South Korea's interactive imagination

Forward-thinking film sector embracing brave new world

Related: Korean cinema's school spirit

SEOUL -- For the release of "Sleeping Beauty," a low-budget independent film by young female director Lee Han-nah, Kino-eye, a Korean distributor of digital films, came up with two marketing plans that would guarantee local audiences' attention. One, they promoted Lee as "the female Kim Ki-duk," director of controversial films such as"The Isle" and "Spring, Summer, Fall, Winter and Spring," whose radical take on sex and human nature often spark gossip in the local media.

But more importantly, during the weeks leading to the movie's release in early October, Kino-Eye held a free online premiere of the film on Wedisk, a local movie-download site visited by more than 10,000 users a day. Kino-eye removed the digital protection from the file and supplied a free "limited edition" of the movie for 1,500 visitors a day. During six days of opromotion, more than 9,000 people viewed the film.

The company eventually released "Beauty" online and in six art house theaters on the same day, attracting about 1,000 moviegoers and 10,000 Web surfers who paid to download the file. The number suggested a rare success for a South Korean indie film that would normally attract fewer than 1,000 ticket buyers.

"You've got to explore new ways to market a low-budget film because at the end of the day there is no way for a starting distributor like us to rely on theater revenues alone," says Kino-eye director Kim Myoung-Eun, who describes the company's film slate as "B-rated genre movies." "It's only fair for the audiences. How many people in rural areas could afford to travel two or three hours on the train to see a movie? The accessibility is still a big issue for independent films."

Pretty clear thinking for a country like South Korea, one of the world's most wired nations on Earth. A survey by the Korean Film Council showed that Koreans download an average of 54 movies a year from file-sharing sites, many of which are unlicensed.

Internet dependency always has been high here -- especially in the entertainment sector -- and it'll continue to be that way with more movie studios joining online services and digital distributors to meet the needs of local audiences.

But other factors are pushing local producers to find alternative means of distribution.

The monopoly of screening space by major distributers is one reason. Since the huge success of "The Host" in 2006, insiders complain that polarization in the Korean film market has become more serious than ever before.

Theater owners blame the current system on low ticket prices compared with rising market costs, which they claim forces them to rely on profits from distributors securing "certified films" that are commercially safe.

Additionally, many agree that the real problem facing Korean film today is the dearth of quality product to stimulate the market.

The situation has become so grave that Kang Han-sup, chairman of the Korean Film Council, noted in a strong tone during a seminar at last year's Pusan International Film Festival that Korean cinema is in "a state of great depression that's different from a temporary or seasonal crisis."

Recent boxoffice numbers support Kang's urgency. CGV, the nation's largest multiplex chain, showed that the country's cinemas command only 42.5% of the moviegoing market, down from 64.4% in 2006, and its smallest share since 2001.

The business loss because of illegal downloads became even clearer in December when Warner Home Video, the last of the major Hollywood studios in the DVD and video market here, pulled out of Korea in December to focus on digital distribution.

Critics are concerned that the Korean government is neglecting the ongoing threat of online film piracy to nurture the area of new- media services and the IT sector.

Indeed, much of the discussion in recent months at government-sponsored forums on new business models for the Korean film industry has been focused on the prospects of IPTV, or a convergence service that combines the functions of TV and the Internet.

Since Korea Telecom, the state-run Internet broadband service, set up its first IPTV station in November, two other competitors -- LG Dacom and SK Broadband -- have launched their own platforms. The Korean government recently said it would invest more than 12 billion won ($7 million) over the next five years into stabilizing IPTV operations here.

"(IPTV) certainly (will) replace the next ancillary market of DVD and home video," says Kim Jin-ha, an official at SK Broadband's new-media project team.

Already, SK has signed contracts with seven major Hollywood studios and domestic distributors, including Warner Bros. and CJ Entertainment.

The company has secured up to 85,000 films and TV dramas to serve the 4 million Koreans with broadband Internet access.

Last month, SK screened "The Dark Knight" viaVOD before the film's worldwide DVD release. And as a test of interactive function, SK held a drawing at the end of the film in which the audience used its remote controls to score points. The selected winners were given a prize.

Producers and directors are successfully testing the waters, as well.

Sidus FNH, a local producer, recently released four digital films shot exclusively for screening in IPTV. One of them -- "Story of Wine" -- was made into an omnibus film of three shorts. Again, using remote controls, the audience interacted, choosing the order in which the films screened.

Elsewhere, a TV commercial for Oz, a wireless Internet service from LG Telecom, recently was made into a short film and screened in a single theater. The 15- second commercial originally showed male office workers trying to flatter their female boss by finding out her birthday through the wireless Internet.

A month after the spot ran, more than 3 million viewers had watched the commercial online. The number eventually exceeded 10 million, including viewers on the user-created content sites so popular in Korea. LG eventually hired a screenwriter to extend the advertisement into a 15-minute film.

"We had a lot of comments from audiences that this would make a great sitcom," says Kim Dae-young, an official at LG's brand communication. "For us, it was a great chance to promote our brand and use one source for multi-use."

In addition to its deal with SK, Warner Bros. Digital Distribution has struck a deal with TU Media, a provider of satellite digital multimedia broadcasting services, to distribute Warners' latest releases through mobile, video and audio channels.

This year, Kino-eye is releasing a film trilogy online about Norway. The company's's Kim believes a new system that reflects the strength of digital distribution could be reconstructed to suit the changing digital environment in Korea without breaching copyright laws.

He adds that the company is modeling itself after Lionsgate because of the savvy way in which the mini-major walks a fine line between indie fare and commercial crowd-pleasers.

"I believe every film should find a way of promotion and distribution that best matches its style and budget," Kim says. "It's nonsense that all films should follow the method of Hollywood films."

Meanwhile, Vantage Holdings, a major investor behind the 2008 Korean sleeper "The Chaser," ran a paid VOD service in June a week before the film's DVD release. In two days, there were 15,000 downloads.