SEOUL — Exports of South Korean films amounted to $24.4 million in 2007, virtually identical to the $24.5 million earned in the previous year.
Nonetheless, the year saw a sharp drop in dollars earned through minimum guarantees amid a broad shift to revenue-sharing deals.
Upfront money paid in minimum guarantees last year amounted to $12.3 million, down 50% from 2006. However, a report issued by the Korean Film Council (KOFIC) estimates the additional income earned through revenue-sharing deals and direct distribution amounts to another $12.1 million.
Information on revenue-sharing income was not included in previous years’ reports, as most deals were structured around minimum guarantees.
The weak performance of many high-priced Korean films in foreign markets caused sellers to become much more flexible in 2007, in some cases eliminating minimum guarantees altogether.
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Exports to Korea’s most important market, Japan, amounted to $3.3 million in minimum guarantees, down from $10.4 million in 2006 and a whopping $60.3 million in 2005. A country-by-country breakdown of revenue-sharing income was not available.
Meanwhile, the annual KOFIC report also sounded further alarms about declining profitability in the Korean film sector.
Production numbers continued to rise last year to 124 films produced and 112 theatrical releases, while admissions to local pics fell by 18% to 80.7 million tickets.
The average budget of Korean films in 2007, excluding independent works costing less than a million dollars and the mega-budget English-language project “D-War,” was $3.4 million plus $1.7 million in P&A spend. Both numbers rep a slight drop from the previous year amid an industrywide effort to control costs.
By the report’s estimate, the average Korean film lost $1.9 million last year, with theatrical releases accounting for 79.8% of revenues.
Widespread illegal downloading as well as pirated discs sold on the street are blamed for the weakness of Korea’s DVD market.
Meanwhile, distributor rankings saw CJ Entertainment take a commanding lead with 29.7% of the market. An output deal with Paramount helped make CJ the top distributor for local films and imports.
South Korea distributor rankings 2007
1. CJ Entertainment (29.7%)
2. Showbox (12.3%)
3. Warner Bros. (11.3%)
4. Sony Pictures-Buena Vista (9.8%)
5. Lotte Entertainment (8.6%)
6. Cinema Service (7.2%)
7. 20th Century Fox (5.6%)
8. UPI Korea (3.5%)
9. Prime Entertainment (3.4%)
10. Studio 2.0 (2.3%)