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Truth behind Korea’s movie boom

January 8, 2014

Koreans are watching more local films than ever, not that they have any say in it

Song Kang-ho, right, in a scene from “The Attorney”

By Yun Suh-young

Kim Seon-hee had eagerly awaited the Korean release of “The Hobbit: The Desolation of Smaug,” the second installment of Peter Jackson’s Tolkien trilogy that rapidly became a global hit.

Never did she imagine she would have a hard time finding a theater that was showing it.

With independent theaters going the way of the dodo bird, most Koreans now watch their movies at multiplexes owned by chaebol groups Lotte and CJ, which are enjoying a virtual duopoly in the market. After probing the Internet, Kim found that Lotte Cinema was showing “Smaug” in only five of its theaters in Seoul. CGV, the CJ franchise, avoided the movie entirely.

Kim did end up watching the film at the old Daehan Theater in central Seoul, which required a longer trip from her home than she would have preferred. “The experience felt unfair. This is one of the biggest works in world cinema this year and it’s snubbed by a large number of screens,” she said.

The Korean cinema is in the thick of a commercial renaissance. More than 200 million tickets were sold at theaters in 2013, a staggering number in a country where the economically-active population is measured at around 25 million.

Gong Yoo in a scene from “The Suspect”

Nine of the top 10 grossing movies last year were Korean, including three different films — “Miracle in Cell No. 7,” “Snowpiercer” and “The Face Reader” — breaching the 9-million mark in audience numbers.

Part of the success could be attributed to the improved quality of Korean movies. Moviegoers like as Kim, however, are eager to point out that there hasn’t been exactly a wealth of non-Korean options at theaters.

For CGV, snubbing “Smaug” was a business decision. The company had been feuding with Warner Brothers, the distributor of “Smaug,” over revenue-sharing. While distributors of foreign films had been getting a 60-percent cut, CGV has been forcing them to accept a 50-50 split since September. Warner Brothers, criticizing the decision as unilateral, decided not to provide its content to CGV.

A similar dispute between CGV and Sony Pictures Releasing Walt Disney Studios Korea resulted in the theater chain excluding Pixar’s “Monsters University.” Lotte has recently followed CGV’s lead and reduced the share of distributors to 55 percent.

CJ-Lotte duopoly

From the viewpoint of consumer choice, the problem is this: Lotte and CGV have little financial motive to promote foreign films, even blockbusters like “Smaug.” In addition to dominating movie theaters, the parent companies of theses multiplexes also have serious control over the major Korean firms producing and distributing films.

When “Snowpiercer,” the American debut of Korean director Bong Joon-ho, was released in August, it was immediately shown at more than 1,100 CGV theaters around the country, simply because CJ Entertainment doubled as the movie’s producer and distributor.

“Smaug,” “Monsters University” and “Thor: The Dark World,” which was released 10 days later than scheduled due to the squabbling between CGV and Sony, still managed impressive audience numbers. This suggests that the demand for Hollywood works are significant in Korea, although there aren’t always enough of them available to customers.

The market share of foreign films had been expected to increase after the Korean government weakened its market protection of local films in recent years. It has been eight years since the mandatory days theaters are required to screen Korean movies were reduced to a minimum of 76 days from the previous 146.

However, the changed rules didn’t have a meaningful impact in terms of diversity in market that has been dictated by Lotte and CJ. Independent directors and studios, who were supposed to be protected by the government-set entry barriers, continue to be marginalized.

“Because companies such as CJ or Lotte invest, produce and distribute their own films, it would be natural for them to distribute the films that they had produced because that’s an easy win-win,” said Park Woo-sung, a film critic.

“Korean moviegoers seem loyal to Korean films, but it’s also because the conglomerates have so much power over the market. Consumers have to play by the rules set by the conglomerates. It’s difficult to find independent Korean films or foreign art films in chain theaters except in programs like Movie Collage where they show various genres of films every month.”

Despite the significant presence of CJ and Lotte in the distribution side of cinema, a new company, actually named NEW (Next Entertainment World), managed to carve a presence in 2013, thanks to its thrillers “Hide and Seek” and “Cold Eyes,” which proved to be sleeper hits.

Still, NEW and Showbox are the only companies that are managing to give CJ Entertainment and Lotte Entertainment competition.

“It’s good to see NEW, a small company, doing so well in the market beating out the conglomerates. We wish it would continue to do well and set an example for the big-name companies. It’s up to NEW to positively influence CJ and Lotte to take the direction that it takes,” said Park.

“What’s different about NEW is that it gives autonomy to the directors. CJ for instance asserts influence in the writing of screenplays. NEW supports the directors financially but leaves the production up to them. That’s why movies like ‘The Attorney’ or ‘The Fake’ could be produced. It focuses on fostering talented directors instead of the short-term gains.”