Hollywood no longer rules South Korean cinema, which is breaking out all over. Since 1999 Seoul filmmakers have been churning out Asia’s first critically acclaimed blockbusters, and “Silmido” and “Taegukgi”–featuring battle scenes that rival “Saving Private Ryan’s” are the most stunningly good examples to date. Korean leading men like Won Bin of “Taegukgi” and Sol Gyeong-gu of “Silmido” have bright side careers promoting Korean products all over Asia. Korean heartthrob Bae Yong Joon, star of a clever remake of “Dangerous Liaisons” set in 18th-century Korea and called “Untold Scandal,” is mobbed like a rock star all over Asia. In the way Americans tour Hollywood, Asians visit Korea to see sites featured in their favorite movies.
Korea once looked to America for ideas, but now the reverse is also true. Hollywood is snapping up remake rights to dozens of Korean films. Hip-hop star Queen Latifah’s next project is a redo of a Korean smash hit, “My Wife Is a Gangster.” Madonna’s Maverick Films is remaking the horror flick “Phone.” And DreamWorks recently bought the rights to the moody horror blockbuster, “A Tale of Two Sisters.” To capitalize on all the attention, South Korea has moved aggressively to cast itself as the center of Asia’s film market.
The Seoul government and industry leaders are working to position the Pusan Film Festival as Cannes East, the festival where deals get gone, a one-stop venue where moviemakers can shop for financing, exports, even locations. In preparation for the next Pusan festival this fall, delegations from Indonesia, Malaysia, Taiwan and all over Asia have been flocking to Seoul to study the Korean film renaissance. “We look at Korea with an envious eye,” says Hong Kong producer Bill Kong (“Crouching Tiger, Hidden Dragon”), who recently began distributing Korean films and coproduced “Windstruck,” an upcoming romantic comedy featuring Korean starlet Jun Ji Hyun. “Filmmakers and audiences have found a real vibe between them, like in the 1970s and ’80s in Hong Kong,” he says.
What is little understood even within Seoul’s film circles is the extent to which today’s success is an outgrowth of the 1997-98 Asian financial crisis. Before the crisis, Korea’s big conglomerates, or chaebol, dominated the industry–churning out B movies on tiny budgets. The chaebol were leaders in the production of blank videotape and VCRs worldwide, and often owned video distributorships at home; their main interest was to fill empty tapes, video-store shelves and theater screens with cheap entertainment. Geared to maximize output, they couldn’t stave off Hollywood, which took as much as 80 percent of the Korean market in the 1990s. When the International Monetary Fund bailed out South Korea in 1997, it demanded that debt-soaked conglomerates like Hyundai, Daewoo and Samsung retreat from peripheral businesses. Most spun off filmmaking subsidiaries, ending the chaebol hold on film financing.
The upheavals quickly spread. The cozy deals the chaebol had forged with theaters and video-rental shops in the provinces were exposed as inefficient. (In most cases, films were sold for a low flat fee–insulating the maker from steep losses but giving most of the profits to end-sellers, not producers.) Small, family-run and chaebol-backed production companies began to give way to independent firms that function like Hollywood studios: each produces multiple films each year and distributes them nationally. In short, a high-stakes industry rose from the rubble of the low-risk, low-return film business of old. “The old generation faded, and the new generation started producing more commercial works,” says pioneering director Kang Je Gyu, 42, director of “Taegukgi.” “In film, like in other businesses, only the strong survive.”
Today the major players are publicly listed companies or are trying to get listed, with one focus: making money. One of the leaders is CJ Entertainment, which produced “Untold Scandal” and went public in 2002. Its main rival is Cinema Service, founded by “Silmido” director Kang Woo Suk in 1993. “My goal was to make Cinema Service Korea’s first professional distribution company,” says Kang. Similar motives inspired Kang Je Gyu, who set up his own production company in 1998 with, he says, the ambition of making commercial movies “to save Korean film.”
It is still an uphill struggle. The annual receipts of Korean films ($580 million) are gaining on those of Asia’s largest film industries: India ($820 million) and Japan ($1.93 billion). Yet Seoul financial markets still tend to see movies as a cultural venture, not a business. Despite the success of “Taegukgi,” KangJeGyu Films had to team up with another filmmaker and an auto-parts manufacturer in a new company called Buffalo MK in order to win a listing on the stock market last month. Such strange pairings have become commonplace as filmmakers take on any partner who can help them go public. “It’s not a business, it’s a crazy gamble,” says Stephen Kim, president of Aura Entertainment, which last year lost about $2 million on an animated feature, “Wonderful Days.”
