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‘Film Quota Cut Poses Long-Term Risk’

2006/01/26 | Permalink | Source

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By Kim Ki-tae
Staff Reporter

Although the planned reduction of the government quota protecting local movies is unlikely to have an immediate impact on the booming Korean film industry, it could in the long term weaken the industry, according to experts.

"At present, Korean films account for more than half of the nation's domestic film market, which means they don't need the screen quota system at least for a while", said Choi Bong-hyun, a research fellow at Korea Institute for Industrial Economics and Trade (KIET).

However, Choi said the reduction could have serious psychological impact rather than immediate economic implication on the nation's film industry. "The psychological repercussions could discourage investment in the sector", he added.

The Ministry of Finance and Economy announced yesterday that the current screen quota system, which requires local theaters to show Korean films for at least 146 days a year, will be reduced to 73 days in July.

Lee Hae-young, international relations professor of Hanshin University, also agreed on the negative long-term effect of the reduction. "Today's announcement won't affect tomorrow's film market, especially when Korean films are cruising in the domestic market. However, the withdrawal of the market protection policy would severely encroach on the foundation of the film industry", Lee said.

Regarding the economic impact of the quota reduction, there have been few reports produced so far. Out of them, a report by a civic group Coalition for Cultural Diversity in Moving Images in 2003 assessed that the 10-day reduction of the quota will lead to around 308 billion won ($300 million) in losses to the domestic film industry.

The group also said that the screen quota system has helped stabilize the capital flow to the nation's film industry since the mid-1990s by guaranteeing a certain level of market demands.

Lee said the losses could be bigger now than the estimate, due to the film industry's growth in the last three years. "The film market is estimated to be around 5 trillion won, larger than 4.4 trillion won three years ago", he said.

However, another report gave a contrary account regarding the impact of the quota's reduction. According to a report by KIET in 2003, the reduction or lifting of the screen quota would not have any major impact to the film industry. "Korean filmmakers demanded a screen quota system for their survival, but the recent boom of Korean films have little to do with this system", its researcher Oh Jong-il said.

"Korean films' competitiveness stems from the entry of chaebol (Korean conglomerates) into the industry and the introduction of multiplex theaters since the mid-1990s, not from the screen quota", Oh claimed.

Korea is one of the few nations maintaining the film market protection measures while many other nations have succumbed to pressure from the United States or do not have a meaningful share in their domestic film markets. Currently, around 10 nations, including France and Italy, are implementing the protection system.

Japan does not have a quota for its own films, but its theaters voluntarily allot around 40 percent of their screen time to Japanese films.

Korean films have constantly increased market share since the mid-1990s. That share exceeded 40 percent in 2001 and jumped to over 50 percent in 2004.

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