[HanCinema's News] COVID-19 Massively Empowers South Korean OTT Market

The year 2020 saw a massive crash in the South Korean box office due to COVID-19. An industry that had over two hundred million collective theatrical admissions a year in 2019 contracted over 70% of that in 2020. Figures since then have been similarly bleak. With attendance at the South Korean box office now at its lowest point since the Korean Film Council started taking reliable figures of the market.

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But the demand has not simply disappeared into the ether. Where the South Korea over the top streaming industry was a 90 million dolar industry in 2012, it is now an 800 million dollar industry in 2021. Whereas last year the typical South Korean consumer only subscribed to an average of 1.3 streaming platforms that figure is now up to 2.3. The arrival of Disney+ and HBO Max and Amazon Prime into the South Korean market has spurred much of this growth.

This is even as existing platforms in the South Korean market such as Netflix, TVING, wavve and Watcha still have the strongest positions and are working aggressively to defend them. The fortunes of these firms appear to be going hand-in-hand with the departure of big event features. "Escape from Mogadishu" let the box office last year with 3.6 million admissions in an industry where an especially popular film was often expected to get as many as 10 million.

The change in the market has put major film producers such as CJ Entertainment, Lotte Entertainment, Showbox, and NEW in a bind. Not only do big stars no longer seem likely to be a draw for films, many have successfully been lured way to exclusive streaming projects. Original ideas also increasingly seem to be of less importance, as synergy with existing brands is proving to be a far more lucrative strategy for companies large enough to have access to intellectual property in multiple sectors.

With the COVID-19 pandemic recently in its worst-ever phase in South Korea, the film market seems increasingly unlikely to revert to its pre-pandemic state. Movie theaters across South Korea have long had to close down due to these decreased fortunes. But for consumers, the ultimate difference may be negligible, as they simply watch entertainment that interests them at home instead.

Written by William Schwartz