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Dwindling profits put squeeze on indies

South Korea

SEOUL — 2007 has been something different for Korea’s indie distributors — and not in a good way.

The first quarter has seen overall admissions down 12% from 2006 (which was a banner year), and the Hollywood majors’ strong summer lineup has set many indies running for cover. One exception is Cinema Service, seen to have a particularly strong lineup of local films.

Drama “The Son” went out opposite “Spider-Man 3,” Lee Chang-dong’s “Secret Sunshine” will open opposite “Pirates of the Caribbean: At World’s End,” and high-profile period drama “Hwang Jin-yi” goes out together with “Shrek the Third.”

Meanwhile, the whole economics of producing and releasing local films in Korea has been called into question, due to overproduction and dwindling profits.

With intense pressure from investors to reduce costs, many distributors of local films have started a campaign to lower P&A expenditures. This is being realized partly through a reduction in what is deemed unnecessary marketing (advance press conferences, VIP screenings), and partly through striking fewer prints and encouraging longer runs in theaters.

“Not all releases can be treated in the same way, so we’re considering each film on an individual basis according to its budget and particular character,” notes a representative of distributor CJ Entertainment.

More belt-tightening is expected.

“Up until now, admissions per capita have been rising, and the local market has grown, but now it’s reached its limit,” says Oh Ki-min, CEO of iFilm.

Some hold out hope that new technologies like IPTV will boost Korea’s moribund ancillary markets, but until then, indies are settling in for a lean year.

BOX OFFICE OVERVIEW

Top Film 2006:
“The Host,” $97 million
Total B.O.: $1.1 billion
Total number of releases: 345

Recent Pickups
“Red Cliff” (Showbox)
“Grindhouse” (Sponge)
“Lady Chatterley” (Jinjin Pictures
“Blood Brothers” (MF&C)
“Spider Lilies” (CNS Entertainment)

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