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Summary of Status & Insight: Korean Film Industry 2013

Jul 10, 2014
  • Writerby Research & Development Dept.
  • View5851
The Trimmed Report
 
 
The Korean film industry saw its highest level of growth during 2013. With KRW 1.88 trillion in overall revenue, there were increases in admissions, ticket sales, ancillary markets and exports, putting the Korean film industry into its second golden era.  
 
<Table1> Key Statistics of Korean Film Industry, 2004-2013
Year
 
2004
 
2005
 
2006
 
2007
 
2008
 
2009
 
2010
 
2011
 
2012
 
2013
 
Admissions
 
(10 thousand)
 
 
Total Admissions
 
13,517
 
14,552
 
15,341
 
15,878
 
15,083
 
15,696
 
14,918
 
15,972
 
19,489
 
21,332
 
% Change
 
-
 
7.7%
 
5.4%
 
3.5%
 
-5.0%
 
4.1%
 
-5.0%
 
7.1%
 
22.0%
 
9.5%
 
Korean
 
Film
 
8,019
 
8,544
 
9,791
 
7,939
 
6,355
 
7,641
 
6,940
 
8,287
 
11,461
 
12,727
 
% change
 
-
 
6.5%
 
14.6%
 
-18.9%
 
-20.0%
 
20.2%
 
-9.2%
 
19.4%
 
38.3%
 
11.0%
 
Market Share
 
59.3%
 
58.7%
 
63.8%
 
50.0%
 
42.1%
 
48.7%
 
46.5%
 
51.9%
 
58.8%
 
59.7%
 
International Film
 
5,498
 
6,008
 
5,550
 
7,939
 
8,728
 
8,055
 
7,978
 
7,685
 
8,028
 
8,605
 
% change
 
-
 
9.3%
 
-7.6%
 
43.0%
 
9.9%
 
-7.7%
 
-1.0%
 
-3.7%
 
4.5%
 
7.2%
 
Market Share
 
40.7%
 
41.3%
 
36.2%
 
50.0%
 
57.9%
 
51.3%
 
53.5%
 
48.1%
 
41.2%
 
40.3%
 
No. of Films released
 
Korean Film
 
74
 
83
 
108
 
112
 
108
 
118
 
140
 
150
 
175
 
183
 
International Film
 
194
 
215
 
237
 
281
 
272
 
243
 
286
 
289
 
456
 
722
 
No. of Screens
 
Nationwide
 
1,451
 
1,648
 
1,880
 
1,975
 
2,004
 
2,055
 
2,003
 
1,974
 
2,081
 
2,184
 
Admissions per capita
 
2.78
 
2.98
 
3.13
 
3.22
 
3.04
 
3.15
 
2.92
 
3.15
 
3.83
 
4.25
 
Return on Investment on
 
Korean Film
 
3.1%
 
7.9%
 
-24.5%
 
-40.5%
 
-43.5%
 
-13.1%
 
-11.0%
 
-14.7%
 
13.3%
 
15.2%
 
Film Industry Revenue
 
(100 mil)
 
Ticket Sales
 
8,498
 
8,981
 
9,257
 
9,918
 
9,794
 
10,941
 
11,684
 
12,358
 
14,551
 
15,512
 
Ancillary Market Sales
 
6,536
 
5,433
 
3,900
 
2,750
 
2,224
 
888
 
1,109
 
1,709
 
2,158
 
2,676
 
Overseas Export
 
(100 mil KRW)
 
638
 
832
 
268
 
267
 
230
 
155
 
462
 
382
 
414
 
651
 
(10 thou USD)*
 
5,828
 
7,599
 
2,451
 
2,440
 
2,104
 
1,412
 
4,222
 
3,487
 
3,782
 
5,946
 
Total
 
15,672
 
15,246
 
13,425
 
12,935
 
12,248
 
11,984
 
13,255
 
14,449
 
17,123
 
18,839
 
 
Admissions
 
With a total of 905 films released in theatres, the average film admissions per capita reached 4.25, the 2nd highest ration in the world according to Screen Digest. Total admissions hit 213.4 million, a 9.5% increase from the year before.
 
