Abstract
This book concludes by examining the key challenges facing the Korean film industry for the future. It considers the domestic challenges first, such as the dominance held by large domestic and foreign film companies in the Korean screening market. Next it explores the challenges to be faced by the Korean film industry in the future, with a focus on the opportunities and obstacles in terms of competition and cooperation offered by the East Asian film markets.
This chapter is a revised version of Parc and Messerlin (2021).
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Notes
- 1.
The Herfindahl–Hirschman Index (HHI) is a commonly accepted measure for market concentration. The HHI takes into account the relative distribution size of the firms in a market. It is calculated by squaring the market share for each firm competing in the market and then summing up the resulting numbers. For example, for a market consisting of four firms with shares of 30, 30, 20, and 20 percent, the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600). It approaches zero when a market is occupied by a large number of firms of relatively equal size and reaches its maximum of 10,000 points when a market is controlled by a single firm. In other words, the HHI increases both as the number of firms in the market decreases and as the disparity in size between those firms increases. Competition or regulatory authorities generally consider markets in which the HHI is between 1,500 and 2,500 points to be moderately concentrated and consider markets in which the HHI is in excess of 2,500 points to be highly concentrated (The US Department of Justice [2018], https://www.justice.gov/atr/herfindahl-hirschman-index).
- 2.
The terms that KOFIC utilizes are “actual” release in order to distinguish films that are exhibited at movie theaters more than forty times a year. To make this distinction clearer, this chapter employs “actual” release and “nominal” release, respectively.
- 3.
According to KOFIC (2020), screening a film forty times can be achieved in seven consecutive days; thus, a week.
- 4.
Under Korean law, if an audio-visual content is exhibited at a movie theater, it is classified as a “movie.” Once it is recognized as a “movie,” it can then receive a premium from VoD service providers when it is in service.
- 5.
Data is based on KOFIC (2020, p. 23); all the percentages are calculated by authors.
- 6.
Except for a two-year sunset period on the provisions banning block booking (bundling multiple films into one theater license) and circuit dealing (obtaining mass licenses for entire theater chains, instead of for individual theaters and films).
- 7.
In France, cinema chains sell annual memberships or bundle tickets. They offer a discounted price when compared with individual tickets of the same number of movie tickets. Regarding annual memberships, once an audience purchase it, (s)he can enjoy films as many as (s)he wants during that period.
- 8.
This complex decision process allows to understand why the “general” guidelines adopted seem so arcane for outsiders. For instance, these guidelines impose a threshold of 17 percent for the leading artistic films shown in towns of less than 50,000 inhabitants: why 17 percent rather than 16 or 18 percent is likely to reflect specific market conditions that only the parties involved in the negotiations understand.
- 9.
All the growth rates presented in this section are “compound average growth rates” calculated between the average two first years and the average two last years.
- 10.
Multiplexes are defined as movie theaters with more than seven screens in Korea, and more than eight screens in France. However, the French anti-screen monopoly regulations cover multiplexes that have six screens or more.
- 11.
CNC publishes data on the “occupancy rate”—the ratio of the number of admissions per the number of seats available. This is calculated as the number of sessions times the number of seats for each screen (CNC 2019). The French rate is remarkably low—15 percent on average for the last decade—and it is steadily decreasing, supporting the hypothesis of a massive overall overcapacity of the French exhibition sector.
- 12.
This result is influenced by the exceptional success of one French film, Intouchables, which was released in 2011. However, if one sets aside this exception, the decade still witnesses an even more negative growth rate for the admission of the French hits.
- 13.
China’s turnover is similar to the Korean one but it has been left aside because its exhibition market is highly regulated in an unpredictable manner (Parc, Messerlin, and Kim [2020 mimeo]).
- 14.
According to the regulations of the chronologie des médias, films should be exhibited at movie theater at least four months, but there are a few exceptional cases. But even for this case, these films should be exhibited three months before diffusion through other outlets.
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Parc, J., Messerlin, P.A. (2021). Distribution and Exhibition: Clouds on the Horizon?. In: The Untold Story of the Korean Film Industry. Cultural Economics & the Creative Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-80342-1_7
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