January 26, 2006


Korea has reduced its screen quota system by halfBowing to pressure from the United States, Korea reduced its screen quota system today by half. The screen quota system has been the backbone of the Korean domestic film industry since it was established in 1966 - requiring Korean cinemas to show Korean films for 146 days of the year (although with various provisions and waivers in place the actual number is 106 days per year). Starting July 1 that number will be cut in half and the required days will be reduced to 73.

Hollywood, via the MPA, has been pressuring Washington, DC who have in turn been pushing for Korea to eliminate the screen quota system. Ironically, they've cited Korean cinema's success under the screen quota system as proof that it should be eliminated, which angered director Kang Je-Gyu when Jack Valenti, former head of the MPA, cited the success of SHIRI as proof that there was no need for a Korean screen quota system.

The screen quota system has been one of the stumbling blocks in the US and Korea negotiating a Free Trade Agreement since 1999, and this reduction represents a major victory for Hollywood and for Korea's Finance Minister Han Duck-Soo who has pushed for this unpopular move, with his deputies stating that it only serves to protect a "special interest group" (the film industry) which sounds like familiar language to those who follow American politics.

The Korean film industry vows to fight to overturn this move, but it looks like it's too late.

As an American I'd just like to say that while I have a great deal of respect for the work of the MPAA (Motion Picture Association of America) the MPA (the international arm of the MPAA) makes me deeply ashamed. One of the most effective lobbying groups in the United States, the MPA has pushed to remove protections on the Mexican film industry when NAFTA was passed, and if you haven't seen many Mexican films lately that's because without government protection their industry went belly-up. They have established puppet groups in Canada that continually push to remove quotas to protect indigenous television stations and Canadian content on TV, and they have now succeeded in dealing a huge blow to Korea, all in the name of greed. Hollywood earned $8.8 billion dollars at the box office last year, and that's not including what the studios made from television, video and other streams of revenue.

Fortunately, UNESCO's recently passed Convention on the Protection and Promotion of the Diversity of Cultural Expressions was signed by every country except for the United States and Israel and now ten of those countries are reportedly discussing the possibility of implementing their own screen quota systems. I also ask any readers who think this isn't a serious issue to identify a country in the world whose domestic film industry accounts for half of its local box office and that doesn't have protective laws in place. India, China and Korea were all protected and they all have (or had) strong local film industries whether you like those industries or not.

I'll climb down off my soapbox now, and you'll have to excuse my frothing at the mouth. I've been passionate about this issue for years, and it really does worry me about the future of the Korean film industry. If you love movies, you want as many countries as possible making as many movies as possible so that you have as many options as possible for what you watch. I hate seeing something like this happen. I didn't even like that many Korean films in 2005 - but at least they were there to be loved or hated.

You can read Variety's extensive coverage and you can see a chronology of the battle over Korea's screen quota system here (just scroll about halfway down the page).

January 26, 2006 at 09:18 AM in News | Permalink


Disquieting news, to be sure. But I remember that not so long ago (late 2005 sometime?), a very knowledgable commenter at your blog posted some commentary arguing that the contribution of the quotas to the current renaissance is actually doubtful, and that Korean film seems to be doing extremely well due to other factors. He pointed out that on average, Korean theaters already show local product far *more* days per year than the quota requires, and has some other interesting arguments and statistics to back him up. Any chance you can track that down again and link to it for some context? I know I saw it in the archives just in the last week or two, as I hadn't checked out Kaiju Shakedown in a while and was catching up.

That said, I'm certainly not philosophically opposed to these types of quotas. Hollywood can whine about them when they stop strongarming other country's distributors with illegal-in-the-U.S. block-booking tactics, and when they stop steamrolling other country's movies using marketing budgets the size of the GDP's of some small African countries.

Posted by: Michael Wells | Jan 26, 2006 12:00:24 PM

Here's a link to a Korea Times article that addresses some of the points I brought up above. As you might expect, what effect this will have depends on who you ask.


By the way, Grady, it's nice to see that Variety seems to take a hands-off attitude to your (generally well-deserved) smackdowns of the American industry.

Posted by: Michael Wells | Jan 26, 2006 12:35:14 PM

Here's a link to the previous screen quota system discussion and, as you point out, there's a bunch of good points in here. In fact, I'm quite proud that this li'l ol' blog has hosted what may be one of the most cogent and thoughtful online discussions I've ever seen about the quota system in Korea. Yay good manners!


