Korean Movie Industries: A Behemoth Monopoly In Its Core?

1

Korean Movie Industry:

A Behemoth Monopoly in Its Core?i

Suray Agung Nugroho

Introduction

At the time when Hollywood‘s supremacy seems to dominate the world of entertainment

in many countries, for the past decade, Korea has shown to the world that it has comparatively

been able to stand against the Hollywood‘s prowess. This so-called Korean movies‘ ―renaissance‖

has been going on since the past decade. The fact that Korean movies have dominated the weekly

box office chart is an achievement in itself. The question that many have asked is how Korea

managed to achieve success in its domestic market.

The 2000‘s or the first decade of the 21st century marks the new era for Korean movies in

the sense that Korean movies‘ creativity and genres are not dictated or confined by the

government. Many critics state that the contemporary Korean movie industry is comparable to

that of Hollywood in the sense that private movie producing companies have sprung up to tap the

market demand. Group of both investor and distributors have been dominated by big companies

such as Showbox, CJ Entertaiment, and Lotte Entertainment—which occupied 86.7% of total

screens in Korea. They fully fund, produce, distribute, and screen the movies. The main processes

of movie industry are in their hands and naturally many may regard this as a monopoly in the

movie industry.

In fact screen monopoly—as the term is commonly called—seems to be a general

phenomenon in Korean movie industry. This kind of monopoly exists when powerful film

distributors take control of the box office by distributing or screening the same movies at the same

time in more than 50% of the whole screens in the country. In Korea‘s case, A Werewolf Boy (늑대

소녀-2012) and Gwansang (관상-2013)—both produced by big company ‗Show Box‘; for instance,

occupied more than half of the screenings in their premiere at the same time. The first movie (A

Werewolf Boy) was screened at 854 screens across the nation. As of August 2013, there were

2,454 screens in Korea and during its premiere on September 11, 2013 Gwansang was screened at

1239 screens. Meanwhile, almost at the same time, a movie produced by a small company

(Jeonwonsa Film Co.) titled 우리 선희 was only screened at 42 screens in its premiere on

September 12, 2013.

A ―Werewolf Boy‘ prompted the issue of screen monopoly in Korea when an

internationally acclaimed movie by director Kim Ki-duk‘s ―Pieta‖ was only screened at 58

theaters. The same concern applies also to 우리 선희. This leads to precedence that independent

movies would never get more chances to be screened in wide release due to the policies of

multiplex theater chains. Based on the data of multiplex screening of independent movies, in 2009

this type of movie occupied around 10% of multiplex screenings, but in 2012 the number dropped

to as low as 1%. As the number of screenings decreases, so did the number of viewers and its

revenues.

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Despite the fact that the current hit makers help Korean movie industry to be one of the

strongest in the world, some may argue that it may lead to diminish the competitiveness of Korean

movie industry.

In the superficial level, people can easily see the claws of cinema chains like CGV and

Lotte Cinema; the first being a company under CJ and the latter obviously under Lotte. Even the

import of foreign movies is also one of their main businesses. In short, in term of Korean movies,

they make and distribute them through their own companies which happen to be the major chains

in the current situation of Korean movie. As previously cited, although independent movie makers

and producers do exist in Korea, their prowess has relatively become incomparable to the

behemoth influence that the aforementioned conglomerates possess.

Should this situation persist, the next question is to see as to whether this scheme is

healthy for the sustainable growth of Korean movie industry. The concerns came into surface

simply because what is currently happening in Korea is nothing more but a different type of

monopoly practice in the hands of capital-strong conglomerates that control the producing,

distributing, and the screening of movies.

This is what prompted me to ask further questions. Is the current system an ideal system

for Korean movie industry? Will Korean movie goers see their own movies all the time? What

will be able to support and maintain their ‗loyalties‘ to keep on seeing their own movies? Is it the

sense of nationalism that drove them to see Korean movies? Has it always been so? Or is the trend

in Korea merely what people call as ‗herd behavior‘ where a flock of people easily follow along

what others do in this case if others see a particular movie, others would simply tag along and

watch it? Is this enough to explain what happen in Korea?

All of these questions will always be important to see what comes up in the long run. But,

in the meantime, should the problem of monopoly issue currently practiced by the conglomerates

inside the Korean movie industry is not adequately addressed with, Korean movie industry may

need to worry about its sustainability. If US (Hollywood) movies with its ‗studio-system‘ proves

to be working, will Korean movie industry will prove the same, although currently it seems to be

so?

