2009 Box Office Review - South Korea - Part 1

Posted by Ethan on Monday, May 24, 2010 in 2009 Global Box Office • Asia and Australia • (0) Comments • Permalink •

SUMMARY

A 4.8% climb to 156 million in box office admissions led the South Korean market up.  A record high KRW1 trillion in revenue was attributed to higher ticket prices rather than the increased admission count, however.  

Domestic films represented 49% of the market while admissions to foreign films dropped by 7% or 6 million tickets sold. 

Huge commercial projects like JK Youn’s disaster picture “Haeundae,” which earned 11.5 million admissions for CJ Entertainment on 712 screens and Showbox’s “Take Off,” which brought in 8.5 million admissions and topped the box office for four weeks, led the releases for the year. 

CJ’s release of American film “Transformers:  Revenge of the Fallen” ranked third and opened on 1200 screens.  Disaster film “2012” at 5.4 million admissions was fourth while Fox’s “Avatar” came in fifth with 5.1 million admissions.

Lotte Entertainment had three top ten finishers and brought out the number six ranking American film “Terminator Salvation,” which earned 4.5 million admissions.

Lotte’s also distributed domestic release “My Girlfriend Is An Agent” which earned 4.1 million admissions and Kang Hyung-chul’s  2008 holdover comedy “Scandal Makers” which tallied an additional 4 million admissions in 2009 for a total gross of 8.3 million admissions.

Showbox’s holdover “A Frozen Flower” earned 3.4 million admissions in ’09 for a total of 3.8 million tickets sold and “Running Turtle” collected 3.1 million admissions to round out the top ten.

Six of the top ten performing films were domestic productions.

Korean film exports dropped 32.9% from last year primarily as a consequence of declining European and North American sales.  The global recession and lower production levels of domestic films help to explain the decline.  Exports to Asia rose to 61.7% to comprise 72.4% of all film sales.

HISTORY

A broad-based slump that began in 2007 and continued in 2008 hit the Korean film industry when local production fell from a record high of 124 films to 113 in 2008.  The market share for local films did drop from 50.8% in 2007 (and over 60% in 2006) to only 42.1% in 2008. This marked the lowest level since 2002. Ongoing profitability problems caused by declining audience interest in local films put a stop to the growth trend, which saw annual production figures rising from 43 to 124 over the past decade. This development is also reflected in lower average production costs, which decreased from around KRW 2.8 billion between 2003 and 2005 to KRW 2.07 billion in 2008. 

Korean exhibitors Lotte Cinemas, Cinus and Megabox all raised ticket prices this year, in an almost industry-wide move that marks the first ticket price increases in eight years.  Ticket prices were raised by KRW1000 for each of the weekday and weekend prices to KRW8000 and KRW9000 respectively.  Of the major distributors, only CJ CGV and its affiliate Primus have not raised prices.

With DVD and other ancillary markets suffering, the local film industry is dependent on box office receipts for 80% of profits.

Digital Cinema Korea (DCK), a joint venture between Korean exhibitors CJ CGV and Lotte, helped to finance 70% of country’s 536 D-cinema installations.

The Korean Film Commission (KOFIC) was established in 1999 with the objective of adopting a more independent, Commission-based management style composed of nine individual film specialists to discuss Korean film promotion-related issues.

Next: An analysis of distribution, local product, and looking forward

Ellen Pittleman, http://hybridentus.com, is a veteran studio executive based in Los Angeles. Most recently, she served as SVP, International Co-Productions and Worldwide Acquisitions for Paramount Pictures. She also launched the DVD Premiere group there, with films including Jonathan Demme’s “Neil Young:  Heart of Gold” and the sequel to the $100MM+ “Save the Last Dance.”  Working from a marketing and distribution perspective, she consults on strategic planning, deal negotiation, acquisitions, film library valuation and feature development with clients from Rio to London to Beijing.  She’s also currently developing a feature on George Foreman’s comeback years, among other projects.