South Korean film industry reeling from sluggish sales in Japan

Posted on : 2006-07-21 13:56 KST Modified on : 2019-10-19 20:29 KST
Current foreign market dominated by Japan; efforts made to branch out

"No more Korean movies!" These half-teasing words, shouted by a Japanese film investor during the Cannes Film Festival this year, illustrates in a way the current status of the Korean movies in Japan. The Japanese film market, which had long acted as a hot source of revenue for Korean movies, has cooled down rapidly this year.

Last year, Korean movies enjoyed fierce bidding competitions among Japanese distributors and were sold to Japan with a red-carpet treat, normally at a minimum premium of several million dollars. So, this year’s sudden turnabout is seen by some as a surprise and is perceived as a worrisome signal.

For a while, Korean movies looked like solid gold in Japan. Last year at Cannes was the industry’s peak. Korean films were sold at record prices to Japanese buyers. For example, "April Snow" earned 7 million USD, "Duelist" 5 million, "The Host" 4.7 million, "Running Wild" 4 million and "APT" 2 million. Besides Cannes, last year also saw the sale of "Almost Love" at 5.2 million, "Now and Forever" and "Typhoon" both at 3.5 million, "A Bittersweet Life" at 3.2 million and "Welcome to Dongmakgol" at 2 million. All in all, last year’s South Korean movie sales to Japan tallied 60 million USD, a 49 percent increase from the previous year.

Given that the 2004 sales figure of 40 million dollars was also a whopping 191 percent increase from the 2003 figure, the total Korean movie export to Japan for these two years increased more than threefold. This dramatic upsurge in revenue is partly credited to the popularity of the so-called "Korean Wave" movie stars.

However, the revenue chart for this year is showing a very different picture. According to the Korean Film Promotion Committee, the total earnings Korean films gathered during the first half of this year didn’t even reach 20 million USD, even if we factor into expected sales from soon-to-be-released films. In this year’s tally so far, the Japanese market has taken 60 percent of overseas sales, or 12 million USD. On the other hand, during the same first-half period last year, total overseas sales of Korean films stood at 42 million USD, with Japan accounting for 31 million, or 80 percent.

Compared to last year, the total foreign sales this year have decreased by half, and exports to Japan went down even further. Overall, the slump of the Korean films’ overseas sales during the first six months of this year is directly attributable to the decrease in sales in the Japanese market.

The chilling turnaround of the Japanese market for the Korean movies was clearly seen during this year’s Cannes, where many newly released movies were traded around the world. Except for "Once in a Summer," with big Asian star Lee Byong-hyun, Korean movie sales to Japan were quite minimal. Lee Kyung-jin, an overseas sales manager of the Show Box Co. said that "there just weren’t many foreign buyers who visited the Korean movie booth." Son Min-kyung of the Show East Co. adds, "What greatly differs this year is that foreign buyers say that they want to see the movies first and talk from there." Ji Sang-eun from the Cine Click Asia Co. laments the situation: "Last year, we were even approached by buyers who showed interest if we simply mentioned to them who’s in the film or showed them a scenario or just a synopsis."

The primary reason behind the Japanese buyers’ cooled reaction is that Korean movies did not hand them the box-office bonanza that they expected after they had purchased the Koreans films at such high prices last year. Among the ones that went to movie theaters in Japan last year, only two, "Eraser in My Head" and "April Snow," were moderate successes. The rest of them met crushing defeat in ticket sales.

The ensuing record of Korean film failures since then includes, "Running Wild," "Typhoon," "Now and Forever," "Duelist," "Rikidozan," and "Daisy." Understandably, the Japanese buyers who imported the Korean films are not happy. In addition, there are Korean movies they purchased that are yet to be released in the Japanese movie theaters later this year and how they will do in the box office is uncertain. It is no wonder, then, that they are taking a much more measured approach in buying current Korean cinema.

But it is too early to conclude that the heyday of Korean film is over. Kim Seong-eun from CJ Entertainment Co. says, "The Korean movie distributors, including us, were too focused on raising premiums. As some Korean movie stars enjoy soaring popularity in Japan, the loyalty premium to pay for their films also increased. During this time, we may have contracted a strange virus that got us into thinking that we should sell to Japan at least at such and such price, say, several million dollars."