Some may argue what is wrong with monopoly if it suits national interest. To some extent,

Hollywood still practices it. Some also may argue that at the moment, irrespective of the different

span of time, Korea still needs this kind of practice for the sake of, once again, national interest.

Although Korean government since Kim Dae Jung administration began to apply ‗support without

control‘ policy towards Korean movie industry, the fact that conglomerates (as seen in the cases of

CGV and Lotte Cinema) still dominate some aspects of Korean movie industry is something that

needs to be addressed with.

Based on this preliminary introduction, this paper attempts to elaborate 4 aspects worth-

noting about when it comes to reviewing the Korean movie industries both commercial and

independent ones. The 4 aspects which will be divided into 4 chapters will portray the current

situation of Korean movie industry as well as to judge as to whether Korean movie industry‘s

success in its domestic market is heavily or partly due to monopoly. In doing so, figures in terms

of the number of movie productions, the number of movie goers, and other facts worth-knowing

about are used to depict as to whether these combined factors are adequately feasible to depict the

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success as well as the claim that the paper attempts to prove: monopoly in Korean movies in its

domestic market. Apart from that, the figures are also to be used to shed some new lights on the

impending problems that may arise and thus obstruct the sustainability of Korean movie industry.

In doing so, the paper will be divided into 5 chapters.

In chapter 1, we will examine Korean movies‘ prowess against foreign movies. Chapter 2,

we will highlight the trend of commercial and independent movies during 2004-2012. Chapter 3:

Independent Movies vis a vis Commercial Movies. Chapter 4: The Dynamism of Korean movies

(both commercial and independent) by emphasizing on their respective penetration share, and

chapter 5: conclusion and shortcomings.

Before continuing, please note that most of the data on Korean movies used in this

research is based on data gained from KOFIC (Korea Film Council) site (www.kobis.or.kr). As for

the data of US movie industry, the data is based on data compiled in www.boxofficemojo.com.

Apart from that, although this paper attempts to portray the decade-long portrayal of Korean

movie industry, the data being used covers only the span of 2004-2012, excluding the on-going

data of the year 2013.

Chapter 1: Korean Movies’ Prowess against Foreign Movies

<table 1> is an overall picture of Korean movie industry in the span of nine years (2004

~ 2012) in the midst of foreign movies (mostly Hollywood) influx to the country. As the table

indicates, in term of revenues as well as the swelling numbers of Korean movie viewers, Korean

movie industry can be easily deemed as experiencing a success for the past nine years. The

number of movies being produced annually keeps on increasing and exceeding 100 movies per

year starting from 2006. At the same span of time, the number of imported foreign movies (mostly

Hollywood) is double than that of Korea‘s. Despite the fact that the number of imported films

outpaced the number of domestic ones, Korean films generate more revenue than its counterpart

(Hollywood). For the past nine years, Korean movies generate about 500 billion Won annually

from movie screening, beating the amount of revenue gained from foreign movies.

More striking is the fact that the market share of Korean movies is higher than that of the

foreign one for the past ten years. On an annual basis, the average market share of Korean movies

is 53.4 percent as opposed to foreign movies which occupies only 46.6 percent. The number

indicates the relatively stronger Korean movie market.

Table 1 <Korean Movies Vs Foreign Movies (2004 – 2012)> Year Korean Movies Foreign (Hollywood Movies & others)

Number

of

movies

Number of

Screenings

Revenues Number of

Viewers

Market Share Number

of

Movies

Number

of

Screening

s

Revenues Number of

Viewers

Market

Share

2012 175 383 836,114,875,004 114,613,190 58.8% 456 835 619,025,479,431 80,277,397 41.2%

2011 150 331 613,722,968,100 82,868,189 51.9% 289 602 622,076,496,100 76,856,276 48.1%

2010 142 274 508,426,689,450 68,843,175 46.6% 287 516 648,828,048,800 78,916,039 53.4%

2009 119 211 526,482,459,500 75,644,847 48.7% 243 500 556,713,545,450 79,753,807 51.3%

2008 110 252 407,327,224,301 62,047,324 42.1% 270 546 554,126,072,950 85,381,315 57.9%

2007 111 183 479,858,559,900 75,791,003 49.9% 282 427 485,628,064,638 76,231,989 50.1%

4

2006 110 159 568,090,373,200 91,745,620 63.6% 242 322 324,351,764,800 52,510,415 36.4%

2005 82 116 451,707,494,794 71,346,379 57.8% 225 299 328,657,484,673 52,005,680 42.2%

