[Korean Film News] Korean Films Saw More Screens, Less Profits In 2006

According to data released by the Korean Film Council regarding last year’s domestic film market, ticket sales and the number of movies and screens increased, but the industry saw profitability and exports decline. Released on January 18, the data shows that in 2006 the number of people going to the movies reached 163.85 million, up 12.5 percent a year earlier. Hypothetically, that represents 3.34 movie tickets sold to every man, woman, and child in South Korea. The corresponding number for 2004 was 2.8, increasing to 3.0 the following year. In time, this figure is expected to approach the numbers between 4.0 and 5.0 seen in Australia or the level between 5.0 and 6.0 in the U.S. The market share of domestically made movies also rose to an all-time high of 64.2 percent, while movie screens nationwide numbered 1,847, up by 200 from the previous year. This year, the number of screens is expected to exceed 2,000 for the first time.

But behind these increased figures, South Korean movies suffered a decrease in profitability. Last year, the average production cost for a movie amounted to 4.02 billion won (US$4.3 million), almost the same level as in 2005. However, filmmakers had to spend more on marketing, with promotional costs accounting for 35.8 percent of total expenditures. This increase in marketing spending eroded profitability. To break even, a movie had to attract roughly more than 1.3 million viewers last year. Last year, only 22 out of 108 Korean films reached this point, meaning about four out of five suffered a loss.

Most markedly, South Korean movies saw a decrease in exports to the Japanese market. Last year, Japan-bound Korean film imports plunged by 68 percent from a year earlier, the first drop since 2001. Annual exports amounted to US$245.1 billion, but those shipped to Asian markets, including Japan, China, and Hong Kong, all declined.

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[Source: The Hankyoreh]