"The current situation is a time when "the bubble is bursting," says Ji Sang-eun from Cine Click. "Some Korean entertainment companies are even trying to sell films that are not suitable for the foreign market. It reduces the overall Korean movies’ competitiveness abroad. The trouble we are going through is something that we will have to face sooner or later, if not now."

Also, not just the Japanese market but the overall Asian movie market is showing a decreasing demand for Korean movies. Son Min-kyung of the Show East Co. says, "The movies that used to enjoy box office success, such as melodramas and romantic comedies, are not doing very well now. Foreign buyers told me that Korean movies’ storylines are more or less the same. It starts funny, gets sad later, and someone dies in the middle."

Meanwhile, the Japanese movies are enjoying renewed popularity in Asia, with the Japanese film "Shouting Love in the Center of the World" getting an especially good response. And Japan’s production of animated and epic films are expanding further, nibbling at the Korean movies’ market share.

One solution to the issue is to decrease the Korean film industry’s heavy reliance on the Asian market, with Japan at its center. In 2005, among the total Korean film industry’s overseas sales of 76 million dollars, the Japanese market took 79 percent. Japan also took 87 percent in Korean films’ Asian market.

For the non-Asian market, the revenue in 2004 was 13 million dollars, which dropped to 9.85 million in 2005. The situation for this year is likely to improve, as demand from South America and Eastern Europe for Korean movies is increasing. Kim Seong-eun of the CJ Entertainment Co. says, "During the Cannes Film Festival, Eastern European buyers turned out in record numbers to buy Korean films. Thanks to them, we had record sales figure for the region. We also for the first time signed contracts with movie importers from Brazil, Argentina, Chile, and Colombia all in separate deals. In the past, we only made deals with Mexico, which then distributed the Korean movies to other South American countries.

However, with the Japanese market shrinking, the currently available foreign market may not satisfy the ever increasing Korean movie industry. In this context, there are emerging more diverse and aggressive approaches to explore the foreign market.

Last May, CJ Entertainment Co. distributed the film "Typhoon" in the United States, the biggest movie market in the world, in the form of direct distribution. "Even though it was on a scale of 20 to 30 movie theaters, it was an opportunity for us to better understand the U.S. market," says Seo Hyun-dong, an overseas project manager at the CJ Entertainment. "The ultimate goal for us is to have a base in the U.S. and provide Asian content there as a specialized local distributor," adds Seo. The CJ Entertainment is also pushing forward to shoot a film in the United States and also has plans for a co-production with Japanese filmmakers. It is also keeping an eye on the Chinese market, with a view to developing local content suitable for Chinese cinephiles.

Prime Entertainment Co., which is collaborating with Focus Pictures, a subsidiary of Universal Studios, in co-producing the movie "Julia Project," is showing more enthusiasm. "Only a movie that is made in the English language can fare well in the North American market," says Lee Seung-jae, vice president of the company. "Although we have hired an American director and Hollywood actors for Julia Project this time, we’ll eventually have the elements of Korean creativity melded into our films made in America," said Lee.

One of those films, "Lee Sim," a South Korean co-production with Hollywood, and several new action movies spearheaded by director Jung Doo-hong, are all seen in this context. The same goes for Big Blue Film Co., which is planning a direct distribution of the movie "The Host" in China. This international drive is seen in attempts to adapt movies with traditional Korean themes into ones that appeal to broader Asian taste, as seen in "Cherie Chung" and "Late Autumn."

Korean filmmakers are quick to point out that the current downturn of the Japanese market does not necessarily mean the road to global expansion is blocked. As to the sluggish export of Korean movies abroad, they find the reason in the lack of content or entertainment value in the movies, or the failure to take advantage of the international popularity of some Korean movie stars. They are optimistic that by the time new movies with solid plots will hit Japanese movie theaters in the second-half of the year, such as "You’re My Sunshine!", "Welcome to Dongmakgol," "The King and The Clown," and "The Host," they expect that these films will bring positive change in the Japanese movie market toward Korean productions.


This article, which first appeared in the July 18 issue of the weekly magazine Cine 21, was written by Mun Seok and translated by Lee Seong-hyeon