SEOUL — South Korean production company Myung Films is turning to an unlikely source to secure funding for its latest project — anybody with an Internet connection and an interest in movie.
The maker of 2000’s megahit “JSA” announced it would raise the entire budget for its new pic, “Hello and Goodbye, Little Brother,” by allowing ordinary people to log onto its Web site and click in their investments.
The way it works is temptingly simple. During the two-day period of Nov. 23-24, Myung Films will accept investments on a first-come first-served basis through its Web site (mkbuffalo.com/investment) until the entire budget of 1.95 billion won ($1.77 million) has been amassed. Each “share” will be sold for $910 with a limit of 10 “shares” per person.
The payout depends on the number of viewers who come to see the film in theaters. The 1.2 million viewer mark has been declared the breakeven point, and for each additional viewer past that hump, 0.6 won (a small fraction of a penny) will be disbursed per share. If the film draws 2 million viewers nationwide, for example, those who bought one share will make $436.
Myung Films tested out a similar method last year to raise part of the budget for “A Good Lawyer’s Wife.” The experiment was a success, as the film went on to attract 1.7 million viewers nationwide, producing profits of 70% for those who took part in the Internet fund.
The move is being watched closely by the local film industry as a promising means of raising money and generating publicity. Myung Films has welcomed the role of a trailblazer, establishing norms and safeguards while working out the legal kinks.
“The Internet fund could well become a new trend in the local film industry, but it requires a sizable staff to manage the investors and some financial latitude to provide safeguards,” says Kim Sang-don, accounting manager of KangJeKyu & Myung Films, which is producing the pic. “It may actually be better suited for well-established companies rather than cash-starved start-ups.”
The script of “Hello and Goodbye, Little Brother” was made available online Nov. 15 to help people make up their minds about its profitability. Investors will also receive regular updates throughout the production stage and weekly box office reports after its release. In the event of a flop, investors can suffer losses of only up to 20%.
Some concerns remain. Despite rapid growth in recent years, the local film industry remains on fragile ground in terms of profitability, as much of the money flowed to just a few megahits. Of the 64 Korean pics released last year, only 20 produced profits while the rest suffered losses. This year, only about a third of the 62 Korean pics released through October reached the 1.2 million viewer mark.
Nevertheless, industryites are generally lauding the Internet fund for improving transparency and stimulating interest from the public. “We are making sure that the investors will know what we know so that they can make informed decisions,” Kim says.
“Hello and Goodbye, Little Brother” is the story of a bratty 9-year-old boy who has to grow up fast after his older brother gets cancer. It is set for an April 2005 release.