2004 74 95 239,143,250,406 37,741,433 54.5% 207 205 201,585,655,800 31,513,193 45.5%

2012 175 383 836,114,875,004 114,613,190 58.8% 456 835 619,025,479,431 80,277,397 41.2%

Total 1,073 2,004 4,630,873,894,655 680,641,160 2,501 4,252 4,340,992,612,642 613,446,111

Source: http://www.kobis.or.kr/kobis/business/stat/them/findYearlyTotalList.do

However, the data above does not show what has prompted Korean people to flock to the

cinema and watch their own domestic movies for the past ten years. This will be a focus of further

research. One thing for sure is the fact that Korean government and Korean people seem to be

always in the forefront of excitement when it comes to citing about these numbers. To some extent,

it is natural to see the economic achievement in term of the number of viewers and the amount of

revenues or the percentage of the market share, but will it be sustainable? As the data indicates,

the past decade has proven to portray the prowess of Korean cinema against the dominance of

foreign movies, notably Hollywood movies.

Chapter 2: The Trend of Korean Commercial & Independent Movies

from 2004 ~ 2012

a) Korean Commercial Movies Trend from 2004 ~ 2012

It is a known fact that Korean commercial movies have been regarded as the vanguard of

Korean movie industries thanks to their economic value in term of revenues and thanks to their

prowess to attract millions number of viewers. Based on <table 2> it is known that Korean

commercial numbers keep on increasing in the number of movies produced, total viewers, and of

course, the revenues they gained. While the number of movies did not reach a hundred in 2004

and 2005, since 2006 it kept on increasing along with the number of viewers. One thing that

should be noted is that the number of movies shown in the table in each year does not necessarily

indicate the movies produced on that particular year, rather it shows the number of movie released

during one particular year. Thus, the increasing number does not only indicate the increasing

number of production, but it also indicates the demand for releases of previous year‘s movies in

that particular year. That is the reason as to why the number keeps on increasing as shown on

<table 2>

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Table 2 <Korean Commercial Movies (2004 – 2012)>

Source: Data is compiled based on the yearly data of box office movies in Korea for commercial

and non-commercial movie-http://www.kobis.or.kr )

Apart from that, one thing that should be noted is the fact that despite the increasing

numbers, the increasing number of released movies does not always correlate with the increase of

revenue as in the case of the year 2008. Overall, with the total 2425 of released commercial

movies during that span of time, Korean movies have attracted the total number of more than 659

million viewers with total revenue of a little over 4 trillion Won.

b) Korean Independent Movies Trend from 2004 ~ 2012

For the past 9 years, in the midst of Korean commercial movies success, it is worth to look

into how Korean independent movies have evolved and developed. From 2004 up to 2007, the

numbers are still under 100 in a year, however starting from 2008 the number doubled and kept on

increasing since then. All in all the total of independent movies reached 1116 movies with the total

viewers of more than 21 million during a decade. In term of revenues they generate, these

noncommercial movies gain 145 billion Won. However when the situation is viewed from the

number of screens where this kind of movie is released, the number shows a disheartening fact.

The number does not indicate a trend of increase, rather it fluctuates. Even the number of viewers

also fluctuated. The number of viewers shows a sign of decrease. Even the number of screens is

also decreasing which, of course, entails the total revenues.

Year Number of

Commercial

Movies

Total Viewers Total

Screens

Number of

Screenings

Total Revenue

2004 75 36,623,662 5226 572,701 231,908,267,406

2005 98 71,233,011 12,389 1,331,864 450,977,369,294

2006 140 91,134,138 19,164 1,750,260 564,303,471,900

2007 165 72,490,418 20,224 1,837,660 459,050,045,700

2008 354 59,281,705 18,293 1,545,967 388,806,104,301

2009 199 70,528,177 17,255 1,778,487 491,723,072,800

2010 236 64,934,476 19,117 1,814,245 481,062,215,700

2011 427 80,458,780 23,916 1,970,915 596,621,854,100

2012 731 113,060,825 30,830 2,482,777 825,284,593,997

TOTAL 2425 659,745,192 166,414 15,084,876 4,008,676,593,743

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Table 3 <Korean Independent Movies (2012-2012)>

