September 26, 2005


The Screen Quota System in Korea is given a lot of credit for the Korean film boom that started in 1998 and shows no signs of abating. The system ensures that Korean movie theaters show Korean movies for 115 days of the year and many film industry professionals, including Kang Je-Gyu (director of SHIRI and TAE GUK KI), claims that it is essential for Korea to be able to protect its market against a Hollywood steamroller.

Finance Minister, Han Duk-Soo, has been having meetings with actors to discuss replacing the screen quota system, and he is now in Washington DC saying: "Hey, anyone have any good ideas on how to replace this system?"

The Motion Picture Association of America has long been an opponent of the quota system, and arguments over the quota system have kept the US and Korea from signing a Bilateral Trade Agreement. The WTO currently considers film an "industrial" rather than a "cultural" product and as such it is subject to all free trade agreements between countries.

There is a UNESCO-proposed Convention on Cultural Diversity that seeks to exempt movies from free trade agreements but it's still in the drafting stages.

If anyone thinks that Korea can withstand open competition with Hollywood, I direct your attention to the Mexican film industry which almost totally self-destructed after government support was withdrawn as part of NAFTA. There are only two countries in the world that I know of which have domestic movies holding a majority of the box office (besides the US) and that's India (which imports almost no Hollywood movies) and Korea (which has the screen quota system).

September 26, 2005 at 06:12 PM in News | Permalink


How about Egypt?


I agree with your point, however. I would hope that if Korea changes its quota system that it wouldn't reach the dismal state Mexico's industry has, but why risk it?

As curious as I might be to see what an installment of the Harry Potter franchise might look like if directed by Kim Ki-Duk, in all honesty it probably won't be as easy for Korean auteurs to assimilate into a Hollywood-oriented global filmmaking scene as it has been for a few talented Mexican directors. Keep the quotas, I say.

Posted by: Frisco Brian | Sep 26, 2005 6:36:35 PM

the problem is not Korean people supporting their films, they'll always do that.

Problem is, if the quota drops, every single Hollywood major is going to come to the table with their big films, and force theater owner to show another 7-8 of their lousy leftover from bad box office in the US to get to the Holy Grail. They're already doing that to a degree, but it'll get worse.

Which means anything distributed by Showbox, CJ CGV and Cinema Service will be fine. If it's an independent film, even with a decent box office draw in a starring role, it will have no chance.

It's disgusting but not surprising Hollywood is trying to force their pap down Koreans' throats with this. But the battle will not be as easy as the Minister think it will be. I could envision something like a strike, a lot of the 'top' directors and actors are also active protecting the quota. Park Chan-Wook, Lee Hyun-Seung, Ryu Seung-Wan, Ahn Sung-Gi, Song Kang-Ho... long list.

Personally I would change the screen quota, but to make those 115 days 150 or more. And only allow one deal per one film. No 'package deals' for Hollywood. And also allow more Japanese and Chinese films to make up the rest of the year's releases.

Posted by: x | Sep 26, 2005 6:48:39 PM

>>>>>Problem is, if the quota drops, every single Hollywood major is going to come to the table with their big films, and force theater owner to show another 7-8 of their lousy leftover from bad box office in the US to get to the Holy Grail.>>>>>>>>

Yep, this is what they do in here in Turkish Republic.

I think Korea should keep the quota in order to help their film industry.

I wonder what the deal is with HK and was is always there or has been smended since the late 90's?

Posted by: eliza bennet | Sep 27, 2005 1:17:45 AM

Heh heh. Listen to you people talking about Hollywood "forcing" people to "show their movies". What a joke. If people didn't want to see the latest Hollywood junk theater owners WOULDN'T show them. That's a fact, so please, give us all a break and return to reality. It's all about capitalism, and it hardly matters if the theater owners are Koreans, Turkish, Indian, or whatever -- if their Government allows them the freedom to choose, they will almost always choose their own pockets. It is a BUSINESS, after all, and if Kim Ki-duk's latest doesn't cut it with Joe Blow Korean (and from all indications, it doesn't, because only foreigners like you folks seem to really love Kim Ki-duk), why would Joe Blow Korean Theater Owner keep showing a film that doesn't sell tickets? SNAP OUT OF IT! SMELL THE REALITY!

