Berlin Daily Spotlight: Korean Cinema
One of the big dramas playing out in the Korean film business today is the changing landscape among local distributors.It was ignited by CJ E&M, which was re-established as a massive enterprise in the local entertainment business in April, 2011. The company merged film, music, game and media companies under one roof in order to maximize the synergies of vertical integration. It distributed more than 50 foreign and local films under three labels last year: CJ Entertainment, newly consolidated CJ E&M, and its specialty division Filament Pictures. The three labels dominated the industry by grabbing a total market share of 37.4% — up 7.1% from the days of CJ Entertainment in 2010. Local distributors’ market share was much bigger than that of the U.S. direct distributors last year. In 2010, three direct distribs — Fox, Warner Bros. and Sony Buena (Sony Pictures Releasing Buena Vista Korea) — were included in the top five distributors list and got a market share of more than 30%. However in 2011, four out of the top five distributors were local. Only Sony Buena was included in the top five ranking with a relatively small 8.5% take at No. 4. Following CJ E&M, Lotte Entertainment ranked No. 2; Next Entertainment World was No. 3 — with a 15.4% and 9% market share, respectively. Showbox, which was the second-biggest local distributor until 2009, ranked No. 5 with a 7.9% take. Lotte Entertainment has made the most conspicuous advance among local distribs. It held the second rank with a 15.4% market share for the first time since its launch in 2004; this was up by 3.7% up compared to the previous year. Lotte distributed 30 films, of which 21 were local, including last year’s No. 1 at the B.O., “Arrow, the Ultimate Weapon.” After Showbox Mediaplex sold off its multiplex chain Megabox, Lotte became the only company that can compete with CJ E&M by vertically integrating its film business division with its affiliate exhibition business, Lotte Cinemas. The company also officially launched its international department in 2011 and plans to expand globally. This ambition was underlined in December, when group chairman Shin Dong-bin exchanged a memorandum of understanding with Los Angeles mayor Antonio Villaraigosa. “Lotte aims to grow as one of the leading entertainment companies in the world stage,” according to Son Kwang-ik, the president of Lotte Entertainment. These changes were partly brought about by the inactivity of big telecommunication conglomerates Korea Telecom and SK Telecom, which made a lot of noise six years ago with declarations that they were entering the content business by setting up their affiliates distribution companies, SidusFNH and IHQ, respectively. However, SidusFNH failed at the box office and IHQ shut down its distribution business last year. SK Telecom did manage to co-distribute the war movie “My Way” through its platform company SK Planet along with CJ E&M, but it failed again at the box office. The third leading local distributor, NEW, released 20 films, half of which were local. It turned out surprising hits such as “Blind” and “Poongsan.” Showbox experienced a downturn at the box office, but it has released critically acclaimed films, including “The Front Line.” The four major investors-cum-distributors are now taking in a market share of almost 98%. It’s anticipated that they’ll also lead the market in 2012.
Comeback of the local business | Distribution revolution: shifting ranks | From ‘Achitect’ to zombie