Korean biz mulls ways to flex regional entertainment muscles
|What: 11th Pusan Intl. Film Festival
When: Oct. 12-20
Where: Busan, South Korea
South Korea doesn’t appear among the top 10 countries ranked by GDP, either in cash terms or in purchasing power. But the nation’s economic weight in the entertainment business should not be underestimated.
South Korea ranks as the country with the fifth-largest theatrical box office, behind the U.S., Japan, the U.K. and France but ahead of Germany. And in some measures, Korea’s TV business ranks sixth or seventh.
The question now is when and how the country will start using more of its entertainment muscle in film and TV as well as other media.
To an extent, Koreans are keeping it low-key. Its movie distributors are rarely asked for sums more than 1% or 2% of the budget when acquiring territory rights, and there are no Korean TV formats that circle the globe.
But in other ways, the country is acting more like a heavyweight. Korean TV dramas are wildly popular across Asia and have made an impact in Hawaii and the West Coast of America. The last couple of years has seen the rise of the “Korean Wave,” the launch of MTV K (a Korean-language channel for Korean-Americans big on bands like Linkin Park) and the preem this month of Pusan’s ambitious Asian Film Market.
Hallyu, as the Korean Wave is known in Japan, has matured. With origins in long-running TV dramas that are well-scripted and good-looking, hallyu created a class of gorgeous 20-something stars who move between the small and large screen and gave Korean moviemakers an unsustainable two-year period of riches in Japan.
Meanwhile, though several Korean movies have underperformed relative to the ridiculous prices paid for rights, the spotlight has focused now on music stars, including BoA and Lexi.
Biggest of them all is Rain (Bi) a product of “Full House” TV drama who is a powerful singer and was named this year by Time magazine as one of the 100 most influential people on the planet. Now Korean fashion designers, cosmetics brands and architects are riding the crest.
Reasons for Korea’s cultural success are the sort that will not go away soon. They lie in Asia’s ethnic mish-mash and cultural antagonisms — Japan and China make a point of not seeing eye to eye on most things, but Korean mellers bring tears to the eyes of auds in both countries — and the latent Confucianism that underlies the economic boom of North Asia.
Nowadays, even if Korean movie shingles can no longer pre-sell every pic off the production line, they are still doing sensational business at home. This year alone has seen the all-time B.O. and ticket sales records broken twice thanks to movies low on star wattage and high on story. In a country with a population of 48 million, “The Host” sold close to 13 million tickets for a gross of about $82 million.
While B.O. perfs in Korea for imports “The Island” and “Mission: Impossible III” make for astonishing headlines, reality for many film sellers is that Korean distribs mostly don’t feel the need for much foreign product — hence the low prices.
And in a case of “if you can’t beat them, join them,” numerous foreign firms are now seeking partnerships with Korean companies. This gives them improved market access and a stake in popular product.
Korean majors CJ Entertainment and Showbox are systematically courted by Hollywood studios; Orion founder Mike Medavoy last month bought a stake in production shingle Guardtec; and Gotham’s indie dealmaking king John Sloss has struck a development arrangement with talent agent and producer iHQ. More deals seem set to follow.
Focus Films is now working with Lee Seung-jae’s Prime Entertainment/Innotz on preparing “The Julia Project,” the largest-budgeted — previous reports have pegged it at $20 million — of half a dozen Korean-U.S. projects now in the works. Deepa Mehta (“Water”) is attached to helm.
Country is already a global technology leader thanks to companies including Samsung, Hyundai and LG, and now it is pushing new business models such as the very real-world wealth of online role-playing games and mobile TV.
Korea has the only commercially deployed mobile TV business, and is forecast to have 12 million subscribers by the end of the decade.
Crucial to the long-term success of Korea’s cultural industries will be managing change when the froth comes off the market. They need to learn from the country’s industrial giants, who have made a virtue of adapting to change.
Companies like Samsung have reinvested in innovation, moved into markets far from their Korean base and accepted delocalization of production. But Samsung has quit the movie business. Those that remain need to manage stars’ inflationary wage demands, maintain genre diversity and build bridges with the U.S. and Asian industries.