Korean films were dominant at the box office, taking nine spots in the top ten list. The admissions share of Korean films was 59.9%, while the US grabbed 35.5% and other countries only 4.6%. Out of the other countries, UK’s <About Time> had the greatest success, attracting 2.86 million viewers.
 
 
<Table 2> Box office results for the Top 10 films released in Korea, 2013
Rank
 
Title
 
Release date
 
Rating
 
Country of Origin
 
No. of Screens Nationwide
 
Sales revenue Nationwide
 
Admissions Nationwide
 
Distributor
 
1
 
Miracle in Cell No.7
 
2013-01-23
 
15+
 
Korea
 
787
 
91,429,295,670
 
12,810,776
 
Next Entertainment World, Inc.(NEW)
 
2
 
Snowpiercer
 
2013-08-01
 
15+
 
Korea
 
1,128
 
66,951,128,500
 
9,341,747
 
CJ E&M Corp.
 
3
 
The Face Reader
 
2013-09-11
 
15+
 
Korea
 
1,190
 
66,004,775,500
 
9,134,463
 
Showbox/Mediaplex, Inc.
 
4
 
Iron Man 3
 
2013-04-25
 
12+
 
US
 
1,381
 
70,806,191,000
 
9,001,309
 
Sony Pictures Releasing Walt Disney Studio Korea, Inc.
 
5
 
The Berlin File
 
2013-01-30
 
15+
 
Korea
 
894
 
52,354,771,637
 
7,166,177
 
CJ E&M Corp.
 
6
 
Secretly Greatly*
 
2013-06-05
 
15+
 
Korea
 
1,341
 
48,735,214,913
 
6,963,821
 
Showbox/Mediaplex, Inc.
 
7
 
The Attorney
 
2013-12-18
 
15+
 
Korea
 
923
 
40,952,697,500
 
5,686,919
 
Next Entertainment World, Inc.(NEW)
 
8
 
Hide and Seek
 
2013-08-14
 
15+
 
Korea
 
779
 
39,602,987,500
 
5,604,104
 
Next Entertainment World, Inc.(NEW)
 
9
 
The Terror, LIVE
 
2013-07-31
 
15+
 
Korea
 
743
 
39,834,696,881
 
5,579,125
 
Lotte shopping Lotte Entertainment Co.,Ltd
 
10
 
Cold Eyes
 
2013-07-03
 
15+
 
Korea
 
949
 
39,371,354,179
 
5,506,770
 
Next Entertainment World, Inc.(NEW)
 
 
Film admissions grew in Korea for several reasons. Multiplexes began to expand, creating an audience-friendly environment, along with new price policies that provided different promotions and specials which led to the drop in average ticket prices, attracting filmgoers. Multiplexes continue to take over and grow, while local theaters are shutting down or being absorbed into these multiplexes. More than 90% of viewers chose to watch movies at multiplexes.
 
Although admissions grew by 9.5%, admissions, 3D films entries dropped. It seems that Korean audiences only chose to see films in 3D for particular standards, and if the film didn’t encompass a technologically advanced element, they did not choose 3D.
 
 
Rating
 
Out of Korean films that were released, 78.7% of them were rated 15 and up. On the other hand, more than 50% of foreign films released in Korea were for all ages or 12 and above. This led to having only a limited number of domestic films available for young audiences.
 
 
Sales
 
Return on investment (ROI) of Korean cinema maintained its surplus trend at 15.2% in 2013.
 
There were 19 projects that passed the break-even point, approximately 30.2% of the 63 commercial films released. The ROI reached its highest point since 2002. Keeping double-digit figures for two consecutive years demonstrates that the Korean film industry is now entering a stable era.
 
 
Exports
 
Exports of Korean films increased 83.7% from 2012. <Snowpiercer> was the driving force behind the rise, as it generated almost as much as the other films combined. However, exports to Asia decreased, which meant that the increase of sales were even larger for Europe, the Middle East, and Central and South America. Unique genres, high quality auteur films and K-pop star casts were major selling points.
 
