A dispute over the division of profits between South Korean exhibitors and distributors may take a bite out of Hollywood profits.
Distribs of imported films get 60% of post-tax box office revenues in Seoul, while in regional areas takings are split 50-50.
Recently, distributors of Korean product — which receive only 50% of revenues — have called on cinema operators to offer them the same higher terms.
In an unexpected twist, the Seoul Theater Assn. has declared that all films will get only 50%.
“Given the constant increase in the number of screens, a lowering of screen averages and the deterioration of profits, this was inevitable,” said STA director Choi Baek-soon.
Although the group accounts for less than 20% of the nation’s screens, and does not have the influence of multiplex chains CGV, Lotte or Megabox, Hollywood branch offices and local producers have criticized the decision.
The division of revenues has taken on increased urgency after the Ministry of Culture and Tourism announced last month that the nation’s screen quota system obligating theaters to screen local films for at least 146 days per year would be halved to 73 days.
The ministry called on exhibs to offer the same 60-40 terms to local films and imports while also proposing a new 5% surcharge on film tickets to be put into a film development fund.