Posted by: sam | Sep 27, 2005 3:56:37 AM

Sam - hey, nice to hear your point, and you make a good one which is that market forces should determine what gets shown in movie theaters.

Unfortunately, while market forces do play some part in what runs in a movie theater, they play a minor part because theaters are booked before movies are released. Theater owners try to anticipate what the big movies will be and then book accordingly. In America, the result is "roll-overs" where a theater didn't anticipate the audience demand for a movie and so the movie gets "rolled over" to another theater because the first theater is contractually obligated to book their next film before demand for the first film is satisfied.

Also, movies that are massively promoted - STAR WARS III, WAR OF THE WORLDS - are able to cut whatever deal they want with theater owners because the owner can assume that the massive promotion behind the film will ensure a certain amount of audience interest. But when a big movie bombs the theater owners get burned. It's the price of doing business, but it explains why theater owners prefer to play it safe by booking big films rather than booking a smaller film that may be good, but don't have a big marketing campaign behind it.

In Korea (and much of the rest of the world, but let's pick on Korea) this means two things. One is that Korean theater owners are more likely to program a Hollywood movie, with its big international marketing push, than a local Korean movie. Back in 2000 people in the Korean industry complained about cases where Korean movies that were performing well at the box office were pulled from screens by nervous theater owners who needed to make way for the next Hollywood film they had booked. The feeling was that, generally, Hollywood movies were a safer bet than Korean movies, even when the tally at the box office showed otherwise. The theater owners played it safe because business owners are, more often than not, essentially conservative. The quota system gets around this problem by taking part of the choice out of the theater owners' hands.

The other problem is block booking. This is the practice the posters above are talking about where a theater is given a hit movie, but also has to book 4 or 5 lesser-known movies as part of their agreement with the distributor. This is not allowed in the US at all, but overseas it seems to be common practice. That's why, if you walk around Hong Kong, you'll see theaters showing movies that are straight-to-video in the US, like HAUNTED (the Aidan Quinn movie) or HALLOWEEN 7.

The essential problem here is that Hollywood is a very effective industry that is very good at making money and promoting its product, regardless of the quality of the product. The studios have war chests that put the annual budgets of some small countries to shame, and they have the ear of Washington and the politicians who administer the richest and most powerful nation on earth (don't forget that the MPAA is a lobbying group, first and foremost).

On the one hand, there is an argument that might makes right in terms of the market, but I prefer to think of movies as a cultural product as much as an industrial product, and I enjoy seeing movies from different film industries, and movies from different countries. It has been demonstrated several times that when a country that's not America stops subsidizing or protecting its film industry that country's film industry suffers because, frankly, no one is as rich as Hollywood. I'm not sure what's being lost by having different film industries around the world, and while your point is very rock n'roll I can't help but think that you wouldn't be reading this blog if you didn't feel the same way.

Posted by: Grady Hendrix | Sep 27, 2005 8:23:42 AM

I don't think I want to take sides in the screen quota debate because there are so many tricky unknowns that do one's head in, but there are some points related to the opening sentence above that I would like to share.

The Coalition for Cultural Diversity in Moving Images has always asserted causality between the screen quota and Korean film's commercial renaissance, but in my opinion they are yet to provide compelling evidence to substantiate this claim. In the UNESCO speech hyperlinked above, the general director of the CDMI suggests that the screen quota was chiefly responsible for not just Korea's late-1990s audience boom, but also the increase in Korean film exports over the past few years, the critical impact of a selection of arthouse pictures at international festivals, and the success of the Pusan International Film Festival.

Those are all big and unproven calls (the putative link between the quota and film exports is especially suspect). I think it's safe to say that the quota ensured some Korean films would make it to local screens, but it had very little to do with enticing people to attend those films.

