February 8, 2008
Slumping Korean biz in fund freeze
As profits cool, productions look for financing
By PATRICK FRATER
MISSED TARGETS: Kim Jee-woon's highly anticipated
'The Good, the Bad, the Weird' is just one of many films
affected by a recent downturn in the Korean film industry.
HONG KONG -- At the Bucheon festival last summer, filmmakers including "Oldboy" helmer Park Chan-wook sat onstage and reflected on the mass of projects they had been talking up in a docu that lensed in fall 2005 about Korean cinema. By the time the pic was completed, the "Korean Wave" had crashed and the helmers were largely idle.
"Eighteen months ago we were working like crazy, we could scarcely find time for your interviews," helmer Ryu Seung-wan says. "That was then, this is now."
A further nine months on and the Korean industry is buried still deeper in its collective funk. Troubles have little to do with the global credit crunch or fears of a recession, and everything to do with the twist of another roller-coaster cycle in the local industry. Films that were greenlit when the market was rising have spilled much red ink by being released when the market was falling. Only 10 pics, including "May 18" and "200 Pound Beauty," passed the 2 million admissions mark, generally considered the breakeven point for a commercial movie.
Korean B.O. dropped in 2007 for the first time in a decade. Market share for local productions fell. So too did exports. And with profitability plunging, production finance has become much scarcer. Everyone has become much more cautious, say producers, distributors and sales folk alike. Others describe coin as "frozen."
Evidence for this is littered around the scene. Many of the mini-studios, such as MK Pictures or Show East, with combined production, distribution and sales, have drastically scaled back their activities. At the larger end of the scale, Lotte and Mediaplex, two of the integrated film groups belonging to diversified industrial consortia, have cut back their movie production and finance activities.
Midyear 2007, Mediaplex sold off its Megabox cinema chain and saw its Showbox production-distribution unit pull out of the most anticipated film of 2008, Kim Jee-woon's spaghetti Western homage, "The Good, the Bad, the Weird." Meanwhile, the company took a bath with its share of $70 million monster movie "D-War," even though the pic was a $50 million hit.
Venture capital funds, by far the biggest source of production coin for much of the last decade, have also been badly hit. Though their losses are split with a government body, some ceased investing. Others have stopped trying to pick winners from among the industry and instead have become inhouse funds tied to a single shingle.
Worst off have been the production and talent management companies that were listed on the stock exchange: Poibos, K & Entertainment, Nubotek, Popcorn Film and Prime Entertainment. Blamed for talent price inflation and the 2006 production bubble, many of these have retreated from the stock markets as best they can.
But if everyone is hurting, some see a leaner and smarter industry emerging. The buzz is now all about risk-sharing. CJ Entertainment has stopped routinely seeking stakes of up to 30% in the films it picks up for distribution, become more careful about genre and imposed caps on the amount it commits to each picture it produces.
The two biggest hopes are for smarter VC funds and for the telecoms players finally to start delivering on their promises. There is progress in both cases.
On the funds front, Hanhwa quickly used up its $10 million fund operated by its ad agency subsidiary Hancomm, but it is now preparing to launch a $20 million pool in tandem with the Industrial Bank of Korea.
Vantage Holdings has taken advantage of its late entry into the sector to cherry-pick filmmakers and projects. "We got to see every single script on the market," managing director Kim Sunyong says.
Operating two separate funds, with different information technology and cable industry backers, it has set up a dozen production and management companies as partnerships with helmers and also runs a script development unit. And it will apply "slate funding" (aka "portfolio theory") principles by investing in eight to 10 movies a year.
Its first two pictures, released in November and December, disappointed, but company and industry alike have high hopes for "The Chaser," an actioner set for release this month helmed by Na Hong-jin.
This month will also see a better test of what the telcos can do with their deep pockets and the cross-marketing potential that comes in cell phone-crazy Korea. Both SK Telecom and Korea Telecom have backed movie production companies in order to get their hands on content for use by their mobile TV operations (which count more than 8 million subscribers) and on their IPTV platforms -- if and when they are allowed to launch them.
Other producers have given the telcos only a cautious embrace as distribution has been a weak point and the flow of coin to date has been more modest than many expected.
But, proving that there is still some competitive bite in the Korean market, the two are going head-to-head as theatrical distributors. On Jan. 30, SK Telecom finally did what it has been threatening to do for several months, launching its own theatrical distribution unit, CH Entertainment, putting out the hotly anticipated "Once Upon a Time." The very same day Sidus FNH (backed by KT) countered with release of "Radio Days," having made its first theatrical move in December with "Prudent Miss Shin" and its second with hit "Women's Team Handball."
Source: Variety.com
http://www.variety.com/index.asp?layout=festivals&jump=features&id=2894
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February 7, 2008
Suh launches Fine Cut as new indie sales outfit
Written by Patrick Frater
BERLIN -- Suh Young-joo has quit Cineclick Asia, formerly Korea's leading indie sales agent, and will regain her independence with new outfit Fine Cut. Suh was instrumental in discovering and promoting many of the talents, including "Oldboy" helmer Park Chan-wook, Kim Jee-woon and Kim Ki-duk, whose creativity drove Korean cinema to the cutting-edge global position it currently enjoys.
Her new shingle's Berlin slate is bursting with 17 titles, most in post-production, including a handful with serious Cannes potential. These include Siddiq Barmak's "The Opium War," Pablo Trappero's "Lion's Den," festival fave Zhang Lu's "Iri" and stylish actioner "The Chaser."
New company sets out to be sales agent, film investor and will dabble in highly selective acquisitions for the Korean theatrical market. It aims to represent 10 completed films per year.
Suh remains a consultant to Cineclick in the near term and will assist Cineclick's remaining staff at Berlin's European Film Market.
Launch of Fine Cut follows less than a year after Suh sold Cineclick, which she founded six years earlier, to stockmarket-listed mini conglom Fantom Entertainment (Variety.com, March 20, 2007).
That sale was intended to provide Suh with coin to invest in a slate of international indie titles that would counterbalance Cineclick's pic supply from Korea. Arrangement quickly went sour when Fantom's share price plunged and financing for project investment through Cineclick dried up.
"I now aim to discover a new chance of working with various directors, producers and industry people all around the world," Suh said. "That was the driving force behind Cineclick Asia for years, and I want to regain my original motivation."
New company starts life with a six-title output deal with Vantage Holdings, currently Korea's most active movie investor; a two-picture deal with Barunson; as well as a string of single-picture deals with other Korean producers.
New titles on offer include "My Dear Enemy," a drama starring Cannes actress prizewinner Jeon Do-yeon; North-South drama "The Crossing," helmed by Kim Tae-Kyun; and "One Day of Ibrahim," a Kenyan-set road movie by Hong Kong helmer Pang Ho-cheung. Fine Cut also has "Room of Dreams," a sci-fi horror feature that was pitched at last month's CineMart in Rotterdam and has Asian superstars Rinko Kikuchi and Tadanobu Asano in advanced negotiations to star.
Suh has been able to transfer certain titles from Cineclick to Fine Cut, principally those in which she has been an investor, but may lose control of others. These include "The Good, the Bad and the Weird," Kim Jee-woon's Korean Western, which is the highest-profile Korean film of 2008. Pic, which lensed in China, has exceeded its budget. Producer Barunson is seeking additional financing and has brought in CJ Entertainment, but long-term representation of international rights is currently undetermined. Fine Cut is also managing Cineclick's library in the short term.
Source: Variety Asia
http://www.varietyasiaonline.com/content/view/5461/
