Published:
13-Dec-06
Twentieth Century-Fox Home Entertainment (TCFHE) has established a subsidiary office in China and agreed an exclusive distribution deal with Chinese video distributor Zoke Culture Group. Zoke will distribute around 100 legitimate new-release and catalogue DVD and Video CD (VCD) titles from TCFHE in 2007. In an effort to combat the country's rampant video piracy, TCFHE and Zoke intend to employ a shorter release window between cinema and video than that used in the US and other mature markets. The companies also plan to adopt a low price point for DVD, with discs retailing for between 20 yuan ($2.50) and 30 yuan ($3.75).
In contrast, TCFHE has announced plans to close its subsidiary office in South Korea. Local reports indicate TCFHE will license local distributor Bitwin to handle its video product distribution. The restructure of its distribution activities mirrors the moves by Universal and Paramount to close their subsidiary offices in South Korea in April 2006 and June 2006 respectively.
Our take...
The timely supply of authentic and affordable discs by TCFHE in China is aimed at providing consumers with a better alternative to pirated discs at a more competitive price and before the pirated version enters the market. The move mimics similar strategies to those undertaken by Warner Home Video (WHV) in 2005. WHV began selling heavily discounted discs in China in February 2005 but the strategy failed to stimulate sales as much as the studio had hoped . WHV sold DVD discs for between 22 yuan ($2.65) and 28 yuan ($3.40), whilst VCD discs cost consumers 16 yuan ($1.95). Furthermore, WHV implemented a same-day release strategy for the release of The Sisterhood of the Travelling Pants on DVD in July 2005. Same-day release windows are under increasing pressure from advances in digital technology. Pirates are utilising the Internet to transport digital copies of a movie illegally within hours of a film's worldwide premiere. The Motion Picture Association (MPA) estimates that 93 per cent of China's potential market was lost to piracy in 2005 compared with seven per cent in South Korea.
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