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Almost two years since “Parasite” won a handful of Oscars, the impact of COVID has meant that the Korean theatrical sector has been largely unable to capitalize on the trickle-down effect of those wins.
Its current malaise stands in contrast to the pandemic windfalls enjoyed by other parts of the Korean entertainment biz — think BTS, Blackpink, “Squid Game” and the latest streaming phenomenon “All of Us Are Dead.”

The current year potentially holds great things for Korean film, with nearly all of the country’s top-name directors having completed works, but the prospect remains tantalizingly out of reach.

And the longer the hard times continue, the less likely a return to the old normal becomes. That is especially true in a market like Korea, where theatrical revenues typically account for the majority of a feature movie’s anticipated revenues.

Korean movie theaters attempted a return to normal in the fourth quarter last year when government-imposed restrictions were briefly scaled back. But December heralded the arrival of the Omicron variant, a return to audience caution and the renewed postponements of local film releases. December’s big title cancelations included Showbox’s “Emergency Declaration” and “The Policeman’s Lineage.”

Yet despite local films being in short supply, the month turned out better than some had forecast: “Spider-Man: No Way Home” accounted for 66% of December’s box office, but South Korea’s January box office total tumbled again to just 40% of pre-pandemic January 2020. That makes for a distinctly murky outlook in the territory that used to be the world’s No. 4 theatrical market.

“Lineage,” a crime drama with a starry cast from rising studio Acemaker Movies, was seen as a litmus test by many. It shifted its release from December to Jan. 5 but grossed an underwhelming $5.56 million.
CJ Entertainment hedged its bets with the seasonal rom-com “A Year End Medley,” releasing it simultaneously in theaters and on its Tving streaming platform. Receipts in theaters failed to top $2 million, and online viewing numbers remain undisclosed.

The end of January saw two further tests: “The Pirates: The Last Royal Treasure,” a sequel to 2014’s hit “The Pirates,” and political drama “The Kingmaker.”

Production of the “Pirates” sequel was interrupted by COVID. So too was its release. Originally scheduled for Chuseok (Korean thanksgiving), it opened on Jan. 26, aimed at the Korean Lunar New Year crowd instead. After eight days in theaters, it can claim to be the biggest local film so far. But its $7.1 million holiday haul looks weak compared with its reported $20 million budget and is a fraction of the $64 million earned by its predecessor.

Korean distributors and sales agents variously estimate that there are now 100-200 completed local movies waiting for the right moment to release, with the local majors CJ and Lotte Cultureworks each holding back perhaps 20 titles.

“There may be a silver lining in terms of quality, in that some films without a release date are spending more time in post-production,” says Kim Yun-jeong at sales agency Finecut. But “The Kingmaker” may be an object lesson in the dangers.

The 1980s-set film about behind-the-scenes political machinations is reported to have been completed two years ago and opted to release during the build-up to this year’s real-world presidential election. It opened in second place, but grossed less than $4 million in its opening, holiday week.

The longer that local films stay out of theaters the weaker that Korean producers and exhibitors become.
“Even the big companies don’t have bottomless purses. The money has been spent on producing movies they are unwilling to release — nobody wants to give up their upside — but it means they are unable to greenlight many new pictures,” says Jonathan Kim, industry veteran and head of indie producer HanMac. “And for smaller producers, they are now doing the development and looking to sell the film as a project to Netflix instead.”

Recent data underline the pendulum swing from feature film to series.

Exhibitors have endured nearly two years of losses — July to September deficits at CJ-CGV were $65.7 million for example — and they are expected to scale back the number of venues they operate.
Similarly, gross revenues for all Korean films in 2021 amounted to just $149 million, compared with $837 million in 2019.
Thanks to the likes of “Hellbound,” “Kingdom” and “Crash Landing on You,” the export volumes and values of TV content have increased, recently released trade data for 2020 showed.

The plight of the feature film and exhibition sectors plays into the hands of the streaming operators and those producers nimble enough to pivot from movies to series.

South Korea is already among the most competitive streaming markets in the world and sees the likes of Disney, Apple and HBO going head-to-head with local platforms Tving, Watch, Waave, regional player Viu and the Korean market leader Netflix. All are intent on building substantial slates of Korean content.

“There is a flight of directors and talent from film to streaming series. The U.S. streamers have an appetite for Korean films or mixed-language shows, and want to use Korean directors to make them,” one former financier now pivoting into content production tells Variety. He requested anonymity until his two 2022 shows are officially greenlighted by the platforms.

Others also see this moment as a paradigm shift. Spackman Entertainment, an overseas investor that has assembled a portfolio of Korean entertainment assets, last year announced the sale of Zip Cinema, a boutique producer that was behind “My Brilliant Life,” “The Priests” and was a minority investor in Bong Joon Ho’s 2013 “Snowpiercer.” Despite Zip also backing one of 2022’s hottest movies, the Kore-eda Hirokazu-directed “Broker,” Spackman says there are better opportunities outside the Korean film sector.
“Against the backdrop of uncertainty of the entertainment sector brought about by the COVID-19 pandemic, particularly in relation to the theatrical film industry, the proposed disposal [of Zip] will [permit] business diversification and to expand into other businesses, in particular, co-producing and financing U.S. films which are potentially more profitable than Korean films due to a wider international audience base,” the company said at the end of 2021.

HanMac’s Kim says the success of the streamers, and Netflix in particular, is driving other long-term changes.

“Netflix is releasing Korean content in 190 countries, simultaneously and without sales issues. Take ‘All of Us Are Dead,’ which is overnight a global hit, as an example. The cast are all unknowns, but they are loving the exposure and can expect more work,” says Kim.

There is also an impact on cost and availability.

“Everybody is working, which meant I had a really hard time getting the cast for my next movie,” Kim explains. “And at the same time the streamers are discovering how much cheaper it is to produce in Korea, compared to the U.S. They can afford to pay well by Korean standards, which has the effect of driving up production costs across the board.”