By Kim Tong-hyung
Staff Reporter
Disney is encouraging Koreans to use their mobile phones to catch up on the latest movies and television shows. It remains to be seen whether the major Hollywood studio can compete with the grainy but pirated free videos downloaded from the Internet.
In a deal to be announced Friday, Disney agreed to provide its content to the mobile video services of SK Telecom, the country’s biggest mobile telephony operator that controls more than 50 percent of the market.
SK Telecom’s third-generation (3G) subscribers, which account for more than 8.6 million of the company’s 21 million customers, will be able to get more than 30 Disney movies and a wide range of television programs on their data-enabled handsets, the companies said.
Films will be available on the handsets within two months of DVD releases, Disney officials said.
However, users will not be able to download content or beam them on other devices such as computers and televisions, as the movies will be streamed on SK Telecom’s mobile video platforms ``Nate’’ and ``June.’’ Although the wireless carrier has yet to finalize the price, the films are expected to cost around 1,000 to 2,000 won (about $1.30) per viewing.
Disney has a wealth of experience in providing videos to hand-held devices, being the first Hollywood studio to allow its movies to be downloaded for Apple’s iPod media players.
The company’s deal with SK Telecom represents its first movie deal with a wireless carrier outside of North America.
``Korea is an important market for us, as it gives us an opportunity to operate on different platforms,’’ said Robert Gilby, senior vice president and managing director of Disney-ABC International Television Asia-Pacific, in an interview with The Korea Times.
``We recognize there is huge potential here from all the digital platform development taken place, enabled by the advancements in broadband penetration and mobile communications … We believe there is room for growth in video-on-demand services and subscriber-based mobile services,’’ he said.
Although Disney declines to reveal any business targets for its mobile offerings, every little step forward would be much appreciated, as the company has been increasingly focusing on on-demand movie services here in an attempt to squash the local appetite for pirated movies.
Disney is already providing its movies to Internet protocol television (IPTV) operators KT and SK Broadband and cable television operator Home Choice for video-on-demand services.
Major Hollywood studios have been pulling out from the home video and DVD business here due to rampant piracy. However, the same problem is haunting the VOD market as well, as evidenced by SK Broadband chief executive Cho Shin recently claiming that the success of IPTV in Korea would depend on the suppression of illegal downloads.
And the current struggles of the mobile television market here doesn’t add much encouragement.
SK Telecom has been offering pay-T.V. over mobile handsets through its affiliate, TU Media, since 2005. However, TU Media has around just 1.8 million subscribers for its satellite-based digital multimedia broadcasting (DMB) services, when it needs more than 2.5 million customers to be profitable.
Gilby is optimistic that mobile could change the way Disney delivers its products, and thus strengthen the loyalty of customers. But it remains to be seen how many mobile users would be willing to squint their eyes on a tiny screen to watch a full-length movie on a crammed commuter train.
``I am less concerned about mobile, as that is a very specific platform, but online piracy is a big issue here, although Korea has made progress in forcing regulation recently,’’ Gilby said, who claims that the Korean market is in a period of transition.
``I am a firm believer, that when given the choice, consumers would choose legitimate services over illegal copies,’’ he said.
``What we need to do is build those legitimate services, and as the industry grows and we continue to enforce the rights to protect content, I believe customers will move increasingly to legitimate services.
``The challenges for mobile television platforms here are economic, whereas the services are very good. It’s really about how you make business models more attractive to all participants, and I believe we will see advancements in that way,’’ he said.
SK Telecom has about 55,000 monthly subscribers for its Nate and June mobile video services. Disney follows other major studios such as Warner Brothers, Sony Pictures, HBO and Fox in providing content to SK Telecom users.