I would like to back up a point that I made there and that I want to make again. I don't think it's possible to prove beyond a doubt that the screen quota system is necessary in the current Korean film scene unless you do away with it and see what happens. However, I do think that a key factor (among many) in the Korean film renaissance of the late 90's was the fact that Korean theater owners were forced to take a chance on Korean films back when they were a relatively disreputable item and not as acclaimed and lucrative as they are now.

I also, despite reasonable arguments to the contrary, do not support eliminating or reducing the screen quota system simply because I can't see it serving any purpose whatsoever. It's merely bowing to pressure, and to me that's never a good reason for adjusting a system that's working fine.

Posted by: Grady Hendrix | Jan 26, 2006 6:36:18 PM

I assume what will happen over time is that smaller Korean films will either get many fewer screens or much shorter runs - to be replaced by US stuff - while the popular ones wull still get lots of play - thus producing a blockbuster mentality like HW now has - and taking fewer chances on smaller, indie type films. This along with apparently the slow death of the dvd biz could put a big hit on their financial health. Who owns the theaters in Korea though - I thought I had read that unlike here where they broke the link between the studios and theaters decades ago - that the Korean studios owned many of the theaters. If so that would be an offset to this - until the US begins building multiplexes on every corner.

Posted by: Brian N. | Jan 27, 2006 7:52:54 AM

Count me in the camp that says the screen quota was never more than fool's gold... a placebo. The screen quota did not prevent the Korean film industry from falling apart in the 1990s and it did not spur the comeback over the past six years. Co-incidence is not causal.

The No. 1 thing that has helped the Korean film industry (besides talent) is its vertical integration. As long as Korean film companies own the movie theaters it is in their best interest to have Korean films in their theaters.

What really bugs me is that empty-headed argument that the US majors will use their clout to multi-book theaters, force theaters to take on films they don't want in order to get the biggest Hollywood films. The best Korean films do better than the best Hollywood films. The average Korean film does better than the average Hollywood film. Many Hollywood films are no longer released in Korean theaters because they do so poorly here. Any theaters that buckled under Hollywood pressure would be economic morons.

In addition, the quota reduction is pretty minor. Officially, the quota was 146 days, but practically it was 106 days. Dropping to 73 days is not huge... especially when the government is offering $400 million to the industry (especially to smaller and art-house movies that the current Korean film scene tends to ignore).

I'm a big believer in supporting the arts... I just think there are many smarter ways to do so than a screen quota.

That said, just about the only thing dumber than clinging to the screen quota, imho, has been the US's push to get rid of it. The quota is a mirage that never effected Hollywood profitability in Korea. Indeed, despite Hollywood's relative decline in Korea, it still sells many, many more tickets in absolute terms than it did in the 1990s.

(sorry to babble on...)

Posted by: haisan | Jan 27, 2006 10:00:15 AM

Grady, I remember you posting back on the old MHVF board about how the fight over the Korean quota system was less about what movies got shown and much more about who owned the actual theaters -- i.e. there was a drive to install megaplexes in Korea. Am I misremembering?

Personally I hope that the US film industry is going to see some enormous blowups in the next decade, what with the changing of German finance laws, the closing of the video "window," etc. A more fragmented industry would see its lobbying power decreased overseas. (The free-trader in me is ambivalent about screen quotas -- there being a whole lot of terrible Canadian music and French films, for example -- while the film buff wants Jack Valenti to win as few victories as possible.) It's wishful thinking, but it keeps me reading Edward Jay Epstein every week or so.

Posted by: Jessica | Jan 27, 2006 10:50:08 AM

Personally, I blame the consumers. It's like how people say they want serious news, but then the celebrity crap and missing blonde girls get all the ratings. The movie companies are stupid, but they are also greedy, and if they thought they could make money by pushing more thoughtful movies, they would. People complain that their area does not offer any non-mainstream movie selections, but when someone does on rare occasion put up an art-house theater, it often does quite poorly... meanwhile people like up around the block for The Hulk or whatever piece of crap comes out, knowing full well the movie is going to suck.

Korea is pretty much the same, only instead of lining up for the latest Jerry Bruckheimer monstrosity, now they line up for bad gangster comedies done in their own language.

Hopefully, the success of Brokeback Mountain and Netflix can change things (in the US). And the Internet (everywhere), which makes word of mouth that much faster. One thing I like about Korea is how quickly word gets around -- along with pirated versions on the Internet -- making it much harder to Hollywood (and the Korean majors, for that matter) to fool the public.

