Vid biz makes DVD push in South Korea

Some 600 titles now available, compared to 50 last year

SEOUL — Gung-ho for high-tech tools like the Internet and their omnipresent cellular phones, South Koreans have been much slower in taking a shine to films on DVD.

With VCRs already a household fixture, a proliferation of other entertainment pursuits and cheap video-rental shops seemingly around every corner, many consumers have yet to see the value of DVD players.

Domestic makers like Samsung may be recording brisk sales overseas, but in a country with some 47 million people, only 80,000 machines have been sold compared to the 85% penetration rate for VCRs, with 10 million sold.

Still, on the software side, Warner Home Video Korea — like its domestic counterpart did in the U.S. — is taking an aggressive stance in pumping up interest in the DVD format.

In with the new…

“Our position is to create a new market rather than wait for the market to expand,” said Warner Home Video Korea managing director Harrison Lee. Along with reduced prices to consumers, the company has also introduced a “buy three, get one free” strategy.

Other major distribs are taking more tentative steps. Some 600 titles are currently available, compared with around 50 last year.

“I regard this year as the first,” said Lee.

With the big exception of Warners, which is eager to cultivate a DVD rental biz, the other distribs are focusing on the sell-though market.

Whether the sell-through biz for DVDs can succeed where the effort with videocassettes did not remains to be seen. Other than children’s titles, Koreans almost wholly prefer to rent movie titles rather than buy.

A big reason can be summed up in one word: “ajuma,” or married woman.

Korea’s legions of housewives are as tough and practical as they come in controlling a family’s finances. And pre-packaged movies rarely make it into the shopping cart.

“From a housewife point of view, it is not an educational thing,” said Jesse Lee, Korea representative director of Twentieth Century Fox Home Entertainment.

Marketing to young adults is not much easier, with many still living with their parents until getting married.

“I think the young guys don’t want to stay at home. They spend lots of time with their friends,” said Andrew Kim, managing director for Cinetown, with 670 franchisees, the nation’s only video chain except for a well-organized competitor with five outlets.

Tiny niche

Very few of the other 12,000- 14,000 mostly struggling mom-and-pop video shops are renting DVDs. Even fewer are selling them.

Daunting as the challenges may be, major distribs still believe the DVD format will eventually prevail over videocassette.

On Dec. 8, Fox hopes to fire some steam into the DVD biz with the release of “Titanic,” the latest James Bond installment and 14 other titles.

The focus for this DVD push has shifted from mom-and-pop vid shops to music retailers and electronics outlets, where consumers are already in a buying state of mind. Discount-store chains, only 10% of the total retail market but growing rapidly, also have potential, Jesse Lee says.

Within the last few years, French-based Carrefour has opened 20 branches, U.S.-based Wal-Mart six and homegrown E-Mart 24.

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