|B.O. cume (through Sept. 25): $585 million (97.6 million admissions) *
Top title: “Welcome to Dongmakgol” (Showbox; 7 million-plus admissions)
* for approx. 70% of the country
The remarkable development of the Korean cinema industry, which has seen a ballooning of multiplexes, numbers of films distributed and a swelling of auds, makes Korea look like a golden opportunity for foreign sellers. But, in practice, it is proving a tough place to do business.
“I’m cutting back on the number of pictures we buy and becoming much more selective,” says Taewon Entertainment CEO Chung Tae-Won, reputed to be one of the shrewdest buyers in Asia. The company is instead upping its local production activities, which Chung sees as less risky and currently offering more upside than anything but the biggest Hollywood titles. “At AFM, I’ll only actively pursue titles like “Meg” ($100 million-budgeted Jan de Bont-helmed shark thriller sold by New Line) and “His Dark Materials” (also from New Line). And I expect them to be sold in a package with other films that have less potential.”
With the biggest multiplex operators — CJ and Showbox — expanding their production, finance and distribution capabilities, indies are finding it tough to obtain and hold on to screens. To create visibility in this environment means upping marketing efforts. P&A costs frequently exceed $1 million for independent titles.
Making matters tougher still is the shrinking of the ancillary homevid and TV sales markets. DVD has never taken off in Korea, and the proliferation of cable and satellite channels has drained the established broadcast nets of ratings and purchasing power. And while Korea has a blossoming IP-TV sector, few players except pirate operators have yet found a reliable way to make money from broadband distribution.
As market conditions become trickier, other distribs are also slowing their acquisition activities. There were no major deal announcements from Korean buyers during either the Venice or Toronto film festivals. Foreign sellers may have to reduce their asking prices from the typical 3%-4% of budgets or risk not making deals in the territory for certain pictures.