Experts anticipated the South Korean film industry to rebound in 2023, with pandemic restrictions and fears over. However, contrary to these expectations, the industry faced a stark reality. While the U.S. film market saw a resurgence with successful viral marketing campaigns like “Barbenheimer,” the Korean film scene struggled, with only a few films achieving profitability.

This unexpected downturn signaled a critical moment for an industry at a crossroads, challenging its traditional strategies and market dynamics.

A CRISIS YEAR

In 2023, the Korean film industry released over a hundred films in cinemas, but success was elusive, as only six of these managed to recoup their production costs. Among the few successes were“The Roundup: No Way Out,” “Smugglers,” “Sleep,” “Love Reset,” “The Ghost Station” and “12.12: The Day.” This underperformance of the majority of releases underscores a deepening crisis.

The financial struggles extended across various genres and production scales. A case in point was the sci-fi disaster film “The Moon.” Despite considerable backing from CJ ENM, to the tune of $21.5 million (28 billion won), the film fell drastically short of its break-even goal of 6 million admissions, selling only half a million tickets.

Similarly, “Road to Boston,” a historical drama from Lotte Entertainment with a budget of $16.1 million (21 billion won), also faced a significant shortfall, attracting just over a million admissions, far below the required 4.5 million.

These instances were not anomalies but part of a broader trend of underperformance, with other major releases like “Phantom,” “Ransomed,” and “The Point Men” echoing similar disappointing outcomes. Even films like “Concrete Utopia,” which achieved a measure of success and was selected as South Korea’s submission for the Academy Awards, struggled to meet its admission targets, barely reaching the threshold of 3.8 million.

A particularly alarming aspect was the industry’s inability to attract audiences to local films. Between January and August, the total revenue generated by Korean films reached only 45.9% of their pre-pandemic levels. In contrast, international films showed a robust recovery, achieving 89.7% of their previous performance.

This disparity highlights a troubling trend for the Korean film industry, which once prided itself on its strong domestic appeal.

An empty cinema, May 22, 2021 | Image: Tima Miroshnichenko via Pexels

REASONS BEHIND THE DECLINE

The downturn in South Korea’s film industry in 2023 can be attributed to several key factors. The rise of streaming services like Netflix and changes in viewing habits post-pandemic are often cited. However, a Chosun Ilbo survey in May revealed a more immediate cause: the spike in cinema ticket prices was the primary deterrent, cited by 40.2% of respondents.

Ticket prices in South Korean cinemas saw a significant rise during the pandemic, a move aimed at sustaining theaters financially. For instance, the cost of a ticket for a standard 2D weekend screening jumped from $9 (12,000 won) to $11.40 (15,000 won), with premium formats like IMAX or 4DX exceeding $15 (20,000 won).

The survey further indicated that 76.2% of respondents would be more likely to visit cinemas if prices were reduced.

Beyond ticket prices, the survey identified two other critical issues: a perceived lack of compelling films (28.3%) and a growing satisfaction with streaming media services (26.9%).

These findings point to a deeper problem within the industry — a disconnect between the films being produced and audience preferences. Even big-budget genres such as action thrillers, space operas and historical dramas have seen underwhelming performances, while star power no longer guarantees box office success.

“There’s a stagnation in blockbuster production,” Oh Dong-jin, a prominent film critic, told Korea Pro. “The content has become cliched, outdated and lacks originality. Quality has declined and the provocative essence that films used to have has been lost. Consequently, even more exciting films such as “Decision to Leave” and “Cobweb” suffered because the weak market could not ensure their expansiveness.”

The proliferation of streaming services extends beyond offering alternative viewing options; they have disrupted traditional cinema revenue models. Netflix, with its substantial investment in Korean content, has been a key player in this shift. Studios are now under pressure to release films on streaming platforms sooner, shortening the traditional waiting period of 45 days and further deterring audiences from cinema visits.

However, Oh cautions against blaming streaming services entirely. “It would be naive to solely blame Netflix. In fact, it has been a positive force in some ways as it helped to diversify Korean films. The industry’s failures in theatrical releases this year revealed weaknesses in its fundamentals,” Oh said.

A promotional still of the political period drama “12.12: The Day,” which drew more than 10 million admissions in 2023 | Image: Plus M Entertainment via Twitter

GLIMMER OF HOPE

Despite the industry’s challenging year, the South Korean film industry found a ray of hope in the success of “12.12: The Day.” This political period drama, set against the backdrop of Chun Doo-hwan’s military coup in 1979, resonated deeply with audiences, becoming only the second film of the year to cross the 10 million admissions mark, following “The Roundup: No Way Out.”

“While last year was about sequels, such as ‘The Roundup’ and ‘Confidential Assignment 2,’ this year, some of the films that did well were not based on existing intellectual properties, such as ‘Smugglers’ or ‘Sleep,’” Jason Bechervaise, a Korean film expert, told Korea Pro.

“It showed that if you have an interesting concept, it can speak to audiences and succeed. This could be very encouraging, as it was original, mid-sized budget films in the early 2000s that ultimately generated the kind of exciting cinema that Korea is associated with today. We might end up seeing more films like that and fewer of the big tentpole films,” Bechervaise noted.

Darcy Paquet, another industry expert, echoed this sentiment. He pointed out the unsustainability of the recent trend toward larger-budget blockbusters.

“There needs to be a new approach. The industry has just gotten bigger and bigger for 25 years, but it now needs to focus on becoming more efficient and modest in terms of its production goals,” Paquet said.

“We’re also at this strange moment where the global market for Korean content is expanding, yet domestically, it is shrinking, particularly in theaters. Korean companies are still operating in an older model of distribution and are not well placed to take advantage of the expanding market. It needs to adapt,” he told Korea Pro.

Bechervaise expressed confidence in the resilience and adaptability of the Korean film industry. He cited the success of “12.12: The Day” as evidence of the industry’s capability to bounce back and evolve.

While Oh Dong-jin also agrees that the industry must change, he added, “There needs to be intervention from public institutions and support from public funds. However, I have doubts whether the current government is willing to do so.”

Edited by John Lee