Year Number of

Independent

Movies

Total Viewers Total Screens Number of

Screenings

Total Revenue

2004 19 1,117,771 511 33,200 7,234,983,000

2005 21 113,368 119 6,699 730,125,500

2006 25 611,482 561 27,153 3,786,901,300

2007 57 3,300,585 1553 111,100 20,808,514,200

2008 107 2,765,619 1631 108,419 18,521,120,000

2009 108 5,116,670 2231 182,635 34,759,386,700

2010 159 3,908,697 2727 179,994 27,364,464,750

2011 208 2,409,409 1890 106,259 17,101,114,000

2012 205 1,552,365 2329 80,637 10,830,281,007

TOTAL 909 20,895,966 13,552 836,096 141,136,890,457

Source: Data is compiled based on the yearly data of box office movies in Korea for commercial

and non-commercial movie-http://www.kobis.or.kr )

In general, based on <table 2> and <table 3> in which commercial and independent

movies are clearly portrayed through data, it is without a doubt that independent movies are

smaller in the number of releases, total viewers, total screens, and of course in their power to

generate revenues. Seen from the revenue, independent movies are surely dwarfed in size

since it only generated 141 billion while commercial ones generated over incomparable 5

trillion Won for a decade. The data also shows that the screens where movies are released also

contributed to the incomparable number. While commercial movies secured over 166,414

screens, the latter only secured a little over 13,000 screens. It still needs further elaboration as

to the reasons why they are different in numbers; what prompted this difference. However,

this number indicates just as that.

Chapter 3: Independent Movies Vis A Vis Commercial Movies (2004 ~ 2012)

To illustrate more clearly how Korean commercial and independent movies have shown a

striking contrast in term of its number of movies, total viewers, screens, screenings, and their

respective revenues, the following graphs would help us understand the trend of Korean

movies in its domestic market.

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<Graph 1>

The graph shows that both commercial and independent movies experienced ain increasing

trend during 2004 until 2012. As for commercial movies, the year 2008 experienced the surging

number of commercial movies although it later one experienced a decline until the following year.

On the other hand, the trend for independent movies have somewhat increasing at a low level with

around 200 movies at the most (2011-2012). On the other hand, despite the decrease in 2009,

commercial movies spiked its number and surpassing more than 800 movies in the 2012. Thus, it

can be seen that both commercial and independent movies experienced an increasing trend with

commercial ones being the one dominated the number of movies right until 2012.

<Graph 2>

In term of viewers, it is obvious to see that Koreans flocked to see commercial movies

more than independent ones. The trend indicates that for the past 9 years, the number of viewers

for independent movies seems to be little changed. On the other hand, a fluctuating number of

viewers for commercial movies can be seen from the <graph 2>. Although the number is well

above the independent ones, commercial movies experienced an increase up to 2006 which then

2004 2005 2006 2007 2008 2009 2010 2011 2012

Ind.Movies 19 21 25 57 107 108 159 208 205

Com. Movies 75 98 140 165 354 199 236 427 731

0

200

400

600

800

Number of Korea's Commercial & Independent Movies

(2004-2012)

2004 2005 2006 2007 2008 2009 2010 2011 2012

Independent Movies 1,117, 113,36 611,48 3,300, 2,765, 5,116, 3,908, 2,409, 1,552,

Commercial Movies 36,623 71,233 91,134 72,490 59,281 70,528 64,934 80,458 113,06

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

Total Viewers of Korea's Commercial & Independent Movies

(2004 - 2012) * in thousands

8

started to decrease right to the lowest point in 2008. It is worth to note that the number of movies

being screen in 2008 did increase, but the number of viewers decreased. However, the commercial

movies gained its momentum again and started to fluctuate again right until 2012. All in all,

despite its volative number of the viewers, commercial movies still surpassed the number of

independent citizens in Korea.

<Graph 3>

In term of the number of screens where movies are shown, commercial movies are sure to

dominate the theaters for the past nine years. It is safe to say that the number of screens for

independent movies is comparatively low compared to the commercial ones. Commercial movies

indeed enjoyed the privilege of being exposed to more number of screens. While the number of

screens for independent movies had been under 3,000 screens during the period, commercial

movies occupied more even reaching more than 30,000 screens. The fact as shown in <graph 3>

indicates how strikingly different the situation is.

