The Unique Story of the South Korean Film Industry

Article  by  Jennifer ROUSSE-MARQUET  •  Published 30.09.2013  •  Updated 07.10.2013
From propaganda movies to the Golden Lion award at the Venice Film Festival, the South Korean film industry really has a unique history. South Korea is one of the few countries where local productions have a dominant share of the domestic market, surpassing American movies.


The craze for Kpop is slowly reaching Europe and the US, Gangnam Style a music video by South Korean singer PSY was the first video to reach1 billion views on Youtube in 2012, K-dramas are being exported to the Middle East … Music, games, TV shows: the South Korean culture seems particularly trendy these days. But what about the South Korean cinema?  
South Korea is one of the few countries where local productions have a dominant share of the domestic market, surpassing American movies. Not only do Korean movies garner public attention in their homeland, but they also win awards in prestigious international film festivals such as Cannes, Berlin or Venice: in September 2012, during the 69th Venice Film Festival, the best film award went to “Pietà”, by South Korean director Kim Ki-Duk.
It’s hard to believe that in the beginning of the 1980s this industry was still under tight government censorship and screen quotas, which almost brought it to pieces.
How did the South Korean film industry go from propaganda movies to the Golfen Lion award in venice?

From kino dramas to propaganda movies: 1919 - 1953

The history of South Korean cinema is closely intertwined with the difficult history of the country.
Major historical and political events greatly hindered the development and creativity of the domestic filmmaking industry such as the Japanese occupation from 1903 to 1945, World War II, the Korean War from 1950 to 1953, and last but not least, years of repressive control by the military government.
The Righteous Revenge (Uirijok Gutu), a kino-drama produced in 1919, is considered to be the first Korean film: while a motion picture was projected in the background, actors were playing live on the stage. The infatuation for kino-dramas was short-lived as the first silent feature was produced in 1923 (The Story of Janghwa and Hongryeon), and the first talking movie in 1935 (Chunhyang-jeon).  Moreover, at the time the first imported motion pictures were also very popular in Korea.
Between 1926 and 1932, small independent Korean companies managed to produce nationalistic movies. However, local and foreign movies had to face technical limitations and strict regulations, as every production - foreign and domestic - had to be approved by the colonial government. The Japanese police also attended the screenings.
As the restrictions worsen from the 1930s, mostly propaganda movies were made during this period. Also, the distribution and exhibition of films were limited to Japanese, who privately-owned movie theaters[+] NoteOnly one theater was owned by a Korean: the Dangsonsa Theater, which produced The Righteous Revenge in 1919. X [1], and the profits from exhibition were not reinvested in production. 
As a consequence, during the Japanese Occupation, only 157 movies were produced. Every single movie produced before 1934 has been cut, altered, destroyed or badly archived, and none can be found in its original form. During World War II, mostly war propaganda movies were made: between 1940 and 1945, 21 movies out of the 30 produced were propaganda movies supporting the Japanese army. In 1942 the government even banned Korean-language movies. Between 1945 and 1953, very few movies were produced, and most of the cinema infrastructures were destroyed during the Korean War.

Number of films produced from 1950 to 1959 in South Korea
Source: Traces of Korean Cinema from 1945 to 1959 (2003), Korean Film Archive

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From the Golden Age to the depression: 1953-1979

At the end of the Korean War, in an effort to revitalize the almost inexistent filmmaking industry, Syngman Rhee, the first President of the country ( 1948-1960) decided to exempt it from taxation. Free from government regulation, the number of films produced rose quickly, and went from 5 in 1950, to 111 in 1959. As technology improved, the local productions became more sophisticated. This “Golden Age” saw the development of the first genre films. During this time, the main topics addressed by movies were freedom and liberation from the Japanese occupation.
In 1955, Chunhyang-jon, which can be considered as the first South Korean “blockbuster”, was released: in two months, 10% of Seoul inhabitants,around 200 000 viewers -, had seen the movie - an impressive number for the time. Kim Ki-Young‘s The Housemaid (Hanyo), released in 1960, is an important feature from this area and is still viewed as one of the best Korean movies of all time (it was later remade in 2010). The movie, a domestic thriller, centers on a housemaid who seduced her master. The unstable femme fatale then tries to destroy the family.
 Hanyo (1960) trailer
Yu Hyun-mok ‘s Aimless Bullet (Obaltan), banned on its initial release in 1961, is also an another important movie from this period. This post-Korean war drama depicts in a realistic way the life of a Korean accountant who is struggling to support his family and find his place in a changing society.

