Major distribs skittish about commitment

SEOUL — After endless false starts to launch homevideo revenue sharing in Korea, U.S.-based system provider Supercomm is scheduled to begin service in May, with rival Rentrak possibly right on its heels.

The launches would be coming amid a rental market in Korea that has been in a serious slump for the past few years, and while the major distribs generally agree revenue sharing could help, they have been skittish about actually making a commitment.

Homevideo unit sales have plunged as Koreans have sought out other forms of entertainment like online games and have packed into new state-of-the-art multiplexes. Reliable industry figures are not easily available, but according to one distrib’s estimates, total sales in 2000 were around $113 million, down 58% from about $270 million in 1995.

Disney is the only major on board the Supercomm launch, which figures, since Supercomm is a sister company of the Walt Disney Co. Locally, Supercomm is being managed by Seoul-based Young Distributors.

CIC and especially Warner Home Video have been more closely aligned with Rentrak Korea, which had planned to start service in April. But with both having serious reservations, Rentrak will most likely begin service in May with product from domestic film suppliers, a company rep says.

A third contender, local firm IVS, folded last autumn before it had the chance to launch a rev-sharing business. Its computerized monitoring system was deemed to be too expensive and the company lacked experience.

Fox and Columbia, which along with Disney, participated in a Supercomm revenue-sharing test in the suburbs of Seoul last summer, pulled out of a planned launch in February and are said to be concerned about royalty costs. While neither Col nor Fox has ruled out joining a rev-share program, both are seeking higher guarantees before committing.

Still, Lee Boong, sales director for Walt Disney Home Video Korea, is bullish. He points to the success of Supercomm’s summer testing in the Seoul satellite city of Ilsan, where the 49 small participating shops had revenue spikes of up to 20%. “All had increases,” he says. “All want to join again.”

At its peak during the year of the 1988 Seoul Olympic Games, video rental shops in Korea numbered a whopping 40,000. The most recent estimates have them down to around 11,000 — mostly struggling mom-and-pop shops with limited copy depth.

The initial Supercomm launch will involve 200 to 300 shops in eight major cities.

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