IM Pictures, a movie distributor and investment firm, has delayed the release of its 2006 movie business summary which was expected at the beginning of this year. IM Pictures has released an annual profit-and-loss report on Korea's film industry since 2001. It has cited a lack of data for the delay, but experts believe that IM Pictures doesn't want to scare off new investment by revealing last year's huge losses.
Industry insiders estimate the loss for 2006 at W100 billion(US$1=W945). That's nearly twice as much as the W63.3 billion in combined profits from 2003 to 2005. Last year, 90 Korean movies out of 110 failed to recoup production and marketing costs.
The problems facing the domestic film industry are serious. The average cost to produce a feature film is now W5.1 billion, according to a report by the Korean Film Council. And while the number of movie-goers remained about the same, the number of film releases jumped 30 percent over last year's figure. The snowballing costs mean that even a film that sells 1.5 million tickets will still post a loss. Big movies with budgets of W10 billion saw dismal returns and exports dropped by 68 percent.
Industry companies, including producers, investors, distributors and theaters, are scrambling to prevent further losses and hoping the crisis will lead to some kind of opportunity. The industry is making efforts to reduce production and marketing costs and expand into new foreign markets.
Cinema Service, a local production company, introduced a system in which directors and actors accept reduced fees in return for contracts that deliver rewards if the movie sees a profit. "The heads of production companies are thinking about how to reduce the cost of making movies", said Cha Seung-jae, the chairman of the Korean Film Producers Association. "We plan to release a guideline for reducing costs soon".
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