Film strip from Obaltan (1960)
But this period of renaissance ended abruptly in 1962: following the military coup of 1961, a new government came to power, and the “Motion Picture Law" was enacted. Under this law, a limited quota of films could be produced and imported. The number of domestic production companies was also limited, and went from 71 to 16 in a year.
Films about illegal subjects – such as communism, obscenity or any topics that may harm the dignity and image of the country - were also censored. Weak storylines and bad productions made the attendance in cinemas fell by a third between 1969 and 1979. The new popularity of television at the end of the sixties also helped the audience flee from cinemas.
In 1973, in an attempt to boost the local industry, the government also limited the number of days imported movies could be shown in a year. As a result, the screening of Hollywood movies were strictly limited.
It was not until the eighties that the government started to reduce its control over the cinema industry, which slowly started to burgeon again. Thanks to the revision of the Motion Picture Law in 1984, independent production was permitted under certain circumstances, which allowed a new generation of producers to enter the film industry.
Although the attendance in theaters remained low during this period, the South Korean film industry started to gain international recognition. In 1981, Mandala by director Im Kwon-Taek won the Grand Prix at the Hawaii Film Festival, and in 1987, Kang Su-Yeon won the Best Actress award at the Venice Film Festival for her part in Surrogate Mother and another Best Actress award for her role in Im Kwon-Taek‘s Come Come Come Upward at the Moscow International Film Festival.

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Local productions vs foreign films

However, as the United States pressured the South Korean government for market, the Motion Picture Law was revised in 1984 and 1986 liberalizing foreign film importation and permitting direct distribution for foreign film companies.
These revisions had considerable impacts on the market share of the domestic industry.
Moreover, in 1988, the import restrictions on foreign films were lifted. Foreign film companies were also allowed to set up branch offices in Korea. For the first time, Korean films had to compete on equal terms with foreign productions.
Hollywood studios started to open branch offices in South Korea, lead by United International Pictures (UIP) in March 1988. Twentieth Century Fox followed in August 1988, Warner Bros. In 1989, Columbia Tristar in 1990 and Disney in 1993.
When the first films directly distributed by UIP hit the screens[+] NoteThe first one was Fatal AttractionX [2], demonstrations were staged by industry professionals and Korean newspapers refused to accept UIP advertisements. Non-poisonous snakes were even released in the aisles of theaters.
Before 1992, foreign imports and the sale of theatrical rights to regional distribution networks ( i.e. outside of Seoul) were the only sources of finance for producers, which may explain the violence of the reactions of the domestic industry professionals.

Before the establishment of these agreements, the distributors were given the right to import one foreign film for every four Korean movies they produced; They would then reinject the income from the distribution of foreign films into the production of Korean movies. However, most of the distributors used these profits to invest into real estate, and produced low-quality movies in order to meet the 4 in 1 quota. As a consequence, even with the screen quota as a protection against foreign competition, the low-cost, low-quality domestic productions were crushed by Hollywood blockbusters.

In 1993, in order to support the domestic film industry, a screen quota - established in 1963, but only fully enforced in 1993 - mandated that each theater in the country screen domestic films for at least 146 days a year. But it didn’t prevent the gradual decrease of the market share of domestic films in the following years: it reached 16% in 1993[+] Note16% in terms of attendance and 15,9% in terms of box-officeX [3]. Moreover, at the end of the 1990s the number of domestic films released was a sixth of the number of foreign films: in 1999, 42 Korean movies were released in South Korea, compared with 233 foreign films the same year.

Market share rate of the domestic box-office in South Korea: South Korean movies vs foreign films.
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The chaebols enter the film industry

1992 marks the year of the first film financed by chaebol (Korean conglomerates). Samsung became the first chaebol to enter the film industry by financing 25% of Kim Ui-seok’s Marriage Story. The movie was a box office hit, drawing 526 000 admissions in Seoul alone[+] NoteAt the time, it was the third highest-grossing Korean film of all time. X [4]. A new source of finance was born for producers.
Other chaebols which got involved in the film industry in the early 90’s include Daewoo and Hyundai.
Following the 1997 financial crisis, many chaebols (including Samsung) dropped out of the cinema industry to re-focus on their core businesses. This lead the way to a second generation of conglomerates, such as CJ, Orion and Lotte.
The chaebols completely transform the structure of the film industry, introducing a vertically integrated system. They got involved in every stages of the cinema industry: financing, production, exhibition, distribution, as well as international sales and video release of films. These heavyweights also own nationwide multiplex chains[+] NoteCJ Group owns Korea's largest film investor and distributor CJ E&M and the biggest multiplex chain, CGV, and Lotte Group owns film investment and distribution company Lotte Entertainment and Lotte Cinema, which has the second largest number of theaters.X [5]. The number of screens increased drastically, and went from 588 in 1999 to 1 451 in 2004.