<Graph 4>

2004 2005 2006 2007 2008 2009 2010 2011 2012

Com.Movies 5226 12,38 19,16 20,22 18,29 17,25 19,11 23,91 30,83

Ind.Movies 511 119 561 1553 1631 2231 2727 1890 2329

0

10000

20000

30000

40000

Number of Screens for Commercial & Independent Movies

(2004 - 2012)

2004 2005 2006 2007 2008 2009 2010 2011 2012

Com.Movies 572,7 1,331 1,750 1,837 1,545 1,778 1,814 1,970 2,482

Ind.Movies 33,20 6,699 27,15 111,1 108,4 182,6 179,9 106,2 80,63

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Number of Screenings for Commercial & Independent Movies

(2004 - 2012) * in thousands

9

The same grim situation applies to the number of screenings or the number that indicates

how many one movie is shown on a particular screen in one theater. The total number of

screenings for both commercial and independent movies in Korea as shown on <Graph 4> really

portrays how commercial movies got privilege of having been shown more times than

independent ones. Just by looking into the graph, one could easily conclude that commercial

movies experienced a surge in the number of screenings, with the exception of 2008 where it

decreased. All in all, as the trend indicates, theaters preferred screening commercial movies more

than doing the same thing to independent ones.

<Graph 5>

As for the revenues, <Graph 5> indicates that the commercial movies do prove their

prowess in attracting revenues. Simply by referring to the amount of commercial movies‘

revenues that surpassed 8 billion Won in 2012 while independent ones only dug around 10 million

Won, it is once again seem to be an expected condition thanks to the treatment or acceptance

towards independent movies. Once again, one thing that should be noted here is the fact that

revenues of commercial ones kept on increasing except the ones back in 2008.

All in all, commercial and independent movies have their own share of keeping the

audience or viewers attracted to see the movies. But, the data indicated that commercial movies

outpaced the independent ones. The question lies in the fact that it is not an easy task to provide

the reasons as to why those trends indicate the situation as shown from <Graph 2> until <Graph

5>. One thing for sure, commercial movies did outpace the independent ones for the past 9 years

since

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Chapter 4: The Dynamism of Korea’s Commercial and Independent Movies

It is without a doubt that as seen from chapter 1 and 2, Korean independent movies can be

described as a lackluster as compared to their counterpart: Korean commercial movies—which

can be described as blockbuster in its home country. To illustrate how commercial movies did

occupy and thus conquer the Korean movie industry, this chapter will illustrate this phenomenon

through two different proofs. The first proof, we will show penetration share of the top 5 movies

(both commercial and independent) in each year and how those only 5 movies give us preliminary

clues to what happened in the Korean movie industry from 2004 ~ 2012. The second proof, we

will show surprising facts about how great the imbalance of prowess between commercial and

independent movies is. In doing so, we observed how many movies (commercial and independent)

it needs to occupy the 50% penetration rate in Korean movie industry on a yearly basis from 2004

until 2012.

In addition to the above proofs, at the same time, we will highlight how Hollywood movie

industry‘s dynamism during the same period of time, especially in term of its revenue and what

the penetration share of Hollywood movies mean in comparison to the situation of Korean movie

industry. The reason behind the inclusion of Hollywood‘s movie industry is that, first and

foremost, Hollywood has been regarded as the pinnacle of world‘s leading movie industry. Thus,

looking into how Hollywood-does it, how-Hollywood-is-doing is something worth-pondering

about to see how Korean movie industry as compared to its counterpart: Hollywood.

Through the following two proofs, we would like to point out that Korean independent

movies indeed undergo a serious problem in competing in the movie industry. Since movies have

been considered as one of the influentially important cultural products in the eyes of movie goers

or society in a whole, the lack of independent movie viewers mean only one thing: that there may

be something wrong with the movie or that the movies are not interesting enough for people to

watch or other reasons not yet covered in this research.

On the other hand, commercial movies, dubbed as the catalyst for Korean movies‘

renaissance, turned out to be ‗superficially‘ powerful in the sense that only a handful of them

‗conquered‘ half of the annual penetration. These two proofs are used to showcase that Korean

commercial movies, to some degree, conquer if not monopolizing the realm of Korean movie

industry during the span of 2004 ~ 2012.

4.1. Penetration Share of Top 5 (Commercial & Independent) Korean Movies

as opposed to those of Hollywood’s

4.1.1. Top 5 Korean Commercial Movies

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<Graph 6>

The Annual Penetration Share of Top 5 Commercial Movies Revenues (2004 -2012)

We observed the best 5 movies on an annual basis as an attempt to portray as to whether

Korean commercial movies did conquer most of movie industry in Korea during the span of time

researched upon. As the table indicates, the 5 movies did not occupy not even half of the whole

movie revenues in each respective year. Considering the fact that the number of movies produced

exceeded 100 movies (except in 2004 & 2005), 5 (five) movies occupying more than 40% of the

whole revenues (as in the case of the year 2008 & 2009) seem to be an adequate proof that

commercial movies did ‗conquer‘ movie market in Korea. However, since it did not reach not

even half or 50% of the whole revenues, it is still inadequate to conclude that commercial movies

played tough in conquering the market. What about independent movies, then?

