VENTURING INTOTHE GREAT BEYOND

Korea’s animation studios are now trying to make headway by fostering co-production deals with foreign partners, but doing so will not be easy. Asia Image finds out.

“The last year’s globaleconomic recessionmight not be the onlytough time for Korean animationindustry, but also a difficult timefor many other animation industriesespecially in developing countries,”Dongkyu Lee, assistance producer and interpreter for animation studioDR Movie, candidly says. For DR Movie, a studio which hasworked on titles such as Disney’s TVseries Stitch and Marvel TV seriesIron Man, the organisation wasnot spared from the fallout of theeconomic crisis as the studio sawits 2009 revenue figures pale incomparison to previous years. To stay afloat, many animationcompanies in Korea started to focuson acquiring business activitiesand new clients from overseas. Forinstance, Lee says DR Movie hasstarted to seek out internationalbusiness from Europe – somethingwhich the company hopes will bearfruit for the studio in the comingyears. The decline of OEM dealsOne reason for the need to ventureoverseas is partly due to the declinein the number of original equipmentmanufacturer (OEM) deals, whichtypically stem from countries suchas the United States. In the OEM,the animation is often drawnaccording to a storyboard provided by the client. In a Korean Industry 2007 report bythe Ministry of Culture and Tourism,OEM deals in Korea comprised of60% of the US$66 million earned inKorea’s stake in the global market. But Lee says the OEM deals havebeen waning in the last five yearsas investment companies andproduction studios are becomingmore cautious of whether theyinvest their money, as the successof the project is not longer aguarantee. Another reason for the shrinkingOEM deals can also be attributedto the high costs of animationproduction in Korea, said EugeneYu-sin Kang of Synergy Mediain a 2007 statement. As CEOof a company which delves inproduction, marketing, licensingand distribution of Koreananimations, Kang says Korea’s highproduction costs are why lowercostcounterparts such as Chinaand India are becoming increasinglyfavoured for outsourcing deals. Creating new opportunitiesInstead, DR Movie believes thatthe most important and crucialdriver for the Korean animationindustry is an influx of “vigorousinvestment activity”. Lee adds,“Namely, our industry needs morefunds from government, privateinvestors and hopefully majoroverseas’ companies from US andEU.” Hence, Lee says he sees a trendin the Korean animation industrywhere studios are focused on tyingup with international companies,such as those from Europe, Canada and the United States for coproductions. Synergy Media’s Kang adds thatfast-growing China market is also apotential avenue for new businessopportunities for animation studiosas well. But venturing overseas is notexpected to be easy for Koreananimation studios, says Lee. Oneof the biggest challenges facing studios is their lack of experience in partnering with overseas animation studios and broadcasters. Korean animation studios also willhave to grapple with the lack ofgood talent who have experience inco-partnerships as well. To overcome these hurdles, Lee saysKorean animation studios will haveto compensate by conducting betterresearch about global marketsand to learn about foreign trends,systems, distribution methods andtechnology changes. Nevertheless,the future for Korean animationstudios looking to venture overseaslooks optimistic. Already, Kang says Koreananimations have already beenproduced by major, well-knownforeign production and distributioncompanies. These animations arenow broadcasted on worldwidechannels and are even generatingprofits through licensing. “Korean animation has broken outof its concentration of East Asiaand hit the global scene, a goodsign of more things to come in thefuture.” ————————————————————- MAKING THE SWITCH Digital broadcasting services will fully replace analog in Korea by 2012, but is the country ready to make the switch? Asia Image finds out. By Lisa Cheong South Korea looks set topower ahead into full digitalbroadcasting by its stipulateddate of December 31, 2012. According to media reports,the country fi rst planned forthe switch to the US-designedATSC standard 8-VSB forterrestrial digital transmission(DTT) by the end of 2010. However, the date was laterpushed back the date by twoyears due to the poor take upof DTT services and lower-thanexpectedTV sales. While the switch to digitalbroadcasting will increase thepenetration rates of digital TVin the Korean market, not allconsumers would be likely tomake the switch even after2012. Latest figures by InformaTelecoms & Media releasedin early July 2010 foundthat digital TV penetrationonly comprised of a 44%penetration rate in South Korea- a sizeable increase from the14% penetration rate seen in2005. However, Informa Telecoms & Media estimates that thedigital penetration rate willlikely hit 83% by 2015. Thisis lower than Asia-Pacificcounterparts Singapore, Taiwan, Australia and New Zealandwhich will have a 100% digitalTV penetration rate by 2015. In a worry that digital televisionmay leave households withouttelevision broadcasts at all, in2009, the country’s convergedregulator for broadcasting andtelecommunications KoreaCommunications Commission(KCC) announced plans toprovide low-income familiesliving in regions where digitalbroadcasting would be testpilotedwith equipment fordigital reception using analogTVs. Consumers who do not wantto switch to digital televisionswill still be able to access freeterrestrial channels withoutchanging their television setsor subscribing to digital cableservices, reported The KoreaTimes last year. In the same report, Yoo Daeseon,who heads KCC’s digitalbroadcasting transition bureausaid that cable televisionoperators will be left to decidewhether they would want to stopproviding analog services as theKorean government would notinterfere in the decision. “However, analog cable willprevent viewers from accessinghigh-quality services such ashigh-definition (HD) images and interactive data services,’’ Yooadded. With an approximate 80%of the country’s 16 millionhouseholds subscribed topay-TV services, those whodid not want to pay for digitaltelevision or subscribe to cableor Internet protocol television(IPTV) could purchase digitalconvertors provided by thegovernment, which wouldallow them to keep their oldtelevisions. View from the broadcastingstation So in light of these changes,how have broadcasters beenaffected?Speaking with Asia Image,Joonsuek Park, producer ofprogramming and planning atKorea New Network (KNN) sayshis organisation has alreadybeen preparing for digitalbroadcasting sine 2004. Since then, KNN has alsolaunched its programmes in HDas well as equipped its stationwith a HD camera and digitalediting system as well. This move has benefited thestation as the cost of producingand broadcasting is cheapercompared to analog, says Park.With a new broadcastingstation being built and scheduled for completion by2010, Park says the broadcasteris in the midst of updating itsdigital equipment. Currently,the studio already utilises twoHD studios and has changedits programme formatting fromanalog to digital, as well asmaking the move from SD toHD. With 70% of KNN’sprogrammes in HD and 30% inSD, Park adds that the stationhas even started [broadcasting]its news in HD beginning fromlast year. Some of the purchased digitalequipment acquired by KNNinclude HD ENG cameras, HDNle Systems, HD studios, HDrecording and control room,HD editing room as well as HDIP transmission equipment forsending video and audio viainternet. Furthermore, Park addsthat the broadcaster is alsoplanning to acquire a new HDvan as well. With this switch, KNN hopesaudiences will benefit fromhigh-quality content that isbroadcasted with clear audioand video. Producers can also gain asthey can embed data andinformation in its content, thusmaking audiences happier, says Park.



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