Shortened Windows Drive South Korean Digital Movie Sales to No. 2 Behind U.S.

Move over Japan. After years of lagging sales, South Korea has emerged as the No. 2 market for digital sales of movies behind the United States, according to new data from Futuresource Consulting.

The London-based research firm said consumer spending on transactional VOD has increased 800% during the past six years largely due to a shortening of the theatrical window.

Dubbed “Super Premium” and introduced in 2013, the campaign afforded consumers with access to theatrical titles four weeks after their box office debut — shortened from 12 to 16 weeks.

Disney and Sony Pictures were the first studios to incorporate the shorter window, followed by other studios in 2014.

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The Super Premium window has become one of the biggest revenue drivers for the Korean market and typically accounts for two-thirds of transactional revenue, a key factor in the renaissance of the South Korean home video market — and diminished piracy, according to Futuresource.

The report found inconclusive evidence whether the shorter theatrical window negatively impacted exhibitors – as is the rallying cry against narrowing the window in the U.S. and elsewhere.

Futuresource found that the South Korean box office remained steady following the “Super Premium” rollout; albeit at a slower growth rate than before the campaign began.

The report found the Super Premium VOD/EST window has jumpstarted a South Korean home video market in decline following ongoing shrinking packaged-media sales.

“We could see this initiative rolled out to further territories, leveraging South Korea as a leading example,” Futuresource said.

It cautioned that shorter theatrical windows must still be analyzed as to their impact on box office.

“Perhaps [box office revenue growth] could have been higher had this not been introduced,” Futuresource reported. “What is clear is that traditional windows are coming under increased pressure, faced with a fast-paced, digital-first landscape.”

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