4.1.2. Top 5 Korean Independent Movies

<Graph 7>

Annual Penetration Share of Top 5 Korean Independent Movie Revenues (2004 ~ 2012)

0%

10%

20%

30%

40%

50%

2004 2005 2006 2007 2008 2009 2010 2011 2012

26% 30% 38% 32% 41% 43% 34% 37% 36%

Annual Penetr

ation

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007 2008 2009 2010 2011 2012

84% 92% 87% 93% 95% 88% 72% 85% 76%

Annual P

erc

enta

ge

12

0%

5%

10%

15%

20%

2004 2005 2006 2007 2008 2009 2010 2011 2012

19% 16% 15% 16% 17% 19% 16% 15% 19%

Annual Penetr

ation S

hare

Different from commercial movies, if we look at 5 independent movies on annual basis,

we get a striking data portraying the fact that 5 independent movies in the whole year occupy the

whole revenues of all independent movies produced in that particular year. Take the year 2008; for

instance, out of 107 independent movies produced on that particular year, 5 (five) of them

occupied 95% of the revenues in the whole year. Surprisingly, data on other years also indicates

similar tendency. What does this tell us? This simply asserts the fact that not many people see

independent movies apart from those 5. In term of revenues, those five movies gain most of the

profits from the screenings. And this means that the remaining movies are simply watched by a

very few number of people or worse, no one see them which might have led to the loss of profit

for other movies.

4.1.3. Top 5 Hollywood Commercial Movies

As previously explained in the opening section of this chapter, Hollywood‘s commercial

movies are taken into account in the same manner for the sake of comparison.

<Graph 8>

The Annual Penetration Share of Top 5 US Commercial Movies Revenues (2004 -2012)

Hollywood, on the other hand, shows a different kind of spectrum. As <Graph 8>

indicates, the total 5 movies do not necessarily conquer or occupy half of the annual revenue. In

fact, it is far from that. This data simply shows that Hollywood movies are relatively fairly

distributed. Those movies are not the main movies watched by Americans since there are also

other movies that they watched during the whole year. In other words, although Hollywood

produces numerous blockbusters in a whole year, those blockbuster movies are not the ones that

gain revenues from the market. Revenues are relatively evenly shared with other movies produced

in those years.

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4.2. The Imbalance of Prowess between Korean Commercial and Independent Movies

As previously indicated, this subchapter will highlights proofs that Korean commercial

movies do show a relatively stronger prowess in terms of penetration share in the market. To

support this, we observe how many movies it needs in one particular year to reach penetration

share of 50% or more. Thus, data on the number of movies produced in each year as compared to

data on the number of movies that make up 50% share will clearly give a portrayal of how strong

those (50%-movies) are, in terms of its revenues (or the size of viewers indirectly).

4.2.1. Korean Commercial Movies

Table 4< Korean Commercial Movies (2004 ~ 2012)

Year Total Movie

Production

(A)

Number of Movies

Needed to Reach

50% Penetration (B)

Revenues of (B)

in Won

Percentage

2004 75 12 115,933,166,000 50%

2005 98 11 230,288,269,505 51%

2006 140 9 281,858,156,100 50%

2007 165 12 239,408,761,300 52%

2008 354 7 200,971,870,100 52%

2009 199 7 253,349,839,800 52%

2010 236 9 247,835,878,600 52%

2011 427 9 304,192,394,000 51%

2012 731 9 427,060,341,594 52%

Based on <Table 4>, it is obvious to see that around 10 commercial movies conquered 50%

share for the whole year. Needless to say, the data actually shows the top ten Korean movies on a

yearly basis. Top 10 movies of commercial movies occupied 50% of market share for the whole

year which entail the profits gained from them as well. Take the year 2012; for instance, with the

number of movies produced and being screened staggeringly stood at the number of 731 movies,

the fact that 9 movies alone ‗successfully‘ occupied 52% of market share for the whole year does

indicate the following possibilities. First, most of Korean movie goers watched those 9 movies.

Second, revenues of those movies outnumbered the revenues gained and shared by the remaining

722 other movies for the whole year. Seen from different perspective, even among commercial

movies themselves, there is a stiff competition in attracting viewers.

For additional information and for illustrating the 2012‘s Korean commercial movie

industry, here are the titles of the movies along with their revenues and other information.

