Warner Bros. Make Up Your Mind: Are You Competing With Piracy Or Not?

from the mixed-messages dept

Fri, Nov 14th 2008 11:55am — Mike Masnick

It really was just last week that we were somewhat impressed that movie studio Warner Bros. recognized that it needed to compete with piracy in China, and was doing so by offering super cheap movie downloads there. However, apparently that strategy isn't universal across Warner Bros., because, as a few readers have alerted us, the studio is acting in quite a different way in neighboring Korea. Rather than compete, Warner Bros., is apparently throwing in the towel and pulling out of Korea entirely.

To be honest, I'm quite confused as to how the same company could make both of those decisions in the course of a single week. Perhaps the situations are really different between China and Korea (though, I doubt it), but it's difficult to see why it would make sense to try to compete against widespread piracy in one country, and then insist it was impossible to do the same thing in another country.

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Filed Under: china, dvds, korea, movies, piracy
Companies: warner bros.

18 Comments

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Lonnie E. Holder, 14 Nov 2008 @ 12:21pm

Warner's DVD Sales
I think this article speaks for itself.

http://newteevee.com/2008/09/03/the-death-of-the-korean-dvd-industry-a-sign-of-things-to- come-in-the-us/
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Anonymous Coward, 14 Nov 2008 @ 12:32pm

How can broadband penetration be over 100%?
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Anonymous Coward, 14 Nov 2008 @ 12:43pm

Re:
Broadband for pets!
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Lonnie E. Holder, 14 Nov 2008 @ 12:44pm

Re:
Well, it could be the same new math they use to prove how bad patents are. Or, perhaps many houses have two connections?
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Anonymous Coward, 14 Nov 2008 @ 12:45pm

100% penetration
I guess that means you have two broadband connections per household in some homes. Maybe a cell phone and standard ISP connection?
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PaulT (profile), 14 Nov 2008 @ 12:59pm

I've been on the wrong end of the idiotic regionalisation of content many times (we won't sell this in your country, but we'll also enforce region coding so you can't buy a legal copy elsewhere either!). Consumers have 2 choices - hack the region coding and buy or just pirate the thing. Why would anyone buy something that's deliberately set up to stop them using it? They won't, they've just gave them carte blanche to pirate with a "we're not allowed to buy it" defence. Even if Korea's copyright laws weren't so lax, this would be an acceptable defence if put forward correctly - how can you lose sales due to piracy if a person is prohibited to buy in the first place? Good job, retards.
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Mike (profile), 14 Nov 2008 @ 1:33pm

Re: Warner's DVD Sales
I think this article speaks for itself.

Saying what, exactly? That movie studios were too slow to figure out how to compete?

Again, that does nothing to answer the question in the post here.
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Jeffry Houser (profile), 14 Nov 2008 @ 1:46pm

[Quote]
"I'm quite confused as to how the same company could make both of those decisions in the course of a single week"
[End Quote]

It boggles my mind how this would confuse someone. You've never worked for a with a large company I take it? Or on a smaller scale, tried to pick out which color to paint your living room with a significant other.

The left hand never knows what the right hand is doing.
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Chris, 14 Nov 2008 @ 2:45pm

Size of customer base?
China - Population: 1,321,851,888 (July 2007 est.)
S.Korea - Population: 49,044,790 (July 2007 est.)
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Lonnie E. Holder, 14 Nov 2008 @ 2:53pm

Re: Re: Warner's DVD Sales
Mike:

All the Hollywood studios have now abandoned Korea as a lost cause. The article also speculated, which seemed a main theme of the article, whether this was the wave of the future for other countries, including the U.S.
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bob, 14 Nov 2008 @ 4:26pm

It is the size that matters
I think Chris has it correct.
It's the size.
1.3 billion quarters
is more than
49 million dollars.
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churchHatesTucker (profile), 14 Nov 2008 @ 6:18pm

Re: Re:
Well, Korea has pervasive broadband, while China doesn't. So, there's a market worth fighting for in China, despited the discounts.

Korea is your future, Hollywood. Prepare yourselves.
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cram, 15 Nov 2008 @ 7:47am

If fewer people are going to the movies, and no one wants to buy your overpriced DVDs since it's all there on the Net or in the streets and the cops won't do anything about it, why continue to bleed? Surely it makes more sense for movie studios to cut costs by leaving the scene, instead of trying to "compete with piracy"! And how does one "compete" with pirates when your chief scarce good is not so scarce after all? Maybe they should have tried selling DVDs at a buck each.
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Mike (profile), 15 Nov 2008 @ 3:20pm

Re:
If fewer people are going to the movies, and no one wants to buy your overpriced DVDs since it's all there on the Net or in the streets and the cops won't do anything about it, why continue to bleed? Surely it makes more sense for movie studios to cut costs by leaving the scene, instead of trying to "compete with piracy"!

Then why are they willing to do exactly that in China?

Did you even read the post?
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cram, 15 Nov 2008 @ 9:52pm

Did I read the post? Well, did you? It says broadband penetration is over 100% in Seoul and close to 100% all over the country, and downloading close to 50%. Is that the case in China? What's the extent of the piracy there? High no doubt, but as high as in Korea?

S. Korea used to be among the top markets for Hollywood movies. China is still a market that can be developed for Warner or other studios, because of the size and scale of the untapped market. Surely the great Mike Masnick should know that corporates will leave a region only when they lose all hope of being able to survive in it, cutting their losses while they can.
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Mike (profile), 17 Nov 2008 @ 3:25am

Re:
Did I read the post? Well, did you? It says broadband penetration is over 100% in Seoul and close to 100% all over the country, and downloading close to 50%. Is that the case in China? What's the extent of the piracy there? High no doubt, but as high as in Korea?

That's rather meaningless since Warner is offering cheap DOWNLOADS in China, not cheap DVDs. In that case, you'd think it would make EVEN MORE sense to do the same in Korea.
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Lonnie E. Holder, 17 Nov 2008 @ 6:49am

Re: The Question Is...
Mike:

I have read all these comments and the question, though not the answer, is obvious.

Why would Warner Brother pull out of Korea but remain in China?

We have to assume that any company will take actions that increase shareholder wealth, since to do otherwise risks executive management being relieved of their duties by the board of directors.

Warner Brothers decided that the costs of doing business in South Korea exceeded the benefits.

Warner Brothers decide that the cost of doing business in China was less than the benefits.

Okay, rather than speculating and laughing at the seeming foolishness of Warner Brothers, the last major Hollywood studio to pull out of South Korea, why not do some ciphering and come up with the actual business case for each country? Lacking the ability to come up with support for staying in or leaving either country, you are laughing at (or chiding?) a fairly routine business decision made by companies all the time.
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Dan Zee (profile), 19 Nov 2008 @ 12:02pm

Don't assume...
I wouldn't assume Warner Bros. knows what it's doing in relationship to Korea. Heads of companies make boneheaded decisions, and that's why eventually all Presidents and CEOs are booted out.

If 50% of the population is downloading movies off the Internet, then 50% of the population is not doing that and that would be your market. 50% is better than pulling out totally.

I've always believed that the actual movie shouldn't be the product the studio sells, since the movie will soon be free on cable tv until the end of time. The studios should sell a value-added product with the DVD like a gift card, or a collectible poster, or a figurine. Something cool. George Lucas, for instance, made more money from collectibles than he ever did from the actual Star Wars movie grosses.

Hollywood needs to be more aggressive with their retail sales rather than slapping out a disk, shoving it in a plastic sleeve and shipping it to stores. They need to offer something "cool" with their movies!
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