CJ, Orion and Lotte remain nowadays the industry's most powerful players, and occupy 80% of the market.
Apart from chaebols, venture capital companies played an important role in film investments from 1998 to the end of 2005. In the early 2000s, the government also contributed to the domestic industry as a participant in investment funds, which encourage many to invest in the film industry.
Lately, with the growing importance of new medias, telecom companies such as national operators SK telecom and KT have started to invest in the film industry.

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Apart from its contribution to investment funds, the government created the the Korean Film Council (KOFIC), a self-administered body played a significant role in stimulating and protecting the domestic industry. Launched in 1999, this organization was created to support and promote the South Korean film industry in the local and international markets. The organization is headed by nine commissioners appointed for three years by the Ministry of Culture, Sports and Tourism, most of whom are film industry professionals.
The KOFIC helps the industry in various ways: by providing grants and funding, supporting R&D for Korean Films, supporting art house theaters and independent productions, helping in the marketing activities of Korean sales companies in international film festivals… The KOFIC also sponsors and organizes film festivals, and publishes a number of books and magazines in English[+] NoteKorean Cinema, Who's Who, Korean Cinema TodayX [6].
In foreign countries, the KOFIC supports the release and screenings of Korean productions, including documentary and animation films. The organization has also established The Ancillary Market Distribution Management System, a distribution platform for copyrighted online cinema content : , and runs KoBiz, an online business center for international PR for Korean films.

Finally, the organization provides a 25% cash grant incentive on foreign company shooting in Korea[+] NoteThe Foreign Audio-Visual Works Production GrantX [7] and supports co-production projects during their development stage. In 2012, the KOFIC supported 33 Korean-foreign joint production films with the USA, France, Japan and China.
Since July 2007, KOFIC manages the Film Development Fund, which provides money to various investment funds for Korean films and plays a critical role in the domestic filmmaking production. The major part of this fund is financed by the government, while the remaining parts come from a 3% allotment from ticket sales, and leftover funds from previous years.

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The heyday of Korean blockbusters

At the end of the 1990s, the market share of Korean movies was around 25%. However this situation radically changed in 1999 with the success of the movie Shiri.
Both a critical and financial success in Korea, Shiri [+] NoteOr Swiri as it was called in South Korea.X [8] was one of the first big-budget action movie.Part of the $8.5 million budget of the movie was covered by Samsung.

An homage to Asian action movies (particularly Hong Kong action cinema), and American movies from the 80s, Shiri follows the pursue of a North-Korean assassin by two South Korean government agents. When North Korea Special Forces steal a shipment of a liquid explosive, with which they threaten Seoul, the two special agents attempt to track them down.
Shiri attracted 6,2 million viewers[+] Note2,4 million tickets were sold in the Seoul region alone.X [9], breaking the record previously held by Titanic with 4,3 million viewers. As a consequence, the same year the market share of Korean films went up 39, 7%, a 58 % increase from the previous year.

Market share in terms of admissions between 2000 and 2009 in South Korea

Other blockbusters followed, such as Joint Security Area in 2000 and Friend in 2001, which attracted 5,8 million viewers and 8,1 million viewers respectively. As a consequence in 2001, Korean movies increased their market share up to 50, 1%, a number which has remained fairly stable since then.
In addition, in 2003 and 2004, Silmido and Taegukgi : The Brotherhood of War became the first films to sell 10 million tickets.
Highest-grossing domestic films in South Korea
Because of the fierce competition with foreign films, the South Korean film industry focused on producing high-quality movies of various genres, with strong story lines. 
With the regional popularity of Korean dramas such as Winter Sonata, the demand for Korean films in the foreign markets increased. Consequently, when the first international sales companies were set up in 2000, it resulted in an exponential growth in export sales.
Shiri was extremely popular throughout the rest of Asia, as well as My Sassy Girl, April Snow, and A Moment to Remember.
Korean films became commercially viable in the domestic and regional markets. A new generation of directors became visible in Europe and the US, such as Park Chang-Wook, Kim Ji-Woon, Kim Ki-Duk, Bong Joon-Ho, Hong Sang-Soo and Lee Chang-Dong.

