South Korea Country and Korean Film Industry - Essay Example

 South Korea Country and Korean Film Industry The Republic Korea, the official name for South Korea, is a country with a population of 48 million people located on the southern part of the Korean Peninsula in East Asia. From the economic perspective, since 1960s South Korea has been one of the world’s most rapidly growing economies (The Korea Times, 2010). Today, South Korea is the largest economy among the Four Asian Tigers and is in the top 15 largest economies in the world. According to the statistical and analytical data produced by reputable the Economist Intelligence Unit (2010), South Korea scores 7.37 out of 10 on Unit’s value index, with country’s majority indicators like sovereign risk, currency risk, banking risk, etc marked as BBB or BB, meaning not risky. From the critical perspective, this economic and political outlook does not look surprising given that South Korea has been for a long time one of the most advanced and promising countries of the East Asia. Despite the recent world financial crisis that impacted almost every country and every economy, the prognosis on South Korean Real GDP growth is optimistic, changing from 0.2 in the year 2009 to 5.9 in the year 2010 (EIU, 2010). Given the overall stability of banking sector and national economy, consumer price inflation revolves steadily around 3% with slight deviations of 0.2-0.4 % (EIU, 2010). Among other Eastern Asian political regimes, South Korean democratic regime has been widely acknowledged in academic literature as one of the most successful (Shin et al., 2005). This position is widely rested on the various factors, particularly a peaceful transition from the authoritarian regime in 1987, the election opportunities and freedoms of citizens to choose the head of the executive and legislative branches of power during democratic elections, the existence of multiparty competition and adherence to basic human rights, freedoms, and values (Shin et al., 2005). SOUTH KOREAN FILM INDUSTRY: MACROECONOMIC OVERVIEW From 1990s, South Korea film market has been continuously rate third in the word in terms of occupancy rate, an indicator for percentage of domestically produced films demonstrated in a country. In terms of sales produced by theaters and home videos, South Korea market belongs to the top 10 world’s largest movie markets. According to the analysis provided by Kim and Doh (2006) during ten year period, from 1995 to 2005, South Korean film market grew 500% from $200 million to almost $1 billion (Kim & Doh, 2005, p.34) (see Figure 1). Figure1. Changes in South Korea Film Industry from 1995 to 2005. Numbers in Korean Won (Kim & Doh, 2005). In terms of movie production, South Korea demonstrated less dramatic changes, revolving from 60 to 80 films released (Kim & Doh, 2005, p.34). These changes are not impressive for domestic film production given that the number of screens emerged from 570 in 1955 to 1600 largely due to development of multiplex movie theater format (Kim & Doh, 2005, p.36). Simultaneously, film production costs increased sufficiently indicating the investing potential for South Korea film industry. In 2005, average production costs for a movie constituted astonishing $4 million (Kim & Doh, 2005). The number is impressive given that popular film Shiri amounted only $2.7 million in production. Therefore, industry analysts were not surprised with production costs for TaeGuGi (2004) and Typhoon (2006) breaking $15 million budget mark. Figure 2 provides a visual representation for the range of movie production costs. The overall film industry growth in South Korea during 2000s is also explained with the fact that almost 80% of South Korean films were exported to other Asian countries and according to Lee & Kim (2006) many of them were successful due to cultural, linguistic and religious similarities (p.14). Figure 2. Production costs of South Korea films 2004-2005 (Kim & Doh, 2005). SOUTH KOREAN FILM INDUSTRY AND ADOPTION OF WIDE RELEASE When discussing South Korean film industry it is important to assess its phenomenon taking into consideration globalized context of world’s film industry, more specifically Hollywood commercial and strategic impact. For instance, in 2000s Korean film industry’s adoption of the wide release strategy - opening films on the largest possible number of screens - is one of the most obvious examples of Hollywood’s short- and long-term impact in Korea. The wide release is a method of distribution closely related to the advent of blockbusters in Hollywood. It was first adopted in Hollywood with the release of a