Tabel 5 <Korean Movies‘ Box Office of 2012>

No. Title Release

Date Revenues Penetration Number of viewers

1 도둑들 2012-07-25 93,664,808,500 11.3% 12,983,178

2 광해, 왕이 된 남자 2012-09-13 88,899,448,769 10.8% 12,319,390

3 늑대소년 2012-10-31 46,590,107,000 5.6% 6,654,390

4 바람과 함께 사라지다 2012-08-08 34,614,661,161 4.2% 4,909,937

5 범죄와의 전쟁: 2012-02-02 36,538,823,500 4.4% 4,719,872

6 내 아내의 모든 것 2012-05-17 34,223,620,500 4.1% 4,598,821

14

7 연가시 2012-07-05 32,175,400,664 3.9% 4,515,833

8 건축학개론 2012-03-22 30,222,696,000 3.7% 4,111,068

9 댄싱퀸 2012-01-18 30,130,775,500 3.7% 4,058,225

427,060,341,594 51.7% 58,870,714

Source: www.kobis.or.kr (yearly box office)

4.2.2. Korean Independent Movies

Table 6<Korean Independent Movies (2004 ~ 2012)>

Year Total Movie

Production

(A)

Number of Movies

Needed to Reach

50% Penetration (B)

Revenues of (B)

in Won

Percentage

2004 19 2 4,299,634,000 59%

2005 21 2 534,940,000 73%

2006 25 2 2,231,646,700 59%

2007 57 1 10,266,199,000 49%

2008 107 1 8,967,253,000 48%

2009 108 1 19,074,728,900 55%

2010 159 3 16,673,794,000 61%

2011 208 1 12,041,827,000 70%

2012 205 2 6,714,070,101 62%

As seen from <Table 6> a striking fact emerges about Korean independent movies.

Completely different from commercial ones, it can be concluded that Korean independent movies

did suffer from the lack of viewers. In other words, not many Korean people see their own

independent movies. Only 1 or 2 independent movies are mostly watched by a ‗handful‘ of

Koreans (as compared to the viewers of commercial ones). The fact that only one or two movies

occupied more than 50% penetration share of the whole year does indicate the problem(s) in

Korean independent movies. Let us take a look into the year 2012 for instance, out of 205

independent movies produced, it took only 2 movies to occupy 62% of the whole year‘s revenues.

This simply shows how staggeringly imbalanced and unbelievable situation that Korean

independent movies is facing at the moment.

In order to give an illustrative image of how grim the situation is, <table 7> will highlight

the lack of viewers as well as the disproportionate number of viewers of independent movies.

Table 7 <Korean Independent Movies – 2012>

No. Title Release Date Revenues Penetration Number of viewers

1 피에타 2012-09-06 4,355,592,500 40.2% 603,283

2 남영동1985 2012-11-22 2,358,477,601 21.8% 332,597

3 철가방 우수氏 2012-11-22 601,513,500 5.6% 91,988

4 두 개의 문 2012-06-21 503,627,000 4.6% 73,447

5 두 번의 결혼식과 핚 번의 장례식 2012-06-21 380,658,144 3.5% 51,049

6 말하는 건축가 2012-03-08 309,042,700 2.9% 39,547

7 두레소리 2012-05-10 234,493,000 2.2% 35,326

8 다른나라에서 2012-05-31 237,292,700 2.2% 30,626

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9 개들의 전쟁 2012-11-22 171,004,571 1.6% 23,350

10 달팽이의 별 2012-03-22 134,331,800 1.2% 19,451

Source: www.kobis.or.kr (yearly box office)

Although Kim Ki-duk‘s Pieta was watched by a little more than 600 thousand viewers,

this number of viewers seems incomparable to the commercial movies titled Gwanghae which

was released on the same month in 2012—which attracted more than 12 million viewers. This

incident has been cited as one of the portrayals about how grave the situation faced by Korean

independent movies in term of attracting viewers. However, one thing that should be worth-

mentioning here is the number of screens that those two movies enjoyed. Based on the kofic

annual report of 2012Pieta was only screened in 362 theaters while Gwanghae was screened at

1,001 theaters. This is what has been dubbed and cited as the starting point to indicate that Korean

movie industry has been undergoing a monopoly in its screening system—with the privilege given

to commercial movies instead of independent ones.

In conjunction with this, although this research also initially attempts to portray the

conglomerates/distributors that produce commercial movies vis a vis independent movie makers

and how they compete in the industry, it seems that it does not need to do so. Instead, as indicated

by the numbers of revenues and the penetration share of both commercial and independent movies

shown on the tables and graphs as previously stated on this paper, it can be concluded that

commercial movies indeed outnumbered and outwon in the competitive market of Korean movie

industry.

