Thursday, October 25, 2018

The failure of 10 billion won movies, the industry in shock

Please do not use my translations without proper credit

Ansi Fortress barely managed to break even
Monstrum recorded 70% less than its break even point
Feng Shui and Negotiation 20 to 30% less

The Korean film industry was shocked by the fact that only one of the four major Korean films that invested more than 10 billion won in their production, was profitable during Chuseok. The holiday season is shorter than last year, and the total number of spectators is lower than last year. There is growing concern that such a deficit structure may be going on for the long run.

On the 24th, the film investment industry surveyed four box office performances, and the movie "Ansi Fortress" with the top box office collected 5,42 million admissions by the 23rd. "The collections have exceeded 5.41 million" said an investment publisher in NEW. "If we combine exports with on-demand video revenues, the surplus will increase." The cost of the film was 22 billion won, which is three times the average commercial film cost.

However, for Feng Shui that cost 12 billion won (2.8 million admissions) and Negotiation that cost 11.5 billion won (1.95 million admissions) this is still 20 to 30 percent below the breakeven point. Sales of Monstrum were even worse (720,000 admissions) that's 70% below breakeven point. 
Each one of these three films, which have invested more than 10 billion won, needed to collect 3 million to 4 million people to reach the break-even point.

The reason why the box office has failed is because the big movie screenings were concentrated in this Chuseok season compared to the movie market size. According to the Film Promotion Committee, the number of audiences for 9 days of the Chuseok holiday is estimated at 8,890,000 which is more than 10% lower than the Chuseok holiday last year.

It was also a problem that four big production movies were released at the same time to compete in a zero sum competition. The only 10 billion won Korean film released in Chuseok last season was "Fortress", and the same happened pretty much each Chuseok season. An official from an investment distributor said, "It was a problem that the works that were too big for the market, it would have been better if we had coordinated the releases not to clash with each other."

The reason why four or more films worth more than 10 billion won came to be is because the cost of film production increased by 30% compared to three years ago. One production company official said, "The cost per production has skyrocketed."

The wages of actors and A-level photographing staff also rose. Especially since the number of drama productions has increased since last year, some filmmaking staffs moved to the drama industry, and the movie industry was hit with a shortage of jobs. Nowadays, an A-level filmmaker receives 150 million won per episode, and the mid level filmmaker receives 80 million to 100 million won. In addition to these wages, an additional wage is paid if the shooting period becomes longer. They can participate in the production of two or three pieces (dramas) per year.

That's why a movie costing 8 billion won three years ago has increased to over 10 billion won this year. The production cost of Negotiation and Feng Shui would have been between 8 billion won and 9 billion won three years ago.

In the case of investment distributors, the bigger problem is that the formula for "unbeatable blockbuster, sure blockbuster" is broken. Until last year, more than half of the over 10 billion won movies had a surplus, but now the success rate of big movies is lowered to the level of ordinary commercial films. In addition, the number of new investment distributors is increasing, and competition is expected to become more intense next year.

"If we do not find new sales outlets such as overseas markets, the film industry will fall into a crisis," an official from an investment distribution company said. "We are worried that the movie industry will follow that of Japan, which has been greatly tamed down."

(I did not translate the comments but this was one of the articles with mostly thumbs down, the comments don't agree with "shaming" the increase of the staff's minimum wage and blaming it for big production costs, the staff work a gruelling 52 hours a week for months. they cite hollywood movies as example, and if the point is making a cheap movie to make profit then why don't indie movies make profit either? In the comments, if a scenario is good then the audience will follow whether it cost 10 billion or not, there's no need to blame staff's wages for it.)

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