The Korean sector film looks abroad
EmptySEOUL -- With South Korea's boxoffice down 5.5% in 2007 and another 9.4% so far in 2008, these are depressing times for Korean movie production houses. Layoffs are hitting all parts of the industry, and many companies are getting out of movie production altogether.
Mediaplex is shutting down its production division Motion 101, iHQ is returning to its core business of talent management, and Dyne Film is looking into options outside of filmmaking.
Korea's film industry has grown dramatically over the past 10 years -- from $207 million in 1996 to $1 billion last year -- but that growth has come at the cost of nearly constant upheaval. New production, distribution and sales companies have come and gone with chaotic regularity. CJ Entertainment, founded in 1996, is already one of the oldest. And CJ, while investing in many movies, has produced very few films of its own.
Cinema Service, once CJ Entertainment's biggest rival and now partly owned by CJ, is now a shadow of the size it was around the turn of the millennium. Mediaplex, the biggest player since Cinema Service declined, sold off its multiplex division to a consortium of investors led by Australian banking group Macquarie and closed Motion 101 at the end of April. MK Pictures, which was founded in 2004 by the filmmakers responsible for some of the most successful films in Korean history (1999's "Shiri," 2000's "JSA" and 2004's "Taegukgi"), closed its international sales office last year and eliminated most of its once-ambitious plans for diversification and expansion. Last summer, it was bought by cable network operator Gangwon Television Broadcasting. And the examples go on.
The crux of the problem, according to many industry observers, is too many movies. From 1995 to 2005, the number of productions was fairly stable, averaging 61.7 per year, but the average cost of a film soared from $1 million to $4.3 million (including P&A). Over the past couple of years, producers have put the brakes on rising costs, which fell to $3.8 million in 2007. In response, filmmakers produced 102 films in 2006. In 2007, that climbed again to 112.
The jump in new titles also came in part from new sources of funding, in particular the telecoms and stock markets, which bypassed the old financing routes. Production companies that went public in particular needed regular revenues to keep their shareholders happy, so they ramped up production.
As tough as times are for many Korean producers, the local industry still has its strengths. Last year was the worst showing for local films since 2003, but Korean-made films still accounted for more than 50% of the boxoffice. And overall attendance in 2007 was the second highest ever.
Many high-profile films are coming up in the second half of 2008, including Kim Ji-woon's eastern Western "The Good, the Bad, and the Weird," Kim Yu-jin's historical epic "The Divine Weapon" and Park Chan-wook's psychological thriller about vampires, "Thirst." As in most years, Korean distributors are staying away from May and June, when Hollywood's biggest blockbusters hit the market.
In the meantime, with the local market appearing saturated, at least for the time being, many companies are turning their attentions abroad in the search for growth. Unlike past years, when the focus was on preselling Korean titles abroad, Korean producers now have a greater interest in working more closely with their international partners. Mediaplex is one of the major investors in John Woo's "Red Cliff"; CJ Entertainment invested in Kirsten Sheridan's "August Rush";
Taewon Entertainment invested in "Three Kingdoms: Resurrection of the Dragon"; and BOM Films invested in Peter Chan's "Warlords."
"You need to find ways to sustain your company globally," says Christopher Chang, head of media and contents at Mediaplex. "But the benefit needs to be on both sides. It only works if both companies understand their projects."