Posted by: Haisan | Jan 27, 2006 4:00:34 PM

If Hollywood wants to remove this quota, it's not to make more money in korea. They are afraid of the spreading of this kind of protection and, maybe, of korean-type renaissance.

China has far more protective distributing system, and their market is much bigger than korean's. But MPAA doesn't worry about that, coz, contrary to koreans, chineses can not be a possibe rival yet. Koreans make their own blockbusters, some genre movies which have known big success in all asian coutries, some interesting minor movies, severel powerful 'auteuristic' movies. With all these things, Koreans want to be an another hollywood in Asia, and this means something even if it's just a dream.

Now american cinema dominates more than 80% of global market. But if all other coutries follow the korean way to establish a quota and to give some chance to their national movie industry? And if this temptative works in several coutries? It would be THE nightmare to MPAA.

This is a symbolic fight to both koreans and americans. Maybe to everybody in this planet.

Posted by: january | Jan 30, 2006 7:50:20 AM

A long time ago (1999 or 2000 I believe) I was working on an article about the fight over the screen quota system and I interviewed a guy at the MPAA for background. We were going to do a formal interview later, but then various outlets I was pitching the story to decided it wasn't that interesting after all and it died on the vine.

Curiously, what the guy said to me was that the theater chains would never build in Korea as long as Korea had a screen quota system and since the MPA had calculated that Korea was underserved as to number of screens they wanted to open more US multiplexes from the big chains over there, but the quota was a deal killer.

The other side of that statement is that at the time of this interview many of the major US theater chains were in real financial trouble. They had saturated the US with so many screens that the only way these exhibitors were making money is when they were building new multiplexes because the ones they had weren't doing enough business. So they were constantly looking for new markets to expand into and Korea was a prime market - except for that pesky screen quota.

Now whether this was just this guy's opinion or whether it was the actual position of the MPA is up for debate, but it does make some sense.

Posted by: Grady Hendrix | Jan 30, 2006 3:42:50 PM

What is our biggest national export? Media. When you download illegal MP3's and rip your friends' cds to your laptop, you are impacting an industry that serves as our national PR campaign. When you purchase blackmarket DVD's, you're undermining a studio's profits, and therefore creating less incentive for them to take chances on non-blockbuster projects.
I'm all for record labels and film studios raking in the bucks. But when these studios join forces under the MPA to push their weight around for the sole sake of profits in Korea, I take offense.
Asian cinema's new lightning rod has deservedly attracted the world's attention. Films such as "JSA," "Friend," and "Shiri" jumpstarted the new generation of Korea's success. Now, the industry has refined itsself and is possibly at the top of its cycle..."A Bittersweet Life," and "Sympathy For Lady Vengeance."
This evolution is amazing, considering that most Korean parents would never even consider allowing their children to go to film or acting school.
After their sons are finished with their mandatory two-year service in the ROK military, they are expected to find a career that will support the entire family...grandma, grandpa, mom, dad, and the future wife and kids. It's that filial piety concept that is just waaay too wacky for Americans.
Daughters, too, are expected to follow tradition. If a woman has not married before her thirties, she is considered by most Korean males to be undesirable. While there are more professional opportunities for women in Korea these days than there were twenty years ago, the professional woman is still a rarity.
We are putting a subtle, almost invisible chokehold on an industry in a culture that does not encourage artistic pursuits. Whether this will have a drastic, threatening impact on Korean cinema is a matter of speculation.
I believe it will, but we'll never have proof to condemn the MPA, the studios or the US-built megaplexes. The talented son or daughter who idolizes director Park Chan-Wook or actress Kim Yun-Jin, and has the potential to create the next masterpiece, may never have the opportunity to do so. Parental disapproval and filial piety will steer the course of many young Korean people's careers away from film.
The Korean government is half to blame for taking this bribe from Hollywood. Unless they or Hollywood or someone else starts providing scholarships for film students and drama majors, the talent pool will slowly dry up. By removing the quota, we have, in the end, removed the incentive and the dream.
You can't blame Korean culture and Korean parents for this...these are the things that make Korean cinema so interesting and unique. But what we can do is take a moment to reflect on the fact that our culture DOES support pursuing the dream.
We almost have too many choices and opportunities, in that it renders some of us as ineffective and unproductive members of society. But those who dare to visualize and take the comparatively culturally unimpeded steps to carry out and attain their goals will continue to be the backbone of our greatest national export.
Hollywood imperialism rules, but not when it meddles with and impedes another country's industry of opportunity. Dear MPA, you are acting disgracefully.

Posted by: James | Jan 31, 2006 2:37:58 PM

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