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International recognition

The area between the late 1990s to the mid-2000s is considered as the Renaissance period for the South Korean cinema, as the industry began to gain international recognition.

Awards won by Korean Films in international competitions between 2002 and 2012

The first international film competitions held in Korea were also established around that time.
In 1996, the Busan International Film Festival (BIFF), the first international film festival in Korea, was established in order to introduce and support new directors and movies with particular attention to Asian cinema. 173 films from 31 countries were screened during this first edition. In 2012, 304 films from 75 countries were presented at the BIFF.
Other major international film festivals held in Korea include the Puchon International fantastic Film Festival (PiFan) launched in 1997, and the Jeonju International Film Festival (JIFF) launched in 2000 and which mainly focuses on digital, independent and art films.
Moreover, American distributors such as Warner Brothers, MGM or Dreamworks started to purchase the rights to remake successful Korean films, such as  ‘Sympathy For Lady Vengeance (2005),’ ‘The Host,’ ‘Addiction’ (2002), ‘My Sassy Girl’ (2001),  and‘A Tale of Two Sisters’ (2003).
In the beginning of the 2000s, some Korean actors started to make their entry into Hollywood.
Singer-turned-actor Rain was cast in 2008 in the Wachowskis’ Speed Racer, and in 2009 in “Ninja Assassin”. Actress Jun Ji-hyun starred in Blood: The Last Vampire (2009), and actor Jang Dong-gun in “The Warrior’s Way” (2010). However, neither of these films were commercial success.
Actor Lee Byung-Hun, a star in South Korea, is one of the few actors who seems to have found his place in Hollywood – probably because of his proficiency in English - , although for the moment his roles seem limited to the stereotypical Asian characters. He made his Hollywood debut as Storm Shadow in the 2009 blockbuster “G.I. Joe: The Rise of Cobra”, and reprised his role in the 2013 sequel “G.I. Joe: Retaliation”. In “RED 2”, set to be released in August 2013, he shares the screen with John Malkovich, Bruce Willis and Helen Mirren.
More recently, actress Bae Doo-Na was chosen in 2012 by the Wachowskis’ for “Cloud Atlas”, a performance which earned her praises by the Hollywood industry

Bae Doo-Na dans Cloud Atlas and Lee Byung-Hun in GI Joe: Retaliation
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The depression of the industry

In 2006, following the free-trade agreement negotiations with the USA, the South Korean government decided to lower the screen quota enforced in 1993 – i.e. the number of days per year that domestic theaters have to screen domestic films - from 146 to 73. As many industry professional saw this screen quota as the main reason behind the development of the domestic film industry since 1998, street protests were held.
The same year,$954 million worth of tickets were sold– an all-time record -, and Korean movies took a 64% share of the market.  
As the film industry became particularly lucrative, many production companies tried to enter the market. As a consequence, 100 movies were produced in 2006, very uneven in quality.
The rising production costs of films resulted in a decrease of the profit on investments, which went from 41.5%, in 2001 to -24,5% in 2006 and -45% in 2007.
As a consequence, export prices began to fall, and in 2006 overseas sales fell 70% from a year earlier. Japanese sales alone plunged 83 %.
This stagnation period ended in 2012, a record-breaking year for the Korean film industry.

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The record-breaking year in 2012

195 million tickets were bought in 2012 up 22 percent from the previous year: that’s the highest number of tickets sold in the history of the Korean film industry.
According to the KOFIC, Korean movies accounted for 58.8 percent of the market share and the movie business saw a 13 percent profit on investments, marking the first surplus in seven years.
“The Thieves” and “Masquerade” were the highest-grossing movies of the year, and attracted more than 10 million viewers each.

