Talk about good timing: Vdio, the video subscription service launched by Skype co-founder Janus Friis, just added around 20 Korean TV shows to its catalog. The shows can be watched for free, in HD, without any ads, and with English subtitles. That move comes just days after news broke that Viki, a site that specializes in this kind of imported TV fare, has been acquired for $200 million.
Vdio’s move into the world of Korean dramas was announced via Vdio’s Twitter account Tuesday. The service is carrying full seasons of Korean shows like That Winter, The Wind Blows and History of the Salaryman as well as in-season episodes for a few currently-running shows, all of which are licensed from South Korea’s SBS. Fans of Korean TV fare might notice that some of these shows are available on Viki and its competitor Dramafever.com as well, which seems to be the point: Korean dramas aren’t as big as U.S. TV fare, but they have been attracting a growing niche audience.
The increased popularity of Korean dramas in the U.S. has a lot to do with companies like Viki, which have been striking cheap licensing deals for foreign TV fare, which is presented with sub-titles to viewers outside of Korea. The idea can be best described as content arbitrage — and it has been working so well that Japan’s internet giant Rakuten decided to spend $200 million on Viki.
However, the Vdio initiative also points towards a downside for content arbitrage: Non-exclusive, out-of-market deals can help to keep costs down, but also leave the door open for others to swoop in and steal away your customers. Vdio is clearly using the shows for customer acquisition, giving them away for free with the hope that some viewers may stick around and buy U.S. shows and movies as well.
Vdio is not yet a big threat to Viki and Dramafever (the video service operated by the team behind music subscription service Rdio only launched to the public in April, which has a limited device footprint), but the competition could heat up, especially if a giant like Amazon (S AMZN) or YouTube (s GOOG) decides to adopt the same model