4.2.3. Hollywood’s Movie Industry

Last but not least, to give a comparative understanding of how Korean movie industry

situation is as compared to the Hollywood, <table 8> portrays how penetration share of

US/Hollywood movie industry during the same span of time.

Table 8< US Commercial Movies (2004 ~ 2012)>

Year Total Movie

Production

(A)

Number of Movies

Needed to Reach

50% Penetration (B)

Revenues of (B)

in US $

Percentage

(around

50%)

2004 551 31 4,639,886,997 50%

2005 547 29 4,441,514,310 50%

2006 608 33 4,618,807,403 50%

2007 631 26 4,949,134,307 50%

2008 608 29 4,890,779,493 50%

2009 521 24 5,463,269,982 50%

2010 535 27 5,178,438,738 50%

2011 601 30 5,164,097,064 50%

2012 663 24 5,527,877,938 50%

Based on <Table 8>, it can be concluded that Hollywood movies, especially the

blockbuster ones, are widely distributed. On annual basis, there can be more than 25 movies that

occupy around 50% of the total revenues gained in one year. This data can be a comparative

medium to initiate and pave the way for Korean movie industry to keep on producing more

market-friendly(?) and viewer-generating movies the whole year around. One thing that lacks

about the data is that, we cannot compare Korean independent movies with those of US ones since

the writer has yet to find the data on this one.

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Chapter 5: Conclusion, Additional Remarks, & Shortcomings Despite the fact that commercial movies dominate the Korean movie industry, art film

and independent movies are indispensible reality of Korean movie industry. Based on the data

from Artplus Cinema Network that unites the independent movie theaters in Korea under one

management, it is reported that back in 2002 there were only two independent movie theaters and

by 2013 the number has increased into 21 places with 25 theaters across the country. However,

despite its existence, it remains to be seen how these theaters come face to face with the giant

player of multiplexes in Korea.

In order to understand the real condition how independent movies keep their existence in

the midst of commercial ones, one thing for sure, although the number of theaters increased for

the past decade, it is worth-pondering as the number of screens also dwindled. Interestingly, while

the number of independent movie screens dwindled, the number of screens in multiplex keeps on

increasing. This is the trend of multiplex that pose a threat to independent movies in Korea.

Based on the tables and graphs previously outlined in this paper, it is obvious that the

number of screenings for independent movies in Korea has been fluctuating from 2004 – 2012. So

was the number of viewers, in fact the data as outlined shows that the numbers of independent

movie viewers are still incomparably little compared to that of commercial movies. So was the

number of movies produced during the span of 2004- 2012. And one worth-mentioning finding of

this preliminary research is that first, independent movies undergo a very disturbing fact, i.e. only

one independent movie in each year can be dubbed as ‗successful‘ in term of revenues and the

number of viewers. Second, commercial movies being dubbed as the top ten in Korean

blockbusters occupied more than half of the total revenues in each year during the span of time

researched on (2004-2012). This surely indicates that Korean movie goers indeed see what others

see. As to whether this is true, it needs further research. With the so-called lackluster fact

experienced by independent movies as opposed to commercial ones that dot the mainstream

movie industry, to some degree, it can be said that commercial movies have outpaced and started

to push away the independent movies in Korea. Thus, at this point, this research has gained its

goal of portraying and proving that commercial and independent movies in Korea have been

competing with staggering prowess in the past decade (2004-2012).

However, the writer actually also attempts to prove that monopoly does exist in Korean

movie industry. However, with the limited time and the need for further research, there seem to be

some aspects untouched. They are the following research questions: What will be able to support

and maintain Korean people‘s ‗loyalties‘ to keep on seeing their own independent movies? On the

other hand, is it the sense of nationalism that drove Koreans to see their own (commercial) movies?

Or is the trend in Korea merely what people call as ‗herd behavior‘ where a flock of people easily

follow along what others do in this case if others see a particular movie, others would simply tag

along and watch it? Is this enough to explain what happens in Korea‘s movie industry?

Sites:

www.boxofficemojo.com

www.kobis.or.kr

i This paper is a class-project (Korean Economy Policy class) thanks to Prof. Bak Myeong-ho (박명호)

who has given me insight into how the issue is perceivable via data reading of Korean movies industry.

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i [email protected] (Korean Studies, Graduate School of International Area Studies, HUFS)