By Kim Tong-hyung
Staff Reporter

Entertainment companies and peer-to-peer networks have long been in a hate-hate relationship, but there are indications that the latest advancement in Web technologies will see them team up for a lucrative partnership.

South Korea has one of the largest digital content markets in the world thanks to world-leading broadband penetration rates, but movie studios have complained that rampant online piracy is preventing them from getting a fair cut.

However, with the government getting serious about copyright enforcement on the Internet, the studios are now smelling serious money and considering more ways to work with Internet companies to deliver their movies to the online audience, an idea that was repulsive to them just months ago.

CJ Entertainment, Korea's largest movie studio, which has about a 30 percent share as a distributor, is currently in talks with NHN, the operator of Naver (www.naver.com), the country's most popular Web portal and search engine, over the possibility of providing its movies exclusively to NHN sites.

Paran (www.paran.com), operated by KTH, the Internet unit of telecom giant KT, has become the first Korean Web site to provide downloading service for 700 films.

The Korea Film Producers Association (KFPA), which represents more than 60 movie studios, announced it will provide its movies to member companies of the Digital Content Network Association (DCNA), a group of 48 ``Web hard'' online storage operators.

The Web companies will be required to install filters based on the video fingerprinting tools of Enswers (www. enswersinc.com) and Mureka (www.mureka.co.kr), the two Web technology firms that were chosen by the KFPA. The online networks will jointly operate a 24-hour monitoring center to block illegal files that manage to escape the filtering programs.

Peer-to-peer sites that continue to fail to prevent users from trading unauthorized copies will see swift legal action, KFPA said.

``There is no doubt that this is a landmark agreement, as we are now providing a standard for copyright protection for Web hard operators and this means we won't have to hear any more excuses,'' said Lee Jun-dong, the head of Nowfilms and the vice president of KFPA.

``The violating Web hard companies will be sued in a week or two, and we would be determined to drive them out of business. We chose Enswers and Mureka as the technology providers, as they were the only companies that passed our strict quality tests, but we will always be open to more companies.''

It is still unclear how meaningful the alliance will prove to be. CJ Entertainment, which some believe owns nearly half of the copyrights of recent Korean movies, and some other major studios remain reluctant to touch the peer-to-peer networks and could opt to go their own way in establishing online channels. The winners would then be major Web portals such as Naver and Daum (www.naver.com), not peer-to-peer networks.

According to government estimates, illegal trading of movie files is estimated at 600 billion won (about $478 million) every year. Online piracy has also effectively killed the DVD market, evidenced by the withdrawal of Hollywood studios from Seoul.

The advancement in image fingerprinting technology, dubbed by industry people here as ``DNA filtering'' and used to identify and track the transmission of digital video files on the Web, is proving to be a game-changer, with movie studios now hopeful of finally locating their elusive Internet gold trial.

And with the government strengthening its clampdown on illegal copies on the Web, those filtering solutions are becoming a necessity for Internet companies, which is a boon to companies like Enswers and Mureka.

From July, the country will enforce a new anti-file sharing provision that allows regulators to shut down Web sites after a third warning over copyright infringement, with or without the complaints of copyright holders. Internet users accused of illegally sharing copyrighted files could also be severed from their Web accounts.

Early this year authorities arrested six chief executives of Web hard operators, including Son Chang-uk of Freechal (www.freechal.com), as they push forward their criminal investigation on online copyright infringement.

Enswers currently provides its fingerprinting tools to Daum (www.daum.net), which trails Naver in the search hierarchy, and SK Networks, the operator of Nate (www.nate.com) and the Cyworld (www.cyworld.com) social networking services. Mureka provides similar products to Naver.

``The business possibility is immense, and we are one of the companies that are providing the enabling technologies to help companies realize that potential,'' Jack Kim, the chief executive of Enswers, told The Korea Times.

``We think the Korean Web hard market is more than 800 billion won (about $630 million) and more than 200 companies are involved. Let's say we can clean up this market and establish a transparent structure where studios and Web hard operators could share revenue ― the money will certainly be worth the efforts.''

thkim@koreatimes.co.kr