hankyoreh

The number of Korean movies released this year surpassed 100 for the first time. At 108 films, this marks a steady increase from 65 produced in 2003, 74 in 2004 and 83 in 2005. According to box office data, Korean movies set a record high theater occupancy rate of 64 percent this year. More than 13 million viewed "The Host" alone. Despite the reduction in the screen quota, which grants domestic films a guaranteed share of screen time, it would seem that the Korean movie industry is reaching its peak. But there is a flip side to this seeming "golden age" for the Korean movie industry.

Of the 108 movies released this year, only 13 broke even. As an individual example, Cidus FNH, which produced 12 movies this year, only three made any profit. CJ Entertainment, another film producer, estimated the earnings of 85 films released in 2006 as compared to their production cost at -29.7 percent, the lowest since 2002. This includes all major releases and excludes only a handful of small or low-budget features.

According to a survey conducted by the Korean Film Council, the number of viewers for Korean movies released in Seoul for the first 11 months of this year was about 23.6 million, an increase of only 0.1 percent from last year. The movie market has witnessed a serious polarization in terms of an ability to attract viewers. "The Host," "The War of Flower," "My Boss, My Teacher," "Hanbando" and "Our Happy Time" attracted nearly 11.35 million Seoul viewers, or 38.2 percent of the total viewership there. Only six Korean movies released in 2006 drew an audience of over 3 million nationwide. "The King and the Clown," which set a record with about 12 million viewers, and "Typhoon," which attracted 4.1 million, were exempt from the data, as they were released in late 2005.

With an average release of two new domestic movies per week, the result has been fiercer competition in marketing and higher production costs. According to the film council, average production costs were slowly rising until last year, but have soared in 2006. The industry predicts production costs for the average South Korean film to be over 5 billion won (US$5.4 million). In comparison, the average production cost stood at 2.5 billion won in 2001, 3.7 billion won in 2002 and 4.17 billion won in 2005.

Amid a multiplying number of films released, stagnant viewership numbers, and rising costs, the industry has also suffered a sharp drop in film exports. The revenue from films showing overseas for the first half of this year was about US$17 million, a 58.3 percent drop from the year prior, said the council. Exports to Japan, in particular, dropped 71.8 percent compared to last year, due to the failure of the 61 films released in Japan in 2005.

Regarding the sudden increase in movie production, Lee Seung-jae, head of Prime Entertainment, said, "It was because of changes in the business environment, rather than because of accumulated internal capacity" in the film industry. It looks as if film producers have carelessly made movies without planning out how they would fare in competition," said O Gi-min, head of iFilm.

Mobile carriers moved into the cinema industry this year, as well, with SK Telecomm becoming the largest shareholder of entertainment company iHQ, and KT and KTF buying a 51-percent share of Cidus FNH.

Producers, investors and distributors agree that 2007 will see less than 100 domestic films released, due to a predicted slowdown in investment in the industry. Lee of Prime Entertainment was one of those pessimistic about the industry’s fate next year, saying it will not be able to attract as much investment as it did this year. Kim Tae-seong, a publicity official at Show Box, a major film producer, predicted that only about 80 films will be made next year. Fledgling directors were behind as many as 46 movies this year, but their efforts produced little or no performance of note at the box office.

Large investors like CJ Entertainment and Show Box plan to distribute nearly the same number of movies next year, but they have declared they will lower the amount of money they will invest in the films in order to deflect risk. Smaller-scale investors are now hesitant to back films, as well.

Please direct questions or comments to [englishhani@hani.co.kr]