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A New Era of the Film Industry

Watching movies is a leisure activity that provides great happiness to our daily lives. Korea’s film industry started in the early 20th century and has grown constantly. Ever since film director Bong Joon-ho’s Parasite won four Academy Awards at the 92nd Academy Film Festival in February, the status of Korean film has been rising internationally. However, there are many problems in the film industry especially due to the coronavirus disease 2019 (COVID-19). The film industry would have to prepare for a new future to overcome this situation. Therefore, the Sungkyun Times (SKT) will look at Korea’s film industry and its future.

Film Industry in Korea

Recession of the Film Industry

The Korean film industry developed rapidly during the early 20th century, but it also experienced a period of recession during the 1970s due to the strengthened national control. The strained political and social mood under the Revitalizing Reforms system and changes to the media environment due to the dissemination of televisions have caused negative effects on the potential of the film industry. Revitalizing Reforms, a system that President Park Chung-hee established in 1972, suspended the normal functions of the country to allow the president to maintain his authority. Therefore, the film policy made under the Revitalizing Reforms system further caused the structure of the film industry to be entrenched as a form of monopoly, and the film’s contents to be changed according to the nation’s power. Also, the number of television sets increased by 1.6 million units in 1974, further deepening the recession period. In the 1980s, with the continuation of the revision of the film law, the voice calling for the relaxation of regulations and establishment or supplement of policy got stronger. Although the trend of the 1970s has continued, some changes were introduced to the film industry. While the official definition of movies did not change under the law, the concept expanded to encompass a wider variety of constituents. Also, the number of private companies increased, activating activities from related associations.

Overcoming the Recession Period

In the 1980s, the wave of liberalization and openness, along with the combination of the aspects mentioned above, led Korean films to diversify their storylines. There was an innovative change in the 1990s when Korean society had just begun to take a path toward democratization and globalization. The continuation of liberalization and openness eased regulations, expanded support, and systematized the film planning, production, distribution, and screening. The expansion of funds and human resources also allowed Korean films to diversify and improve in quality. Amidst these changes, movies started to be considered as an industry, beyond the form of art. The qualitative and quantitative growth, as well as the changes in the theater environment and system, such as the emergence of multiplexes, allowed for the film industry’s exponential growth. Multiplexes refer to theaters with at least seven screens showing different movies. They were introduced to Korea with the establishment of the Gangbyeon CGV with 11 screens in 1998. Furthermore, hits were produced, raising the status of Korean film internationally. Chihwaseon (2002) and Old Boy (2003) won awards at the Cannes Film Festival, and the popularity continues today after Parasite (2019) won four awards at the Academy Film Festival.

Gangbyeon CGV, the First Multiplex, Parasite Winning Awards(news.kmib.co.kr, joynews24.com)

The Crisis of the Film Industry

As of 2019, Korea’s film industry sales have ranked in the top five internationally and the average number of times one person annually goes to watch movies is 4.37. However, there are controversies over the film industry due to the distribution market, along with uncertainty due to the reduction in sales caused by COVID-19.

Problems of the Distribution Market

Unlike France, the United States (US), and Japan, Korea has three main multiplexes: CGV, Lotte Cinema, and Megabox that dominate more than 90% of theaters and distribute 40- 60% of movies. Originally, the film industry had a basic structure: planning, investment, production, and import, so film producers, importers, and distributors played respective roles in the progress. Companies nowadays, however, have their subsidiary companies covering most of the film making process. For instance, Lotte Group has investment and distribution company Lotte Entertainment and the movie theater, Lotte Cinema. If a major company controls all the levels of producing films like this, this will lead to vertical integration, further resulting in screen monopoly. In fact, The Battleship Island (2016) swept 78% of screens upon its release and proved the controversy concerning screen monopoly. People criticize these companies, referring to them as the ecosystem’s bullfrogs with huge capital on their backs that take away opportunities of films from small to medium-sized corporations. Also, screen monopoly forcibly deprives the rights of consumers to choose movies they want to watch. Netizens complain that some of the movies they want to watch are shown early in the morning or late at night and sometimes even finish screening too early.

