Where Have Video Rental Shops Gone?

According to the Korean Film Council, the number of video rental stores across the country once reached about 30,000, but dropped to just 8,000 last year. If you consider that there are 10 million households in Korea, the number of video rental shops dropped from one shop per 330 households to one in 1,200 households. Video rental shops today are rarely found in neighborhoods except in large apartment complexes.

Sales of video tapes have also plummeted. The video industry estimates that what was once over 1 trillion won in annual video tape sales dropped to 280 billion won last year. Sales of DVDs, which were expected to replace video tapes, are also faltering. Sales of DVDs have grown 30% since 1999, but a minus growth rate for DVD sales was reported last year for the first time.

Widespread illegal sharing-

Hong, a 24 year old university student, said that “it has been a long time since I visited a video rental shop because I am used to downloading movies from the Internet.” He added that sometimes he goes to a movie theater for a large screen and an excellent sound system, but he downloads movies online and watches them at home most of the time.

Illegal copying of films via the Internet is increasingly widespread. Some estimate that 90% of Hollywood movies are uploaded onto the Internet with Korean subtitles up to a month before their scheduled release in Korea. The KMV showed that the number of websites providing bootlegged movies rose from about 30 in 2003 to 77 last year. In the case of the movie ‘TaeGukGi : The Brotherhood of War’, some 4 million people downloaded it through P2P websites, and over 500,000 movies are estimated to be circulated online a year.

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Until a few years ago, the quality of bootlegged movies was poor because they were recorded by camcorders in movie theaters. But recent illegal copies offer excellent picture and sound quality, even matching the quality of DVDs. Most movie and music files now are over 4GB in size, and they circulate on the Internet with clean graphics and even 5.1 channel sound, just like DVDs.

The reason is the emergence of storage devices with larger capacity –

Internet users usually swap files though P2P websites, which are designed to allow computer users to exchange files. Individual PC users connect themselves to the same websites and exchange files –including illegal copies of movies and music. At the same time, a growing number of Internet users are turning to web hard drives. Internet users post files in their own storage space on the websites of certain companies and let others download the files by ‘sharing’.

Larger computer storage capacities are also one of the main reasons for the declining video business. From late 2003, even laptop computers were mostly equipped with 40GB hard drives, which after storing 1000 mp3 files and 10 movies, still could store as much. Recently, an ‘externally equipped’ HDD with 200GB capacity sells at about 100,000 won. With this device, users can store hundreds of movies.

Kim Jong-rae, head of online DVD shopping mall, PAPA, said that “people increasingly contribute to the sharing of files using ever-developing information technologies. That fuels illegal copying.”

Suk-Min Hong Sang-Hoon Kim smhong@donga.com sanhkim@donga.com