blockbuster film Jaws (Steven Spielberg) in 1975, indicating that the need to saturate the market arose with the advent of blockbusters due to their huge production costs. In Korea, the wide release was first made possible due to the government’s liberalization of the film market. In 1994, the Korean government eliminated the limit on the number of film prints that were allowed to be imported, which was the outcome of the second agreement signed in late 1988 with regard to the opening up of the Korean film market. At that time, the Korean government agreed to gradually lift the limit on the number of film prints to be imported. While the number was limited to 12 in 1989, it was raised to 13 in 1990, to 14 in 1991, to 15 in 1992, and to 16 in 1993, and permanently lifted in 1994 (Kim, 2005). In terms of its long-term impact, the lift of the limit on the number of the film print brought even more radical changes to the Korean film industry than direct distribution (Kim 2005, p.308). Before this time, a film was typically released in Korea in one or a couple of first-run theaters in Seoul before its release was expanded to other cities and to re-run theaters. This ensured a relatively longer life cycle for a film at theaters and longer period to recuperate costs and make profits, while the limited number of prints and word-of-mouth marketing meant less marketing costs. Yet, with limits on film prints lifted in 1994, Hollywood subsidiaries began to release their films simultaneously across the country. When a film was released on 60-70 screens out of around 600 screens in the mid-1990s, this was unprecedented. Yet, compared to today, the scale of the wide release was still quite limited at that time. In fact, with liberalization of the number of prints, re-run theaters either converted to first-run theaters or, more frequently, were closed down, as they could not meet the required facilities to convert to first-run theaters. This, along with the growing competition from the video rental market, explains the general decline in the number of screens, until this trend was reversed with the introduction of multiplexes in 1998 (Korean Film Commission 2001, p.8). With more screens and the push for wide release in Korea, there have been constant increase and record-setting in the number of screens a film is released during the opening weekend. In November 2002, local comedy Jail Breakers set a record when it was released on 196 screens. Yet, in November 2003, this record increased to 364 screens with the release of The Matrix: Revolutions (Andy and Larry Wachowski, 2003) (Kim, 2003). Especially, the tendency for wide release reached its peak with local blockbusters. For example, in February 2004, Taegukgi was playing on record-high 450 screens, while Silmido was still shown on many screens after being released on 325 screens in December 2003. It is said that these films together occupied nearly 70% of all screens in Korea (Russell, 2005). While this created controversy on big films’ domination of screens (after ample fanfare about the “era of 10 million audiences”), another local blockbuster Typhoon/Taep’ung was rolled out in December 2005 on record-breaking 520 out of 1450 screens. Again, in August 2006, The Host increased this to 620 out of 1648 screens. As the wide release has become the norm of the day, it is commonplace even for a mid-sized melodrama to be released on 300 to 400 screens. SOUTH KOREA FILM INDUSTRY AND INDEPENDENT CINEMA With more screens dominated by both Korean and Hollywood blockbusters and wide-released films, small independent (Korean or foreign) films find themselves marginalized at theaters more than ever before. In the past, these films, if bypassed by the first-run theaters, could often find screens in the second-run theaters. Now, despite the increase in the number of screens, the release condition has ironically become tougher for these films. In addition, as these films often do not perform well at the box office, exhibitors pull them off theaters even before interested audiences had the chance to see them. For example, The Road Taken/Sunt’aek (Hong Ki-sun, 2003), a Korean film about the world’s longest-serving political prisoner, was chosen as an audiences’ favorite at the Pusan International Film Festival in 2003. Yet, it was released on just 20 screens and, only one week after its release, the number of screens was cut down to 3 due to the film’s unsuccessful box office outcome (Kim, 2003). As a result, there were campaigns among film critics and concerned fans to re-screen short-lived Korean films such as Take Care of My Cat (2001), Waikiki Brothers (2001) and Ray Ban (2001). However, this, along with the concern over blockbusters’ squeeze on small films, has not changed much the tough release condition for small independent films and the domination of screens by blockbusters. Given this, some in the Korean film industry argue that the purpose of a multiplex is lost. The introduction of multiplexes was expected to bring diversity to screens, as multiple screens could be used to show various films. In fact, not too long ago, British film critic Tony Rayns praised Korea as a “cinephile nation,” after witnessing a three-screen multiplex playing one Korean, one Hollywood and one Iranian film (Kim, 2004, p.273). However, exhibitors now seek popular and profitable films to fill out their theaters and the wide release has become common. Much like in the U.S., a handful of blockbusters or heavily-marketed films have come to dominate multiplex screens in Korea. In a sense, this development may not be so surprising, since after all the growth of multiplexes in the U.S. occurred in tandem with blockbusters and the wide release. It is nonetheless ironic, since, as Kyung Hyun Kim argues, it is this “cinephile culture” that nurtured the popular interest in films and the resurgence of the Korean film industry (2004, p.272). SOUTH KOREAN DOMESTIC FILMS As the aggressive push for the wide release has dramatically increased the number of screens for some films, this led to a series of record-setting in terms of the number of audiences each film can attract and made it possible to reach the number of audiences previously unheard of and considered impossible, 10 million audiences for a film. For example, 3 out 4 blockbusters that attracted over 10 million audiences - Silmido, Taegukgi and The Host - were wide released. Given this, a open secret behind the beginning of the era of 10 million audiences is the wide release. Only 6 million-budgeted King and the Clowns was released on 250 screens in late 2005, which was increased to 400 screens through the positive word-of-mouth. Yet, King and the Clowns is an exception than a rule that even surprised its director and many in the Korean film industry. In addition, as each blockbuster secured more screens, the time needed to reach 10 million audiences was shortened. It took 98 days for Taegukgi to draw the recordbreaking number of audiences (11,746,135), but King and the Clown to reach this number in 68 days. While it took 112 days for King and the Clown to set a new record (12,300,755 audiences), The Host exceeded this only 38 days after its release (Korean Film Council 2006, p.10). Much as more screens lead to more audiences, blockbusters and heavily-marketed films that rule the screens also dominate the box office revenue. Thus, there emerged the so-called “20:80 law,” meaning that the top 20% of all films released in a year take up the 80% of the total attendance. For example, in 2003, top 50 films, or 23% of all films released, accounted for 80% of the total audiences (Kim, 2004). In 2006, two highest grossing Korean films, The Host and King and the Clown, attracted 25 million people, or a quarter of total audiences for Korean films (Korean Film Council 2007, p.43). In other words, the increase in the total theatrical attendance and the rising market share of Korean films are achieved by the small number of films. Given the ability of these films to garner the bulk of box office revenue, investment funds are also readily available to these films, further reinforcing the tendency for the rich-getting-richer and the poorgetting- poorer. As Soonho Han, marketing director at Warner Bros. Korea, pointed out, “It’s become sort of a winner-takes-all situation in Korea these days” (qtd. in Paquet 2006, p.C2). FILM MARKET COMPETITION AND STRATEGIES Unlike in the past when the release was gradually expanded and therefore a film stayed longer at the box office, the wide release has shortened this period, with average 2.5 weeks for each Korean film (Paquet, 2005), and quickened the pace of the industry. In addition, since there are so many films waiting to be released (between 300 and 400 Korean and foreign films per year), films with poor box office performance are immediately pulled out from theaters, further shortening the period of screening and thus making it difficult to earn revenue. This practice explains what seems to be the industry’s fixation with the box office result for the opening weekend, since this score decides whether or not a film will continue to be screened at theaters. Accordingly, not unlike the U.S., every Monday morning, the Korean media pour out the box office result over the