Far more significant than the screen quota in 'driving' the revitalisation of Korean cinema were circumstances such as the multiplex construction drive of the late-1990s, the rising cost of film imports and the increase in domestic film investment due to the decline of the won in 1997/98, the transformation of film production and finance after the exit of the chaebol and the emergence of conglomerates like CJ Entertainment, the rise of a more liberated and critically informed young audience, and so on. There are many explanations for Korea's success, not just one isolated factor, as the CDMI would have us believe.

The CDMI also argues that the screen quota was not properly implemented until 1993, the year the CDMI formed (originally under the name of Screen Quota Watchers). For the record the screen quota was introduced with the Second Amendment to the Motion Picture Law in 1966 and has existed in various forms for the last four decades. Sometimes protection has actually been stricter than what it is today (106 days). Between 1981 and 1985, for instance, the mandatory screening period for Korean films was 165 days. Unfortunately, there were many breaches of the quota as exhibitors ignored or paid off regulators. Through its watchdog activities the CDMI reduced breaches in the quota after 1993, and for this they must be congratulated. However the CDMI has not accounted for the interesting fact that theatres now comply with the quota to a much greater extent than the 106 days the quota demands! Since 2001, exhibitors have screened more Korean films than they are required to under law. This goes against the logic of theatre owners playing it safe with Hollywood products (why not top out at the minimum 106 days?), and suggests that basic market forces dictate exhibition decisions more than the CDMI would like to let on.

The most satisfying reason for the willingness of exhibitors to screen Korean films is that Korean cinema has become commercially viable and competitive with Hollywood in the last few years. Another is that exhibitors gain a larger share of revenues from domestic films, keeping 50% of the profits rather than the 40% split they get for imported films. So long as the domestic audience remains content with the commercial entertainment structure of their film industry, theatre owners don't have to be told to show Korean films because they are quite happy to do so.

The point made above about the distribution of independent Korean films seems the most imperative to me. Exhibitors will only stick by popular Korean films, and to be popular those films must have a mass-market appeal - they must be commercially orientated. Independent, low budget, experimental films do not usually stand a chance of box office success unless they can secure a major Korean or American distributor. Nor do they stand a chance under the screen quota system! Hollywood and commercial Korean films already dominate Korean movie houses. Smaller films like Song Il-gon's 'Git' find it difficult to secure screens and attract audiences. Clearly the quota and the CDMI are not doing a very good job for filmmakers on the margins like Song (who nonetheless remains a firm supporter of the quota). If the quota comes down its important the Korean film industry comes up with a piece of protection for independent filmmakers and distributors. Rather than continue to assert cultural protection above all else, organisations that truly care about Korean cinema (not just the economic and political benefits that go along with a cultural defence of Korean cinema) should put more thought into the shape and specific levels of protection that hypothetical policy might involve.

Posted by: James Brown | Sep 28, 2005 4:29:57 PM

they don't necessarily need to be 'commercial.'

all they need is good backing, and a few known stars. 'A Good Lawyer's Wife' is not exactly commercial, and with good distribution and recognizable stars, it made good money. Same for stuff like 'Oasis', some of Park Chan-Wook's films... you get the point.

The problem is only for those films without stars or a big company behind the scene pushing the marketing. The 'independent' part is only structural and financial, not in artistic or stylistic terms. Otherwise films like 'The Way Home' and 'Dongmakgol' wouldn't make the money they did and still do.

Posted by: x | Sep 28, 2005 6:26:30 PM

I agree that the screen quota alone isn't going to do much for Korean films, but I also kind of feel like: if it ain't broke, don't fix it, especially regarding Korean movies these days.

Does anyone actually know if the Korean audience is crying out for imported films that aren't able to find screen space in Korea? I just can't see that the screen quota system does any ill, and since things seem to be going pretty well in Korea these days I don't see the point in tampering.

