Netflix's 'Okja' Hits More Big-Screen Obstacles After Cannes

Netflix Okja Big Screen - Photo-Illustration - Publicity - H 2017
Courtesy of Nagy Andris/Netflix

After taking flak at the festival for eschewing exhibitors, the streamer's plans for major theatrical runs in South? Korea, and possibly even China, appear to be in trouble.

From Cannes to Seoul to Silicon Valley, Netflix is known for sparking controversy with exhibitors and cinema purists over the existential threat its online service may pose to movie theaters. But in China, the streaming giant perhaps wants nothing more than a traditional theatrical release for its latest pricey original.

Netflix's much anticipated sci-fi drama Okja, directed by South Korean filmmaker Bong Joon-ho and starring Tilda Swinton and Jake Gyllenhaal, received warm reviews after its premiere in Cannes last month, and it is set to go live on Netflix worldwide on June 28, the same day it was supposed to be getting a theatrical release in South Korea by leading local distributor Next Entertainment World.

Given the strength of the Korean theatrical sector and Bong's star status in the country — his previous film, 2014's Snowpiercer, earned $60 million in South Korea — going big-screen in the country would seem an uncharacteristic but natural way for Netflix to recoup Okja's $50 million budget. But such plans now appear in jeopardy. In recent weeks, buzz in Korean film circles has it that CJ CGV, which accounts for 40 percent to 50 percent of all film admissions in South Korea, is considering boycotting the movie to protest the lack of an exclusive theatrical window. Insiders suspect other exhibitors, like the country's second largest, Lotte, might follow.

Typically, a major Korean movie would look for help from the massive nearby China market, where Snowpiercer, for example, earned $11 million — its biggest overseas performance by far. And since the Chinese government has rebuffed Netflix's various attempts to launch in the country, a theatrical release, ironically, would seem Netflix's best means of earning any real money from Okja in the world's most populous nation.

Beijing-based streaming video service iQiyi — with which Netflix inked a limited digital distribution agreement in March and whose general manager of film acquisitions recently was spotted meeting with Netflix in L.A. — would be a ready partner. But online licensing deals are generally much less lucrative for foreign films in China.

"In principle, it's unlikely that a licensing deal would match what a movie like Okja could conceivably make from theatrical, but it all depends on the terms," says Vivek Couto, executive director of Media Partners Asia.

Buyers from several leading Chinese distributors told THR in Cannes that they were very interested in exploring the possibility of releasing Okja on the big screen in China. Sources in communication with Netflix leadership at Cannes also said the company was indeed entertaining moving in the somewhat surprising strategic direction of theatrical for China — but a glaring issue of concern loomed over such ambitions: geopolitics.

Since last year, China has maintained a de facto ban on the import of almost all Korean entertainment content  — a response to Seoul's decision to install a U.S.-made missile defense system, known as Terminal High Altitude Area Defense (THAAD), on the Korean peninsula last July. South Korea argues that the system is necessary to its national security given the nuclear threat from North Korea, while Beijing views it as an encroachment on China's regional sovereignty.

Securing a theatrical release for Okja in China in the current climate would require all of the usual censorship and distribution approvals — normally, not difficult with the right local partner — plus special high-level consideration from China's media regulator, the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), because of the ongoing backdrop of geopolitical strife.

The consensus among the Chinese execs contacted by THR is that Okja's Chinese release prospects are challenging, but not impossible, thanks to Bong's international reputation and the fact that the movie was backed by U.S. companies (Brad Pitt's Plan B Entertainment is a co-producer) rather than a Korean one. If Netflix calls, each said they are ready to try, given the rich potential upside for all involved.

"Korean content has a very strong following in China; there is tremendous pent-up demand for whenever [the Chinese government] decides to begin letting it back in," says Kuoto. "When that will be, we don't know — it will depend on how these ongoing military and political tensions between China, Korea and the U.S. unfold."

This story first appeared in the June 7 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.