Yen for pic exports yields … big yen

In 2004, Korean distribs saw 88% increase in revs over previous year

TOKYO — These days, barely a month seems to pass without a new eyebrow-raising minimum guarantee paid by a Japanese distributor for a South Korean film.

With the $8 million pre-sale of “April Snow” to Universal Pictures Japan earlier this year, the average price for Japanese rights paid for a major Korean pic now hovers between $3 million and $4 million. This covers 70% to 80% of the typical Korean pic’s budget — and sometimes, more than that.

For example, “April Snow,” which stars Korea’s top heartthrob, Bae Yong-joon, cost just $6 million to make.

Korean distribs sold 194 films in 2004 to 62 countries for $58 million, an 88% increase in revenue over 2003.

The lion’s share of exports, 69%, went to Japan, where the Korean film boom shows no signs of abating.

Despite the historically tense relationship between Japan and Korea, the two neighbors have recently formed a bridge in pop culture.

“Culturally, we are very close,” explains Takeo Hisamatsu, managing director of production and theatrical distribution at Japanese major Shochiku, which has released several Korean pics, most notably, Lee Je-yong’s “Untold Scandal.”

In fact, some stars, like Bae, have a stronger following in Japan than they do in Korea.

Korean pics have also found markets in other Asian territories, including Hong Kong, Thailand and China — but to a much lesser extent than in Japan. A key reason for this is that Korean films have largely priced themselves out of those markets.

Some Japanese distribs are beginning to speculate that the same thing will happen here. With about 20 Korean releases garnering considerable pre-sale and promotional spends in Japan during the past several years, only four made it past the magic billion yen ($9.4 million) mark at the local box office.

Korea’s B.O. leader in Japan remains its first big export hit, “Shiri,” which took in $17.6 million in 2000. “Windstruck,” a Korean co-production with Hong Kong, ranks virtually neck-and-neck. Next in line is “Tae Guk Gi,” which garnered $14.1 million last year.

“I’m afraid it’s a bubble economy,” says Shochiku’s Hisamatsu. “By the time one releases (a Korean film) next year, you never know (how the market place will react). You don’t know if that phenomenon is still there. I’m worried about it.”

Still, among Japanese distribs, this opinion is far from consensus. “Even if Korean films have become too expensive, they remain a safer business than a mediocre Hollywood film that would cost the same,” says another exec. “Even if theatrical disappoints, the DVD release will bring profits, mostly thanks to (Korean) stars.”

The performance of Korean pics in Japan this year will likely determine whether the pre-release price tags continue to increase. And for Korean distribs, it’s so far, so good.

Their latest export, Kim Jee-woo’s “A Bittersweet Life,” was acquired by Nippon Herald Films and Pony Canyon for $3.2 million late last year. Released in Japan last month, its first weekend brought in $642,000 on 126 screens, a good start.

Meanwhile, Japanese distrib Gaga is planning a major fall release for its $2.7 million acquisition of CJ Entertainment’s “A Moment to Remember.” And of course, there’s “April Snow,” which UIP Japan plans to unspool this coming autumn.

“The prices are up, but the potential is there for films with good scripts and strong credits,” says Cine Quanon prexy Lee Bong-ou, who acquired “Shiri” together with Amuse Pictures (now Toshiba Entertainment) back in the late 1990s. “We like to be involved as early as possible and get good films even if there is a risk.”