Also, just a little tidbit: back around 2001 I was pitching a story on the screen quota system to a paper and I did a few interviews, one of them with a fellow at the MPA to get some background. He told me that the MPA's view was that US multiplex chains would not build in Korea if the screen quota system was in place, and that since the market for multiplexes was not doing so great in the US, and since overseas expansion seemed to be the key to financial solvency for a lot of these companies, the MPA was against the screen quota. Their thinking was that Korea was underserved in terms of screens, and the multiplex companies needed to expand and that this was a no-brainer of an opportunity.

Now, this was only one interview, and it wasn't for attribution, but it does reveal that a lot of this stuff is more complicated than it looks.

Posted by: Grady Hendrix | Sep 29, 2005 1:07:11 PM

based on my reading (which doesn't extend that much outside the 'movie fan/film criticism' sphere) of online newspapers, webzines, and the like, there are people who would like more diversity in Korean theaters. And with that I mean more European, Chinese, South East Asian films. Japanese films are somewhat well covered, and Hollywood of course is as well.

Well, the feeling I get is that people would rather see only the big Hollywood films, and avoid the rest. You kind of get the feeling if lesser movies from Hollywood (let's say those coming from 'block booking') were replaced with films from Europe, Iran, China, Thailand or South America people would certainly not complain. You see it today with the box office numbers. People will go see stuff like Mr. and Mrs Smith, Charlie and The Chocolate Factory, and so on. But the smaller films do only low 6 figures.

I agree with you there's no need to change the quota for the sake of quick money (how come proposals to cut the quota always come from conservative politicians from the economic sphere?). If the US really wants to sign an FTA, they have to consider the other party too. But I would like some small structural changes to be made, the most important of which would be abandoning block booking.

As far multiplexes go, unlike HK, the most important are owned by Korean companies (see CJ CGV), even though foreign companies might have shares of those, so it's not so much a problem of finding space for Korean films. I think it's more of a mentality process: you have the screen quota to back things up, so theater owner can't just drop the ball on you. People who want to change the quota always bring up the 'now Korean Cinema is doing so well, what do you need the quota for?' Well, Korean Cinema was doing great in the 60s, but then came TV, numbers went down. They had highs and lows for 30 years, until reaching rock bottom in the early 90s. Now Chungmuro is doing extremely well (especially this Summer!), but who knows how long that will last.

And I find this idea of drawing parallels between the importing of films and that of, say, bananas to be quite insulting. Films might not always be 'high art', but people shouldn't consider them as mere exchange goods.

Posted by: x | Sep 29, 2005 1:29:24 PM

X, thanks for pointing out those exceptions to the general rule, but I think you may have stopped reading my post when you hit the word commercial. As I indicated, and you echo, we know that films tailored for an art rather than a mainstream circuit won't succeed commercially unless they secure a big distributor. Oasis and The Way Home were backed by CJ Entertainment. A Good Lawyer's Wife by Chungeorahm. Interestingly they were all opened on 30-32 screens, which is fairly wide but nowhere near the peak openings for their period (70+ screens).

Your other post brings up another piece of the puzzle missing from this debate at the moment: the vertical integration of the Korean majors. Why would theatre owners 'drop the ball' when the productions they are screening are a part of the same media conglomerate? CJE productions will always be able to secure CGV screens because they are operated by the same parent company. The question is without the quota will CJ remain interested in production? If multiplexes are where the real money is earned (Korea is overly on its reliant theatrical sector), will they abandon production if the quota is lifted and concentrate on screening foreign films? Well, only if attendances to CJE films drop to such an extent that profits from a film import business would be greater. So it's really a matter of CJ deciding how to stock their theatres: with an import business or a domestic production business? The advantage of the production business is that a greater share of profit remains in-house. It's obviously advantageous for CJ to sustain a production business. They don't need the screen quota for that; they need commercial entertainment films that the mainstream audience wants to see (or, as we agree, independent films that can carve out a niche market on a platform or limited release).

