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Screen quotas raise tricky issues

Trends include greater spending, wider releases

Around this time last year, Park Chan-wook cut a striking figure in front of the Berlinale Palast as he staged a lone protest against the reduced screen quota in South Korea.

Park and many other protestErs still might agree that “Korean Films Are in Danger” — as one side of Park’s placard read last year. But pictures like Park’s Berlin Competition pic “I’m a Cyborg, But That’s OK” continue to demonstrate that it is inventiveness and technical flair, more so than protective policy, that remain instrumental factors in the sustained vitality of Korean film production.

Realizing the commercial potential of this creative nexus — through adjustments in exhibition and distribution — continues to dominate industrial activity. According to the Korean Film Council, another 200 screens opened across the nation last year as rapid multiplex expansion continued. The trend toward greater spending on P&A and ever-wider releases persisted as well, with the 10 top-grossing domestic films opening on an average of 107 screens in Seoul in 2006, compared with 94 screens the previous year.

The 25% increase in admissions to domestically produced films over the past 12 months has further clouded the issue of the screen quota’s midyear reduction.

Under ongoing pressure from U.S. trade negotiators over bilateral Free Trade Agreement talks, the Korean government agreed to reduce the requirements of the quota. Since July 1, exhibitors have been required to screen Korean films for only 20% of the time, halved from a previous high of 40%.

Surrounding a slowdown at the box office in May, premature fears for local films in the wake of the quota cutback were soon dispelled when domestic market share climbed to 83% for the month of September, a period in which Hollywood movies accounted for just 5% of attendance against competition from popular local hits “The Host” and “Tazza: The High Rollers.”

Given the popularity of domestic movies, the quota has been readily achieved without any serious threat to theatrical receipts.

Despite signs of redundancy, the quota maintains strong support within the local filmmaking community. The biz sees it as a symbol for the protection and diversity of national culture during the global shift toward unfettered international trade.

Regardless of the high-profile protests of Park and hundreds more, the government has already endorsed a set of controversial proposals designed to allay fears over the quota reduction and provide more relevant support for low-budget and regional filmmakers, independent exhibitors and film exporters.

Spearheading the concessions is a newly introduced 3%-5% ticket tax, which aims to generate $215 million over the next seven years to feed a $430 million subsidy for a range of yet-to-be determined support programs. Exhibitors are displeased with the tax, and likely to increase prices to offset losses.

Whether previously loyal fans are willing to pay a little more for admission is another unknown.

Questions that remain include doubts over the viability of the government’s probable bid to roll out a new arthouse theater circuit, since major exhib CJ CGV already intends to construct smaller venues and set aside more low-occupancy screens at its multiplexes for noncommercial releases.

Finally, the resentment of film producers and exhibitors toward the government also may factor into future directions. A long-term climate of discontent may manifest in film content, lead to more emphatic bureaucratic impediments within and around the industry, or tarnish Korean cinema’s image as one of the few national cinemas dedicated to exhausting its commercial possibilities.

The relatively harmless reduction of the quota may yet trigger consequences that may kill off auds.

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