A still from Masquerade (2012)

The Korean film exports also went up 8.4% to a total of $37,8million, which marks the first time since 2008 that film exports went over the $20 million mark.
In 2013, three acclaimed South Korean directors made their English-language debuts : Park Chan-Wook with “ Stoker”, Kim-Ji Woon with “The Last Stand”, and Bong Joon-Ho with “Snowpiercer”.
“Stoker” is a family drama which centers on the relationship between India, an 18-year-old girl mourning the recent death of her father, and her uncle Charlie.. Although Stoker is an English-language production, starring no less than Nicole Kidman, Mia Wasikowska and Matthew Goode, the unmistakable style of Park Chan-Wook (I’m a Cyborg but that’s OK, Old Boy, Lady Vengeance, Thirst) can easily be recognized.
Stoker from Park Chan-Wook (trailer)
Park Chan-Wook is also a producer on Snowpiercer, a highly-anticipated movie directed by Boon Joon-Ho (Memories of Murder, The Host, Mother)[+] NoteThe two directors are friends.X [10]. Based on the French graphic novel Le Transperceneige by Jacques Lob and Jean-Marc Rochette, Snowpiercer stars Chris Evans, Song Kang-Ho, Jamie Bell, John Hurt, Tilda Swinton, Octavia Spencer and Ed Harris. This science-fiction movie takes place after an Ice Age has killed everyone on the planet, except for a handful of people who now lives on the Snowpiercer, a train travelling around the planet.
In The Last Stand, directed by Kim Ji-woon (The Good, The Bad and the Weird, A Tale of Two Sisters, A Bittersweet Life, I saw the devil), a drug cartel leader tries to reach the Mexican border, as a  small town sheriff and his inexperienced deputies try to stop him. The sheriff is played by action star Arnold Schwarzenegger.
  The Last Stand trailer
Altough Stoker received mostly positive reviews from critics praising the style and cinematography of the movie, “The Last Stand”didn’t seem to convince moviegoers as the film performed below expectations : with a production budget of $30 million, the movie grossed $37,1 million. Moreover, the opening-weekend gross ended up being the worst debut in Arnold Schwarzenegger’s career.
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A corporate-oriented system endangering the industry

The South Korean filmmaking industry has had a tumultuous history, governed by historical and political instabilities. Lately, the South Korean cinema has been gaining international recognition, and South Korean actors en directors are even making their way into the  US market.
However, three heavyweights- CJ, LOTTE and ORION- control 80% of the South Korean film-industry.,  Involved in every step of the creation of movies, these companies are also involved in the distribution of films. As the chaebols are naturally putting forward their own productions. low-budget independent productions struggle to get exposure,
For the sake of the diversity and creativity of the South Korean cinema, this issue should not be avoided.

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Chi-Yun SHIN, Julian STRINGER, New Korean cinema, NYU Press, 2005

Eungjun MIN, Jinsook JOO, Han Ju KWAK, Korean Film: History, Resistance and Democratic Imagination, Greenwood Press, 2003

KOFIC,Korean Film Industry Guide 2005 - Korean Film Industry for Last 10 Years”, 2005
June-Kyoung PARK (Showbox), The Korean Film Industry, Dramatic Movement Over The Next Generation”.
Sung Kyung KIM, The Political Economy of the Korean Film Industry: Focusing on the Korean Blockbuster and the Dominance of Multiplex”, Sungkonghoe University / Institute for East Asian Studies, 2012


Photo Credits:
Main visual: Jinsimcamp / Flickr
'Hanyo' trailer (Cineasiefr / YouTube)
Film strip from 'Obaltan' (synarchici / YouTube)
Busan Film Festival (Jens-Olaf / Flickr)
Screenshots from 'Cloud Atlas' (MOVIECLIPS Trailers / YouTube) and 'G.I. JOE: RETALIATION' (CBMTrailers / YouTube)
Still from 'Masquerade' (CJEntertainmentUSA / YouTube)
'Stoker' trailer (FilmsActuTrailers / YouTube)
'The Last Stand trailer (movieclipsTRAILERS / YouTube)
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  • 1. Only one theater was owned by a Korean: the Dangsonsa Theater, which produced The Righteous Revenge in 1919.
  • 2. The first one was Fatal Attraction
  • 3. 16% in terms of attendance and 15,9% in terms of box-office
  • 4. At the time, it was the third highest-grossing Korean film of all time.
  • 5. CJ Group owns Korea's largest film investor and distributor CJ E&M and the biggest multiplex chain, CGV, and Lotte Group owns film investment and distribution company Lotte Entertainment and Lotte Cinema, which has the second largest number of theaters.
  • 6. Korean Cinema, Who's Who, Korean Cinema Today
  • 7. The Foreign Audio-Visual Works Production Grant
  • 8. Or Swiri as it was called in South Korea.
  • 9. 2,4 million tickets were sold in the Seoul region alone.
  • 10. The two directors are friends.
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