Korean films are struggling to maintain their market share, as a dearth of major hits undercuts their competitiveness, latest data released by the Korean Film Council (KOFIC) showed.
The number of Korean moviegoers who watched local films plunged 29.1 percent year-on-year in the January-October period this year. In contrast, foreign films witnessed a 35.3 percent growth in ticket sales during the same period.
The market share of Korean movies also tumbled from 62.3 percent last year to 46.4 percent this year, while foreign films rallied to achieve the remaining 53.6 percent, sharply up from 37.7 percent.
What's worse, while viewership slid significantly, the number of Korean films released in the first 10 months was 89, three more than the same period a year ago, further worsening profitability.
Hostile market conditions are dealing a harsh blow to major film distributors here. Heavyweight producers like CJ Entertainment, Showbox and Cinema Service are expected to post losses this year, casting a dark cloud on an industry which had enjoyed strong growth over the past couple of years.
CJ Entertainment actually performed better than last year, but due to accounting practices, it is unlikely to pull out of the red. The production and distribution house has posted a loss for the past three years.
Showbox, another major distributor, has introduced a dozen films this year, but none of them has been a hit at the box-office. The trend has also affected Cinema Service, which is still reeling from the box-office failure of "Hwangjin-y - Movie - 2007", which cost 10 billion won ($10.8 million) to make.
According to another market statistic released by KOFIC, less than one in 10 Korean films are turning a profit, raising deep concerns about the way local filmmakers produce and market their movies to local viewers.
The problems with profitability have been widely publicized in recent months, and the key issues are increased production costs and a noticeable decrease in revenues. According to KOFIC's visual policy research center, 81 Korean movies were released in the January-September period, with average production costs shooting up to 6.5 billion won. But average revenues stopped short of 2.5 billion won, which means the average Korean movie racks up a loss of 4 billion won.
The comparable average loss of a single Korean movie was 1.1 billion won last year.
The increase in average production costs also jacked up the average break-even point in audience numbers, from 1.32 million viewers last year to 1.96 million this year. Last year, 25 films, or 22.7 percent, turned a profit. This year, only five Korean movies -- 6.2 percent -- stayed in the black.
Total attendances also slid 5.8 percent to 132.7 million in the first 10 months this year, and if the trend continues at the current pace, the year 2007 will mark the first decline in total attendances in 11 years.
At a film industry forum hosted by KOFIC last year, one underlying problem highlighted in the Korean film industry was the absence of a spinoff market. Unlike other markets, where DVDs and other spinoff products bolster the overall revenue of films, Korea does not have a solid post-release market base.
The portion of ticket sales in the total revenues of Korean films turned out to be 83.7 percent this year, an enormous figure compared to the United States (26.8 percent), Europe (35.5 percent) and the rest of Asia (37.3 percent). At the forum, experts said ticket prices should be increased to help prop up the theater revenues as well as those of production houses, while Korean filmmakers should be more aggressive in making inroads into foreign markets so as to tap into new revenue sources.
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