One of the main concerns in the film industry at present is the lack of investment. With admissions down approximately 45 percent compared to pre-pandemic levels, investors are looking elsewhere to seek returns on their investment.

The Shinhan Bank-Daesung Culture Contents fund that was valued at 7 billion won ($5 million) was closed according to reports in June illustrating the effects that the change in viewing habits has had on the industry. The fund backed by one of Korea’s leading lenders Shinhan Bank and Daesung Private Equity invested in titles that included the two-part film Alienoid (2022) that was a major box office disappointment with both films collectively accumulating just shy of 3 million admissions falling well short of their break-even points.

The lack of investment is being reflected in the slates of the major studios with CJ ENM only having two Korean films this year including Park Chan-wook’s No Other Choice (2025) that compares to more than a dozen in the mid-2010s. The news of the merger between Lotte Cultureworks and Megabox is also an illustration of the position the industry is in. Lotte’s film business includes Lotte Cinemas and Lotte Entertainment while Megabox also distributes and finances films through its distribution arm Plus M.

This comes as Netflix and the wider streaming sector has impacted the financing of films. Recent reports in the Korean media that Lee Chang-dong’s next film Possible Love (translated title) is a Netflix title further signifies how Korea’s studio system has fundamentally changed.  

Nonetheless, the industry is demonstrating that mid-sized budget films can generate revenue with seven out of the ten films breaking even last year budgeted at under 10 billion won. KOFIC also announced in January that it will allocate 10 billion won ($7 million) to films budgeted between 2 and 8 billion won ($1.4 million and $5.6 million).

This week, we will track the changes in financing and distributing in the Korean film industry starting with The Marriage Life (1992) that saw Korea’s conglomerates financing Korean films. It will then turn to The Gingko Bed (1996) and The Contact (1997) which were some of the first Korean films to secure financing from Venture capital. It will also cover Shiri (1999) that represented a shift towards blockbusters. It’ll then turn to films that have acquired financing from overseas before looking ahead.

The Marriage Life (1992) – First partly-funded Chaebol Feature

In the 1990s, Korea’s conglomerates would transform the financing of Korean films. Initially this was led by a first wave of chaebols (family-controlled conglomerates) consisting of some of Korea’s most recognizable brands like Samsung and Hyundai. They entered the film industry to capitalize on the growing market of video rentals that grew from 196 billion won in 1989 to 600 billion won in 1992. Having manufactured the VHS recorders there was a lack of content after US studios were setting up their own offices in Seoul. Samsung invested 150 million won in Kim Eui-suk’s The Marriage Life (1992) that accounted for 25% of the film’s budget in return for the Video rights. The film’s production company Ikyoung Films held the theatrical and TV rights.

The feature centers on a couple played by Choi Min-soo and Shim Hye-jin as we follow them as they get married, split up and come back together. It turned into the biggest hit of the year selling 520,000 tickets in Seoul. Its success meant that other Chaebols including Daewoo would also enter the industry. Samsung subsequently also fully financed films such as Yim Soon-rye’s feature debut Three Friends (1996). These companies would also build nationwide distribution operations that was significant because it laid the seeds for studios like CJ ENM, Lotte and Showbox that came later to do the same. Previously, Korea’s distribution market was broken into different regions. This system was challenged when UIP set up its own branch and distributed Fatal Attraction in 1988.

The Marriage Life was also notable for being a so-called planned film. With more investment coming into the industry there was a greater emphasis on planning. Shin Chul, one of the film’s producers, interviewed numerous married couples when planning the film helping it to perform strongly at the box office.

The Gingko Bed (1996) & The Contact (1997) – A Beginning of a New Era of Venture Capital in Korean Cinema   

Fans of Korean cinema will be familiar with the opening credits of Korean films that list those responsible for investment and the funds that have been used to finance the film, often from major lenders. Venture capital has been instrumental in financing Korean films over the last 25 years. Parasite, for example, secured financing from IBK Capital, Hana Financial Investment, KDB Capital among others.

In many respects this began with Kang Je-kyu’s The Gingko Bed (1996) that saw Ilshin Investment joining with Kookmin Venture Capital to invest in the film. The film was popular accruing 680,000 admissions and Ilshin were rewarded with a 81.78% return on their investment (Hung-Chul Choi). 

Ilshin also made a profit on Chang Yoon-hyun’s melodrama The Contact starring Han Suk-kyu and Jeon Do-yeon about a relationship between a radio DJ and home shopping telemarketer. It accumulated over 600,000 admissions becoming the second most successful film of the year.

In 1998, Mirae Audovisual Venture 1 launched Korea’s first audio-visual investment fund that raised capital for film investment, while the Korean Film Council (KOFIC) worked with the Small and Medium Business Administration in allocating public funds and attracting public investment (Kim Mee hyun). With the government supporting venture investment in the late 1990s, it was becoming easier for films to raise financing.  By 2004, 31.5% of film production was financed by the distributors, 29% from investment funds, while the remaining investment came from other investors and production companies (Kim Mee hyun).

