Filmart: How South Korea's Missile Defense System Has Halted Dealmaking
Says one executive: “The buyers from China don’t say they’ve received an official order or anything like that to stop them from buying Korean titles, but they deliver a clear vibe that we can sense."
Entertainment companies have been caught in the crossfire of China and South Korea’s escalating political tensions, buyers and sellers at Hong Kong Filmart say.
Over the past decade, South Korean content has become one of the most popular — and lucrative — categories of foreign entertainment in the booming Chinese market.
But after Seoul pushed ahead with a recent decision to install a U.S.-made missile defense system — known as THAAD (Terminal High-Altitude Areas Defense) — on the Korean peninsula, Beijing authorities retaliated by discretely signaling to local media companies that they should stop buying and broadcasting all South Korean content.
South Korea has maintained that the missile system is a necessary step to maintain its national security in light of recent rocket tests and provocations from North Korea. But Beijing views THAAD as an escalation of the U.S. military presence in China’s immediate orbit.
“At the last Filmart we sold all of our titles to China, and there was always competition [between Chinese companies bidding on our films]," says Jason Chae, president of South Korean film company Mirovision. “But this year the Chinese buyers only want us to share titles updates with them.”
“We did a big deal with China for TV drama The King in Love last year, which is now in preproduction,” adds Lee Hyo-young, CEO of Korena TV sales agent Young & Contents. “But since the THAAD problem, things got cold very rapidly. Sales almost stopped. It’s a rare case in the world and a very unfortunate situation. I hope it gets resolved as soon as possible.”
“We can’t buy anything from Korea right now because we’re not permitted to broadcast it,” explains a buyer from one of China’s top internet video companies. “It’s unfortunate, because Korea content performs very well for us. This year, we’re just holding some meetings with Korean companies to maintain relationships.”
Last Friday, South Korean President Park Geun-hye was formally impeached, ending a months-long political scandal that took the nation by storm. An election to choose Park’s successor must be held within 60 days, and most observers believe the Korean opposition party — which holds a less hawkish view of the North — will win power.
Entertainment companies on both side of the border say they are holding out hope for a thaw in relations. “The buyers from China don’t say they’ve received an official order or anything like that to stop them from buying Korean titles, but they deliver a clear vibe that we can sense,” says Chae. “There is political change in Korea right now, though, so we’ll have to wait and see how things go over the next few months.”