Korea movie biz looks forward to Internet bounce


Korea's digital revolution has launched a multibillion-dollar growth curve, though movies have yet to see any real benefits from the boom.

Koreans spent more than $260 million on music for their computers and mobile phones in 2005, and industry estimates for 2006 could have that number topping $400 million. Online gaming also has been a huge growth area: That segment should hit 1.17 trillion won ($1.26 billion) for this year, according to estimates by online gaming company NC Soft.

Korea's movie industry, however, has not yet found such online success. Ancillary film revenue makes up less than 20% of movies' incomes, forcing filmmakers to be overly dependent on theatrical revenue.

But as Korea's Internet gets even faster and telecoms roll out more platforms and video services, industry observers are beginning to hope that the same digital shift that invigorated the music industry will provide a boom to movies and other video-based entertainment.

"IPTV can definitely help the movie industry like how online music helped the music industry," says Stephen Kim, Director of Contents at Hanaro Media, the media division of Hanaro Telecom. "Soon, triple-play systems will be the standard, combining telephone, broadband and broadcasting in one package."

Hanaro Telecom, the nation's second-largest fixed-line provider, launched Korea's first IP-based video-on-demand television service in July, a precursor to full-fledged IPTV. Though Hana TV has just 100,000 subscribers, Kim thinks that once the various government regulatory agencies agree on a system for IPTV, the number of subscribers should increase quickly.

Hot on Hanaro's heels is KT, Korea's fixed-line provider and No. 2 mobile phone service provider. Nam Joong-soo, CEO of KT, announced Dec. 12 that KT plans to spend 690 billion won ($741.9 million) on media-related businesses — including 400 billion won ($430 million) for FTTH high-speed fiber optic Internet service, 140 billion won ($150 million) on IPTV and 150 billion won ($160.6 million) on content, as well as 240 billion won ($257 million) for investment in WiBro, a high-speed wireless Internet service.

KT has also begun testing its IPTV service, in anticipation of the government's authorization of the platform.

Another platform getting a major push is Digital Multimedia Broadcasting, which allows people to watch programs on cell phones and other mobile devices.