X, I have no doubt that you're aware of the pragmatic answers to your rhetorical question, "how come proposals to cut the quota always come from conservative politicians from the economic sphere?" The interesting thing from a neutral perspective is that the call for protection of the screen quota on cultural grounds is obviously delivered from a position of interest, in this case a culturally nationalist one, that is equally radical and abrasive to some.

Finally, you mention TV as the cause for the decline of Korean film attendances in the late-1960s. I don't think there is a film industry in the world, including Hollywood, which was not similarly overwhelmed by the introduction of TV (most a bit earlier than in Korea). There is no causal relationship between that situation and the current screen quota debate; they comprise an entirely different set of circumstances. I think you aim to say that it's hard to predict what might happen if the quota comes down, and I agree with this entirely.

The screen quota is an emotional issue that brings a range of conflicting opinions to the surface. For this reason we need accurate information about the historical effects of the quota if we're to make balanced judgements and informed decisions regarding its future. Unfortunately, the CDMI has failed in this respect. In order to demonstrate that the screen quota has been an effective instrument in Korean cinema's revitalisation, there needs to be rather more compelling evidence than the CDMI has presented to us thus far. Without this evidence, it's impossible to mount a proper defence of the quota on the grounds that a protection of Korean screen culture has led to a commercial revival of Korean cinema. But if it hasn't done this, then what has it done? I don't know, and I'm yet to come across any satisfying account of the quota.

I am not against the screen quota, per se, but I do believe that it's unreasonable for the CDMI to keep asserting false claims for the purpose of stirring up emotion and for, presumably, sustaining its own existence and funding. On a simpler level: the CDMI has years to tailor its data, reports, and overall stance with regard to the quota, so why can't they develop an argument to prove that what they assert is correct? For me the answer isn't deafening, it's loud and clear: facets of Korean culture as they emerge in film texts have nothing to do with the commercial renaissance of Korean cinema.

Posted by: James Brown | Sep 29, 2005 10:27:49 PM

being 'neutral' about this sounds so noble and intellectual, but doesn't consider the end result. That end result being a supposedly 'free market.' If they eliminate the quota Korea will enter in a jungle where the most powerful (Hollywood) finds all the excuses to push their BS, whether people like it or not, with their limitless financial power.

I, for one, am willing to be called culturally nationalist if that means Korea will not become another Taiwan, thank you.

The moment Europe, Japan, China, South American and South East Asia form a coalition demanding the quota to be removed, then it would be intelligent to consider it. But for now it's only Hollywood trying to push their interest, blackmailing Korea into a corner. Is it even possible to be 'neutral' about that, unless you're part of the problem (people having interest in Hollywood gaining more power overseas)?

Hollywood dominates 80% of the film market already, so let's get off Korea and start worrying about making better films, rather than shoving them down people's throat with block booking, millions spent on aggressive marketing local markets cannot counter, and so on.

We don't need a 'reason' for the existence of the quota. We need a reason 'why' it should be taken off, other than the utopia of free market. To bow down to Hollywood so instead of 400 screens their latest BS Blockbuster gets 700? Why isn't China complaining, when they barely register a blip in the Korean market?

And regarding TV, why would that be irrelevant to this discussion? When Korean films fell out of favor with the local public in the early 90s, the audience moved to TV. TV Dramas actually improved from the early 90s on, with more people tuning in scoring record after record. People started considering Films as mere trash to watch once on video, and supported TV Dramas. Without the quota, Korean films would have done much worse than the 15 to 25% share they had back then. Much, much worse. Do I have proof? Well, do you even need one? We complain if films sell under 1 Million today, but there are scores of mid 90s Korean films which had a hard time selling *10,000*.

So if they take the quota off, who tells you people won't just go the TV way again and stop watching Korean movies? Anybody even having the minimum interest in Korean Cinema better hope nothing changes. Of course if all you need is a new flavour of the month from a country that's not the US, then defending/supporting the quota will never become a problem.

Posted by: Hwang Shin-Hye Band | Sep 30, 2005 4:30:51 PM

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