Studios are churning out too many films in the local market and this oversupply can lead to a prolonged depression in the movie industry, a report said Tuesday.
According to the Korean Film Council, only 13 out of 112 Korean films released last year made profits. Their average production cost was 4.2 billion won, whereas their average ticket sales remained at only 2.4 billion won.
``Around 70 Korean films were released each year before 2006, when the number suddenly jumped to 102. This, together with the lethargic growth of the Korean cinema market, has lowered revenue for each film,'' said Ko Jeong-min, a senior researcher of the Samsung Economic Research Institute.
``The number of movies required to break even (for Korean film studios) is estimated to be 72 films for the foreseeable future,'' he said.
Korean filmmakers rely on local cinemas for almost 80 percent of their revenue. On the contrary, in the United States, ticket sales at theaters make up only around 15 percent of the revenue while the rest comes from DVD, TV broadcasting right sales and exports.
The local movie industry had enjoyed a brief boom since 1999 with the release of ``Shiri,'' the first Hollywood-style big-budget action movie. Over the next six years, a string of blockbusters such as "Silmido," and "Taegukgi,'' and dramas like ``King and the Clown'' followed, each drawing more than 10 million people to cinemas.
In 2006, the Korean film industry began to falter as moviemakers chose the quantity-over-quality strategy. Only 20 of 102 movies screened that year managed to offset the production cost with ticket sales. The bad mood continued through 2007.
``The increased number of productions is due to a large number of new production companies flocking to the market and venture capital firms looking for one-time investment opportunities in the entertainment industry,'' Ko said. ``The corporate participants included some from unrelated fields, such as the telecommunications industry.''
Telecom firms such as SK Telecom and KT joined the movie scene in 2005 in an effort to diversify their portfolio into entertainment, broadcasting and contents. The two rivaling companies have competitively spent tens of billions of won on producing a number of films, many of them drawing little attention. The two firms even started distributing films by themselves, with the release of movies ``Miss Shin'' from KT last month and ``Once Upon A Time'' from SK Telecom this month.
To overcome its slump, the Korean film industry needs to learn to control the number of movies made and the production budget, Ko said. He also urged studios to be more creative and stop making cheap comedies and gangster movies with similar themes and inane plots.
According to Businessweek, the United States produced 739 films in 2001 with an average production cost of $47.7 million, about 10 times the budget of Korean movies. But it was not the most prolific movie-making nation in the world. India's so-called Bollywood industry made 1,013 films that year at $1.5 million on average for each of them.
YES, FROM THE WTF DEPARTMENT. KOREA'S SECONDARY MARKET KEEPS SHOOTING THEMSELVES IN THE FOOT. THEY TURN ANTI-JAPAN AND THE FILM QUALITY DROPS AND JAPAN QUITS BUYING KOREAN FILMS. THE DVD MANUFACTURES MAKE THE DVD PLAYERS PRICES SO HIGH THAT A NORMAL FAMILY CAN NOT AFFORD A SIMPLE DVD PLAYER AND KOREA IS STILL STUCK IN THE VHS MODE.
I HAVE SEEN ALL OF THESE HDTV'S AND THEY ARE PLAYING VHS, WTF? IT LOOKS LIKE THE AMERICAN FILMS ARE KEEPING CERTAIN ENTERTAINMENT COMPANIES GOING. I REALLY EXPECT MORE QUOTA RETURNS CALLS SOON AND HIGHER TICKET PRIES TO COMPENSATE FOR THIS MARKET CONSTANTLY SHOOTING ITSELF IN THE FOOT.