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Korean Movies' Success Here no Cause for Complacency

The new James Bond movie "Casino Royale" to be released on Dec. 21 is distributed here by Sony Pictures Releasing Buena Vista International. The mouthful of a company name was created by a Nov. 30 merger between the Korean operations of Sony and Buena Vista, which entered the domestic market in 1990 and 1993. The two say the merger deal aims to create "synergy", but the real reason was a need to restructure due to difficulties they face in the Korean market.

As the market share of foreign movies declines due to the popularity of Korean movies, Hollywood distributors here are scaling down or restructuring their business here. Overseas, by contrast, demand for Korean movies is falling dramatically after a peak last year. In short, Korean moviegoers don't watch foreign movies and foreigners no longer watch Korean films. As of the end of October this year, the theatre occupancy rate for foreign movies stood at 38 percent, according to the Korean Film Council, almost halved from 77 percent in 1996. By contrast, Korean movies have been posting more than 50 percent theatre occupancy rate since 2001, except for the 48 percent in 2002.

UIP Korea, whose arrival as the first Hollywood direct movie distributor to enter the domestic market in 1988 provoked protests among movie figures to the point where they released snakes in theaters, will be broken up into two entities. It is to let Paramount films be distributed by CJ Entertainment, Korea's largest movie distributor. 20th Century Fox Korea is to close its DVD distribution business next year.

But the poor performance of Hollywood movie distributors here does not necessarily lead to triumph for Korean movies. An increasing number of Korean movies are losing money due to a surge in the number of movies and sluggish overseas interest. The number of Korean movies stood at 87 last year and will set a fresh record this year with 87 already released between the beginning of this year and Oct. 31. It is to exceed 100. But less than 20 of them are likely to break even (last year it was 30 percent).

Exports of Korean movies, which surged over the last few years, declined dramatically this year. Export contracts plunged 58.3 percent to US$17.42 million (W16.1 million) in the first half of this year from $41.81 million a year ago. Export price per movie also plummeted to $136,088 from $273,268 last year. One reason is that many are mediocre and rely solely on the appeal of soap stars popular abroad because of the Korean Wave in Asia. Production costs, meanwhile, are spiraling. In Japan, for instance, exports stood at $30.98 million in the first half of 2005. But the figure nosedived 71 percent to $8.72 million in the first half of 2006.

The mega hit movie "The Host", which set a new record in the Korea movie history by attracting more than 13 million audiences here, came in seventh in the first week of its release in Japan in September and fell to 10th in the second week. Park Hyun-tae, CEO of Sovik Venture Capital which specializes in film investment, said, "If the Korean movie industry is content with the current high theater occupancy rate of domestic movies here, it'll prove all mouth and no trousers".

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