Frozen 2 Screen Monopoly (yna.co.kr)

Changes in the Film Industry Due to COVID-19

The chances that the film industry will recover is highly unlikely as COVID-19 changed the distorted structure of the film industry. Due to COVID-19, when people became reluctant to visit theaters, ticket prices increased and the number of theaters reduced. In October, CGV, the number one movie theater in Korea, suddenly announced an increase in ticket prices from 11,000 won to 12,000 won (weekdays) and 13,000 won (weekends), and other theaters are also considering raising their prices. CGV also announced plans to shut down 30% of their theaters in three years, which means that 100 theaters will be closing every year. The culture of watching movies will change as many movies are being released through over-the-top (OTT) services such as Netflix and Watcha. OTT refers to a service that provides multifarious media content such as movies and broadcasting programs through the internet. In fact, Time to Hunt (2020), a movie starring many famous actors, was released on OTT, rather than movie theaters. The struggles of independent and artistic filmmakers and actors have worsened as people rely less on visiting theaters to watch movies because independent and small-sized film industries rely on audiences. The changing norms of watching movies due to COVID-19 could negatively affect the film industry by causing the culture of visiting theaters to wane.

New Era with OTT Services (hani.co.kr)

For a Better Film Industry

Regulations to the Screen Monopoly

There are insufficient laws that directly regulate screen monopoly in Korea. Some countries have already legally solved the screen monopoly problem. For example, France’s screen quota system is a system that limits the number of screens of a movie under the Consensus of Compilation. There are voices requesting improvement of laws in Korea. By establishing a screen quota system or a law that prohibits vertical integration, more opportunities could be provided to films from small companies, further increasing the integrity of the film industry. However, excessive regulation may lead to the shrinkage of the film industry, so there should be a careful approach, such as the mindful intervention of the Fair Trade Commission (FTC).

Supporting Independent and Artistic Films

Independent and artistic films are the key components to making the film industry more diverse. Due to the structure of the industry, however, they are suffering from a lack of distribution and advertisement, and they are placed in the blind spot from receiving various support. Also, independent filmmakers’ and actors’ lives are threatened due to the lack of work. Therefore, a distribution center solely for independent and art films should be operated. Through the distribution center, a network could be formed through cultural centers or independent movie theaters across the country, and this could be managed by the Korean Film Council (KOFIC). There is a positive prospect that the expansion of OTT streaming services could be the new distribution channel for independent and artistic films. The Naver Indie Theater, operated by the Association of Korean Independent Film & Video (KIFV), is a good exemplar of an OTT streaming service. If distribution channels are expanded and revenues are generated, this cycle will allow independent and artistic filmmakers to continue creating films while bringing diversity to the film industry.

Targeting Worldwide Film Market

For both quantitative and qualitative growth, films that attract the attention of foreign audiences have to be produced. Since Korea’s film industry has neither the borderless content power that Hollywood has nor enough money to buy theater chains like China, an effective localization strategy must be developed with the help of skillful experts. By working with foreign movie companies from planning to production, skills may be combined to produce high-quality original films. Another effective way would be to remake a foreign version of a movie that is already famous in Korea. Sweet 20 is a great example of a movie that succeeded in China, Vietnam, and even in Turkey, Spain, and England. This would be more valuable than just simply increasing sales. Films must evolve into colorful forms including a large spectrum of genre and sentiments, without restraining themselves in the frameworks. If the film industry maintains Korea’s individuality while forming an international consensus, it will find much greater success in exporting films.

Different Versions of Sweet 20 (mimint.co.kr)

Korea’s film industry has undergone many changes throughout its long history. However, internal problems within the industry, Hollywood’s absolute dominance over the global market, and the uncertainty of the COVID-19 era may hinder the growth of the film industry. The history of the Korean film industry will grow richer if these internal problems are resolved, and films are consistently produced through the maintenance of Korea’s own culture and the creation of a global consensus.

이혜준  hj928123@g.skku.edu

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