Declining Popularity
The web hard industry, which was once considered the best content distribution channel that allowed free trade and downloading of movies, music and TV programs, is falling into decline. This is largely due to the fact that more and more users are avoiding the way of downloading for their content consumption as well as the government’s stricter regulations on illegal content circulation.
According to the data from the Ministry of Science, ICT and Future Planning on Feb. 23, the number of web hard service providers in Korea dropped by a third from 150 in 2012 to 55 as of Feb. this year. The number of their online web hard sites also significantly decreased from 211 to 57 during the same period. In particular, two web hard service companies and 15 sites closed down businesses between Dec. last year and Feb. this year alone. The surviving companies are becoming smaller and smaller.
Starting from Apr. last year, web hard service providers are obligated to adopt technological measures, which cost 2 million to 3 million won (US$1,622 to 2,434), to block searching, uploading and downloading of illegal and obscene materials, including movies, TV series and music that infringe the copyright. However, some companies went out of business since they couldn’t afford the money.
Until 2010, web hard was a rich repository of illegal content, such as movies, which had not released, and TV dramas, which just aired 10 minutes ago. It was also a distribution channel of pornography to such an extent that a person surnamed Kim, who uploaded 14,000 obscene materials and was arrested in 2006, actively involved in activity. The government has introduced the registration system, which enables only registered business operators to provide web hard services, from May 2012, legalizing web hard services.
One of factors behind the decline of the web hard industry is the increase in prices due to service legalization. Users visit web hard websites in order to enjoy illegal content for free or at unreasonably low prices. However, prices surged after the implementation of the registration system. Web hard websites, which established an alliance with content producers, charged 1,000 won to 4,000 won (US$0.81 to 3.25) for service. Accordingly, the number of pirated articles distributed through web hard online sites rapidly dropped to 333.94 million in 2014 from 731.53 million in 2011 when the registration system was about to be adopted.
The root cause is that the method of content consumption has changed from downloading files to streaming, which allows consumers to enjoy content with mobile devices, including personal computers and smartphones through the networks. The file size of a 2 hour movie is 1.2 1.2 gigabyte (GB), and consumers had to watch it with wired internet with network transmission speeds of 100 Mbps in the past. However, the speed of mobile communication system based on LTE exceeds 100 Mbps now. In addition, the N-Screen technology, which enables consumers to watch same movies aired on TVs with smartphones, reduces the need of file downloading.
Web hard service providers are seeking to make a breakthrough for survival, such as widening the range of partnerships with content producers, but their business permanency has been continuously questioned. An official from the industry said, “Web hard services, which once flourished, are on the decline due to advances in the IT sector.”