Can Online Movie Release Service Be Successful?

Cho Ah-ra, a 32-year-old office worker, plans to watch the latest movies on her Internet-enabled 47-inch LCD TV from September after Korea's biggest movie studio agreed to provide its movies exclusively to the nation's biggest Internet portal.

But the success of the new model depends on their ability to persuade users to drop their habit of illegal downloads.

Under the agreement, CJ Entertainment ― which has about a 25-percent share as a movie distributor ― will offer its movies to NHN, the operator of Naver. The company's market share in the local Internet portal market is about 70 percent.

That means general consumers who have Internet-enabled TVs such as Cho can watch the latest high-definition (HD) Hollywood or local movies for 3,500 won ($2.75) a pop ― less than half the price of a regular movie ticket.

"IPTVs are getting higher momentum and the prices for flat-screen TVs are falling. The alliance is a win-win strategy for portals and movie studios," said Cho.