 Shiri (1999) - Samsung’s Exit Leaves Lasting Legacy

One of Samsung’s final productions would become its most influential changing the industry forever. Directed by Kang Je-gyu, Shiri was Korea’s first successful blockbuster that was described by the local press at the time “as the small fish that sunk Titanic.” The film’s title refers to a small fish that was symbolic in the film as it’s found in waters that surround the Korean peninsula. Shiri that sees two South Korean agents come up against North Korean terrorists famously outperformed Titanic in Korea selling 6.9 million tickets.

With its budget of 3 billion won, A-list stars led by Han Suk-kyu and its explosive spectacle it demonstrated it could beat Hollywood at its own game. While it was a gamble for Samsung, it is significant that the film also secured financing from Korea Technology Finance Corporation, a Non-profit government-affiliated institution. It assists SMEs with access to credit, equity funding, while also providing other services. Its involvement in Shiri underscores the link between private funding and government support in the rise of the Korean film industry.

Samsung would ultimately depart the industry along with the other Chaebols that entered in the early 1990s owing to the IMF crisis as they sought to focus on their core tech and manufacturing sectors.  But this created an opportunity for what would become Korea’s leading studios: CJ ENM, Lotte Entertainment and Showbox. They built multiplexes and emulated the blockbuster formula that proved so successful with Shiri through a string of hits including JSA (2000), The Host (2006), Roaring Currents (2014) and Along with the Gods (2017). Financed by the studios and venture capital these films would help drive the industry in both the 2000s and 2010s.

US Financing

With Netflix becoming a leading player in Korea’s content industry along with Disney, an increasing amount of the financing is coming from the US. Hollywood financing is not new with titles like The Phone (2002) being produced and distributed by Disney’s Buena Vista as early as 2002. Fox that is now owned by Disney also co-financed The Yellow Sea (2010) and fully funded The Wailing (2016) among other titles. Warner Bros. Korea financed several films including Kim Jee-woon’s The Age of Shadows (2016) that came a year before Bong Joon Ho’s Okja (2017) that would reflect Netflix’s ambitions for the Korean market. Between 2019 and 2023 Netflix had 20 “original” films that it had either financed or later acquired, and a whopping 45 series.  In 2023 alone, Disney was behind 13 series and between 2022 and 2024 it has produced more than 30 series through its Star Hub.

Korea’s market, therefore, is beginning to imitate what has happened in the UK industry that has thrived not in opposition to Hollywood but in collaborating with the studios primarily through financing. One of the striking differences between Korea and the UK is that the latter was never able to produce its own studios that could finance and distribute their own content. While Korea has established its own studio system, it’s now having to evolve significantly with the influx of American financing.

Other Korean studios like NEW are also working with US companies. It distributed Okja in Korea and its disaster film Pandora (2016) was the first Korean title to be pre-sold to Netflix. It has also collaborated with Library Pictures after it was announced that the LA-based company would co-finance films with NEW in 2021. One of their first collaborations was Jo Eun-ji’s Perhaps Love (2021).

KOFIC Funding

KOFIC and the government have provided funding for both commercial and independent features. A so-called Mother or Motae Fund was established in 2006 that has provided more than $400 million in investment. For 2025, it was increased to 35 billion won ($25.4 million). It’s a fund that involves government funding and private capital that is regulated by both KOFIC and the government. This fund, however, is not available to features produced by the major studios leading to calls from within the industry to ease the restrictions.

KOFIC also has provided other financing including its Project Development Support program. Its budget was increased to 2.5 billion won this year ($1.7 million) and will support 141 projects, an increase from 85 in 2024.

Given the success of lower budget films with blockbusters now regularly underperforming, KOFIC as stated above is also supporting such films. In June, KOFIC announced the nine titles that will receive the funding that includes new work from a number of established directors.

The projects are as follows: Chung Ji-young’s My Name is (production support of 890 million won), Byun Young-joo’s Your Target (1.5 billion won), Jang Hoon’s Mongyudowondo (1.5 billion won), Heo In-moo’s Home Cooking (600 million won), Kim yong-gyun’s Yongsu-cheol (1 billion won), Park Dae-min’s Island of Dogs (1 billion won), Kim Sun-kyung’s Andong (1.2 billion won), Kwon Oh-kwang’s Six College Liars (1 billion won) and Kim Jeong-gu’s Taste of Prison (1.24 billion won).

This would mark the return of several filmmakers including Byun Young-joo and Jang Hoon to the silver screen. Byun’s last film was in 2012 with Helpless while for Jang Hoon, his most recent feature was A Taxi Driver in 2017.

A total of 120 films applied for funding and the projects were chosen by a jury through preliminary and final rounds. The chairman of the jury, Oh Gi-hwan said the nine films “have enough potential to achieve meaningful results,” and that “Korean films are in a difficult situation, but I believe that there is definitely a solution within it. I am confident that this project will be one of those solutions.”

Written by Jason Bechervaise

Edited by kofic   

Sources: Kim Mee Hyun, Trends in the Structure of the Korean Film Industry (KOFIC)

             Hyung-Chul Choi, Venture Capital in Korea Case Study of Ilshin Investment Co. Ltd, KDI.