Pinterest
NewsLetter DailyWeekly
 
My HanCinema | Sign up, Why ? Your E-mail   Password    Auto| Help
HanCinema :: The Korean Movie and Drama Database, discover the South Korean cinema and drama diversity Contact HanCinema HanCinema on TwitterFaceBook HanCinema PageHanCinema on Twitter

Korean movie industry at a crossroads

2007/03/07 Source

Shrinking exports, rising costs and unstable profits put the brake on heady expansion across Asia

This is the first in an eight-part series of articles that looks into the country's cultural and entertainment sectors and explores ways to help sharpen their competitive edge. - Ed.

By Yang Sung-jin

The Korean movie industry has generated some dramatic momentum in recent years: home-grown blockbusters have broken box-office records; select high-quality films have won international film festival awards; and the combined share of Korean films hit 60 percent in the domestic market, outsmarting Hollywood rivals.

But the thriving film sector is not in a festive mood; hurt by a host of ominous signs. Reflecting the negative atmosphere, the number of new film projects is plunging. The reduced screen quota for local films is also dampening investor sentiment. The average production cost is soaring, forcing film studios and investors to rethink their expansion strategy.

All of these unsettling developments imply that Korean filmmakers confront a make-or-break turning point. If they deal with the current problems wisely, the Korean film market will move toward the much-coveted advanced stage; if not, local filmmakers will end up struggling with a protracted downturn, analysts say. In terms of quantity, the domestic film market hit a peak last year when a record 110 movies were made, surpassing the 100 mark for the first time. The exponential growth was powered by the elevated stature of Korean movies on the international stage, but these exports are also showing signs of fatigue. Local media energetically praised the growth of exports of Korean films to Japan (the key destination of so-called "Korean Wave" products), and other Asian countries in recent years. But the export front suffered a serious setback last year, with the value of exports plummeting 68 percent to $24.5 million.

"The primary reason for the overall export slowdown in 2006 was the steep decline of export to the Japanese market", said Tae Eun-jeong, an official at the overseas film promotion team at the Korean Film Council. "Between 2004 and 2005, Korea exported many films to Japan and the average export price was also raised dramatically. But the mood changed equally dramatically in 2006".

The value of the Korean films screened in Japan declined to $10.3 million in 2006, down 83 percent from $60.3 million in 2005. The impressive growth period between 2004 and 2005 was sparked by the strong popularity of Korean Wave actors, including Bae Yong-joon, in Japan. Japanese film distributors also competed to snap up more Korean films, sensing a huge opportunity to tap into the new Japanese fan base.

"At the height of the Korean movie boom in Japan, some Korean films fetched $4 million apiece, which was clearly overpriced", Tae said.

Despite the steep price tag, the result was far from impressive. A series of much-hyped Korean films flopped in Japan, dealing a blow to Japanese distributors and import intermediaries.

The underlying fact was that some Korean films were overpriced when they were exported to Japan, reflecting the frothy Korean Wave premium. The outlook for export to Japan remains bleak this year. "Both Korean and Japanese sides now remain highly cautious, waiting for each other to make a decision on prices first", Tae said.

"Entering foreign markets successfully is very important", said Choi Byung-goo, director of the Film & Video Industry Team at the Ministry of Culture and Tourism. "The government is now channeling more resources to the export front, recognizing its importance for the entire industry".

Choi said Korean films are now attracting keen interest even in the United States, the world's biggest film market. "When "The Host" was screened in Los Angeles, local moviegoers expressed great interest in the film, and Asian movies are steadily expanding their influence there", he said.

The Culture Ministry reaffirmed its commitment to the film industry early this year, pledging to offer more support in terms of joint marketing for Korean movies overseas and streamlining export channels.

The government is keen to allay concerns of local filmmakers, especially after it made a key concession - a reduced screen quota - to the United States last year to accelerate the free trade agreement.

It agreed to halve the screen quota days from 146 days to 73 days, which went into effect in July 2006 despite strong opposition from local filmmakers. According to a survey by Research Plus, 65.2 percent of local filmmakers believe that the reduced screen quota will have a negative impact on the domestic film industry.

But the real impact is expected to be felt in 2009 at the earliest, as it takes usually two to three years to plan, produce and release a single film in Korea.

Kim Mee-hyun, director of the Policy Research & Development Team at the Korean Film Council, said a bigger issue facing the Korean film industry is bolstering profitability. "Industry-wise, the local market expanded rapidly after a couple of blockbusters boosted the sentiment in 2004", Kim said. "Investment snowballed following the huge success of blockbusters such as 'Silmido' and 'Taegukgi', and production companies also rushed to list on the stock market, taking advantage of the sudden boom", she said.

The much-awaited expansion resulted in a slew of production houses and distributors with plenty of cash for new investment. They needed bigger projects to turn a profit, and as the competition heated up, far more films than the market could handle were produced, which in turn undercut their box-office profitability.

"The quantitative expansion did not lead to an improved profitability, and the number of films which broke even also went down", Kim said. Before 2005, about 35 percent of Korean films broke even or turned a profit, but the ratio slid to 20 percent last year, reflecting the negative turn of events.

In the United States, about 20 percent of films produced achieve a break-even point. But American films have a solid post-release source of revenues including DVD sales and exports. Given that Korean films do not have such strong post-release market, the portion of projects breaking even should be restored to around 35 percent, Kim said.

Soaring production costs are another major concern troubling local filmmakers. The average production cost has steadily risen in recent years, hitting 4 billion won ($4.21 million) in 2006. "Including marketing expenses, the real production cost is about 5 billion won, which means a single project should sell at least 1.6 million tickets to turn a profit", Kim said.

Although the number of moviegoers has been increasing at about 15 percent since 2000, the local film industry is yet to achieve a real growth indicative of a mature market. "The next couple of years will be critical for the Korean film industry. All eyes will be on whether it can handle key issues such as rising costs and declining exports", Kim said.

Source : www.koreaherald.co.kr...

Copy & paste guideline for this article
Always put a link back to the source and HanCinema permalink

Creative Commons License"Korean movie industry at a crossroads"
by HanCinema is licensed under a Creative Commons Attribution-Share Alike 3.0 Unported License.
Based on a work from this source

Attention You're reading the news with potential spoilers, make them spoiler free, dismiss


 

 

 Previous news
  • Cult Director Jodorowsky Likes Korean Films
    2007/03/07 (Source)
    By Kim Tae-jong
    Staff Reporter

    Surreal bizarreness, bloody violence and bold eroticism are some words invariably associated with director Alejandro Jodorowsky.

    But the best way to understand him is to see his works. That had been almost impossible till now, as his works have long been unavail,...
    More

  • BONG joins Gondry and Carax for Tokyo Project
    2007/03/06 (Source)
    According to the Hollywood Reporter, "The Host" director BONG Joon-ho will participate in an omnibus,...More

  • Record Number Entries for JIFF
    2007/03/06 (Source)
    Korea's major independent film festival Jeonju International Film Festival announced that a record breaking number of 1,035 films applied for this year's eighth edition. It's an increase of 17% from last year when 888 films applied.

    Among the entries are 661 Korean films and 374 International fil,...
    More

Subscribe to HanCinema Pure to remove ads from the website (not for episode and movie videos) for US$0.99 monthly or US$7.99 yearly (you can cancel anytime). The first step is to be a member, please click here : Sign up, then a subscribe button will show up.

Settings

Remove ads

Sign up

Sharing

Activate

Spoilers

Visible, hide

Learn to read Korean in 90 minutes or less using visual associations