 98% of its revenue from ads, found that when it put a small ad on a free video download of popular U.S. television host Charlie Rose -- after initially offering his talk show episodes for $0.99 -- viewers doubled and revenues rose two-and-a-half times, Kim said.
"Google's video services will be a key leverage to make money for content creators and self-distributors here in Asia," Kim said, adding that Google is in talks with a few South Korean movie companies.
Already making plenty of money outside the theater is Gravity, the Seoul-based maker of "Ragnarok," the No. 1 online game in Japan and five other Asian countries four years in a row.
Gravity earns "Ragnarok"' royalties from 20 countries and has 40 million users worldwide, said Oh Sang-jun, Gravity's managing director for strategic planning. Pre-selling the rights to distribute a "Ragnarok" sequel -- much the way one presells a film -- earned Gravity $60 million from partners in China, Brazil and the U.S.
"The future of cinema is in games," said Oh, who showed off a sample of a Gravity game in development.