A new study says South Korea’s TVOD and SVOD services are soaring, with the country’s transactional video-on-demand market one of the most successful in the world.
One of the keys to TVOD’s success? Relaxed release windows that give consumers access to content as quickly as four weeks after it debuts in theaters.
The report, Futuresource’s Video Insights, says the strategy has “allowed for early monetization by capitalizing on existing hype and marketing spend around each film.”
Despite the success of the “Super Premium Video” program, some studios recently have exited or reduced their participation in the program. That might change as the COVID-19 pandemic has caused theaters to close around the world.
Will US see more early releases to streaming?
Could Korea’s success with its TVOD program be a case study for US distributors of how studios can ease release windows without impacting cinematic release? Possibly. At the very least, it’s worth considering given the conundrum Hollywood is facing.
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Add to that the worry that many theaters won’t survive mandatory closures during the pandemic, despite potential help from government subsidies. The theatrical market has been struggling for years as viewers have increasingly turned to streaming services. Casualties among cinemas have been widespread in the US, well before the pandemic emptied seats.
COVID-19 has made it worse. US movie theaters saw their worst box office weekend in 22 years March 13-15, grossing just $55.3 million. Almost every film saw revenues drop more than 60%. New York City and L.A. ordered all theaters closed March 17, an order picked up across the country shortly thereafter.
NBCUniversal in mid-March announced it would break theatrical release windows for some of its films, making a number of titles available for $20 on a slew of streaming services.
When it made the announcement, the Comcast-owned company said it didn’t plan to make the entire 2020 schedule of content available… but with the worsening conditions of the market, and the continuing spread of COVID-19 across the US, that’s a decision that likely will be revisited – multiple times over the next few months.
Theatrical release windows have been a contentious topic between streaming services and studios, and it has been adjust in the past couple of years, making more movies available earlier. But theater owners have played a big role in keeping that window (mostly) closed despite streamers willingness to pay big bucks for early releases.
The long-term impact of the pandemic may reduce theater owners’ voice in the matter as more cinemas are rolled up.
Korea’s SVOD market is hot
Korea’s SVOD market, meanwhile, also has seen big gains in recent years, as consumers spent 61% more on SVOD services in 2019, closing the revenue gap with the TVOD market.
Netflix has acquired a significant library of local language content, helping it to build and retain a local audience. Netflix subscriptions currently account for nearly half of SVOD consumer spend and service subscriptions in the country.
The streamer has been able to deliver new series on a regular basis, but the pandemic-driven shutdown of new content creation may have an impact on that ability in the near term.
Netflix isn’t alone in its SVOD success. Korea Telecom, SK Broadband and LG U+ are all looking for ways to grab a piece of the SVOD pie. In some cases, they’ve simply partnered with Netflix, making it available to their customers and centralizing billing. In others, they’ve looked to local SVOD partners.
The bottom line
Korea has a number of market factors that has helped it expand its streaming play. It has superb high-speed Internet network infrastructure. It’s a very early adopter of commercialized 5G wireless. It’s citizens have a good amount of disposable income and, most importantly, it has a consumer mindset that has been willing to pay for premium monthly services.
The demand there for more SVOD services remains high and is likely to help spawn additional home-grown video services.
But those same market factors exist in many developed streaming markets, including the US, where the art of getting more for more premium content has been refined by pay-TV operators. HBO, Showtime, Starz, and more are all services that started as premium pay-TV channels, after all, and all have evolved into streaming services as well.
Does SVOD opportunity remain in the US and other big markets? Of course it does, especially as viewers cope with stay-at-home rules during this pandemic.
Stay tuned… and stay well.