weekend as well as other articles trailing the box office records. It is not difficult to find articles on how many days it has taken for a film to reach a record-setting attendance mark and how a new record-setter has shortened this. In sum, as the Korean film industry had reached a new height, it looks as if numbers rule in the Korean film industry. In addition, after a film is released, the positive box office result is used for publicity in order to attract more audiences, thus giving one more reason to be concerned with the box office. This obsession with the box office result often leads to some unsavory episodes. Korea does not have a nationally integrated computation system which puts together the box office tallies of all screens and films. In this context, with the industry’s fixation with the box office outcome, there were disputes among distributors over what film was the box office winner, especially if there was no major difference in the number of audiences each film attracted. Even when almost 90% of all screens have now joined the computation system led by the Korean Film Council, disputes continue, as distributors declare the box office victory for their films based on attendance figure from the remaining 10% of screens that are outside this computation system. For example, in October 2006, 2 Korean and 2 American films claimed to be box office number 1. In another occasion, distributors publicize their films as the box office number 1, even though this is based on the attendance in Seoul, not the whole country. As Jon Lewis points out regarding box office data in Hollywood, what really matters to these distributors is not the accuracy of their claim, but the impression that their films are the box office winners (2003, p.64). The heated market condition also brought another change in the release pattern. Given the importance of the box office result for publicity and the continued screening of a film at theaters, distributors have constantly moved the release day forward in order to secure audiences’ attention first among films waiting to be released in the same weekend and increase the box office tally for their films in the first week of release. Films were conventionally released on Saturdays in Korea. Yet, in late 2002, then a new distributor Showbox, seeking audiences for its film Addicted, released it on Friday, which was soon adopted by others. Again, in February 2004, Showbox moved the release of blockbuster Taegukgi one day ahead for similar reasons. For a while, distributors released films either Thursdays or Fridays, eventually opting for the former. After that, some distributors came to release films on Wednesdays, starting from another blockbuster Typhoon in late 2005. In one week in April 2006, while three Korean films were to be released on Thursday, all instead ended up being released on Wednesday, as distributors, in response to the rumor that one of them would release its film a day ahead, did not want to be outmaneuvered at the box office. REFERENCES Kim, M., Doh, D. 2006, April. Review of South Korean Film Industry in 2005. Korean Film Observatory. Korea: Korean Film Council [KOFIC]. Kim, Dongho. 2005. The History of the Korean Film Policy. Seoul: Nanam Kim, Jin. 2003. “Korean Films Keep Market Share,” The Korea Herald, 5 November. Kim, Kyung Hyun. 2004. The Remasculinization of Korean Cinema, Durham, London: Duke University Press. Korean Film Commission. 2001. Korean Film Observatory. Korea: Korean Film Council [KOFIC]. Korean Film Council. 2006. Korean Film Observatory. Korea: Korean Film Council [KOFIC]. Korean Film Council. 2007. Korean Film Observatory. Korea: Korean Film Council [KOFIC]. Lee, MyungCheon, & Kim, YoHan. 2006. Cultural Contents Marketing. Korea: Communicationbooks. Lewis, J. 2003. “Following the Money in America’s Sunniest Company Town,” in Julian Stringer (ed.), Movie Blockbusters, London: Routledge: 61-71. Paquet, D. 2005. “The Korean Film Industry: 1992 To the Present,” in Chi-Yun Shin and Julian Stringer (eds), New Korean Cinema, New York: New York University Press: 32-50. Paquet, D. 2006. “Stars Shine as Model for Export Biz,” Variety, 6-12 February: C1. Russel, M. 2005. “Korea Faces Film Diversity Issues,” Hollywood Reporter, 4 January. The Economist Intelligence Unit. 2010. South Korea: Country Outlook. Retrieved May 22, 2010 from The Korea Times. 2010. Seoul Upbeat with Record $41 Bil. Surplus. Retrieved May 22, 2010 from Shin, Doh Chull., Park, Chong-Min., and Jang, Jiho. 2005, “Assessing the Shifting Qualities of Democratic Citizenship: The Case of South Korea,” Democratization. Vol.12, No. 2: 202-222 Read More