Technical service exports also grew by 71% compared to 2012. China and Hong Kong accounted for 75.9% of total sales, which mostly consisted of VFX and DI services. From a total of 37 contracts, the amount for overseas Korean film services was USD 22.39 million. VFX/DI took up 84% of the contract amount. The demand for Korean technical services is likely to rise even more due to its level of quality relative to its price.
 
 
Ancillary Market
 
The ancillary market includes IPTV/digital cable, internet VOD and packaged products. Total annual revenue for digital online markets was KRW 267.6 billion, legitimizing its status as a distinct market. IPTV subscribers rose to over seven million, and to 6.12 million for digital cable TV subscribers. The increased supply of films in the market and increased subscribers led to the growth of the ancillary market, which is about seven times larger than it was five years ago.
 
The Top 10 films for TV VOD were all domestic films aside from <Iron Man 3>. <Miracle in Cell No.7> still ranked number one in the TV VOD section, reflecting its box office success.
 
Packaged products have shown negative growth for a few years, but Blu-rays has been on the rise.  The high price and low distribution rate of Blu-ray players have been obstructing factors, but they started to seen by consumers as ‘Collectables’. Usually, foreign films that were successful in the box office and were recognized as being high quality were purchased to become a part of consumers’ collections, and also animated and family films were popular.
 
 
<Table 3> Total revenue of the digital online market[1] (Unit: KRW 100 million)
Product
 
2009
 
2010
 
2011
 
2012
 
2013
 
revenue
 
YoY growth (%)
 
revenue
 
YoY growth (%)
 
revenue
 
YoY growth (%)
 
revenue
 
YoY growth (%)
 
revenue
 
YoY growth (%)
 
IPTV /Digital Cable
 
262
 
- 
 
491
 
87.4
 
910
 
85.3
 
1,310
 
44.0
 
1,737
 
32.6
 
Internet VOD
 
223
 
- 
 
267
 
19.7
 
501
 
87.6
 
618
 
23.4
 
729
 
18.0
 
Packaged products
 
403
 
- 
 
351
 
-12.9
 
298
 
-15.1
 
230
 
-22.8
 
210
 
-8.7
 
Total
 
888
 
- 
 
1,109
 
24.9
 
1,709
 
54.1
 
2,158
 
26.3
 
2,676
 
24.0
 
The revenue estimate for the N-screen service and the mobile service are included in the ‘Internet VOD’ revenue estimates.
 
Diversity Films
 
A total of 342 diversity films were released in 2013, which is 47.7% more than the previous year. However, admissions decreased to a share of just 1.6% nationwide.  Only six managed to sell more than 100,000 tickets: <To Rome with Love>, <Jiseul>, <Blue Jasmine>, <Silver Linings Playbook>, <A Last Quartet>, and <The Grandmaster>. The only Korean film, <Jiseul>, came in 2nd on the diversity admissions chart with 140,000 viewers, and the foreign film <To Rome with Love> came in first place. The competition is fiercer with more diversity films being released, but not enough theatres to screen them. The low admissions share is also likely due to the unfavorable time slots diversity films are assigned to by theatres.
 
 
Distribution
 
With the hit <Miracle in Cell No.7>, NEW rose to become the number one distributor for 2013, taking the spot CJ Entertainment had held since 2006. Even without the help of multiplex chains and without being a conglomerate, NEW’s success brought hope to other aspiring distributors. CJ Entertainment was 2nd in line with Lotte Entertainment coming in at third. Sony Pictures Releasing Walt Disney Studios took the foreign films section for admissions share. Following was Warner Bros. with just eight titles, but which attracted more than two million spectators each.
Original full length document can be found on the KoBiz website under publications: http://www.koreanfilm.or.kr/eng/publications/books.jsp?catCd=640106


[1] Revenues for IPTV and digital cable are relatively accurate since we were able to use data provided by three IPTV companies and one digital cable company. However, the revenue for Internet VOD is derived by adding sales data obtained from relative companies with estimates calculated from the year-on-year revenue growth rate.  Therefore, this data should be used only as reference data of the digital online market.
 
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