The new business partners are no longer dumbing down Korean film. While many Koreans still resent the humiliation of what they call the “IMF crisis,” the fund’s demands for reform wound up freeing filmmakers to pursue both profit and quality. New directors, sexier scripts and bigger budgets released a creativity last seen in the 1960s, when Korean film was almost a lunatic fringe of innovation. The authoritarian regimes of the 1970s and ’80s quashed the imagination out of Korean film, and the transition to democracy in the early 1990s did little to revive it. Filmmakers continued in a formulaic rut despite the official end of censorship, while half the country’s theaters vanished amid urban renewal.
The postcrisis revival is bringing back the creativity of the ’60s in more marketable forms. Korean films have captured a rising share of the local market since 2000, edged across the 50 percent threshold last year, and shot up to 70 percent in the first three months this year. Exports are booming (chart). “A lot of young people are coming up with outrageous ideas. They’re starting to make really different films,” says Catherine Park, head of international business at Tube Entertainment, one of the new production companies. “If you have the talent to make a commercial film today, nothing else matters.”
The Asian crisis also forced film entrepreneurs to rely on Korean talent. The sharp drop in the value of the won made it prohibitively expensive to buy the rights to Hollywood films, which was how many Korean film entrepreneurs got their start. In 1999 Kang produced South Korea’s first homegrown blockbuster: “Shiri,” in which a hunky secret agent tracks down a gorgeous North Korean assassin. “Shiri” cost $3.5 million but earned 10 times as much in ticket, video and export sales. “It restored the Korean people’s trust in their own film industry,” says Tube’s Park. More important, it beat out “Titanic” to become the biggest hit ever in the country.
Inspired, newly independent production companies scrambled to deliver the next blockbuster. When cash ran short they discovered that “Shiri’s” popularity had emboldened venture capitalists to speculate on big-budget movies. The team behind the 2001 hit “My Wife Is a Gangster” funded its $2.8 million budget by selling thousands of shares on the Internet (many, say industry watchers, snapped up by real gangsters). It took in $31 million at the box office.
Once geared to cruise at a leisurely pace, the Korean film industry now weeds out flops early and often; seven in 10 films don’t break even today. Marketing budgets have soared above $1 million per film, more than triple the late-’90s average, as promoters push for Hollywood-style openings. Since 1998 the number of screens has rebounded, doubling to more than 1,100, as state-of-the-art multiplexes replace dingy concrete boxes dating from the 1970s and demand blockbusters to fill the seats. “Silmido” opened on 450 screens and earned $9.6 million its first weekend. “It’s funny,” says Kang of his new hit. “Ever since the industry reformed, it has become more and more like America. Theaters will cut movies [that open badly] almost immediately because there are so many other films waiting to run.”
Ironically, most Korean filmmakers don’t yet see themselves as the liberated offspring of global free markets. They still support a Korean quota that guarantees domestic movies about 30 percent of all public showings each year, even though Korean films now dominate the box office. Many back subsidies for “cultural industries” even though commercial films don’t receive handouts. Most share the fears of counterparts from Taiwan to Mexico who see Hollywood as a mortal threat to local culture.
Yet outsiders are beginning to view Korea as a model for survival. The Asian film delegations arriving in Seoul now recognize how backward the region’s other major markets are in comparison. In Japan, actors are still weekly contract workers in a studio system reminiscent of 1950s Hollywood. In India, film companies still distribute movies to regional monopolists for a flat fee. The lesson of the Korean revival is that money should be channeled both into films and into multiplex theaters that can sustain a blockbuster culture. “The economic crisis spurred [the Korean film industry] to do things they would have done anyway, but they did it faster,” says Tami Overby, executive director of the American Chamber of Commerce in Seoul. “It is no coincidence that Korea is now a global leader.”
Kang Je Gyu’s marketing of “Taegukgi” offers a blueprint many in Asia could follow. The $15 million film faced a do-or-die premiere in February, when “Lord of the Rings: The Return of the King” was still in theaters and “Silmido” was breaking box-office records. Industry insiders thought the audience for blockbusters was spent. Kang’s response: a gala opening at Seoul’s ritziest theater, with A-list celebrities walking the red carpet and thousands of giddy fans in attendance. “Taegukgi” had a record-breaking debut on more than 500 screens, and earned $10.7 million its first weekend.
Kang wasted no time in the limelight. Last month he listed his company on Seoul’s Kosdaq exchange to raise money for new projects, which are shrouded in secrecy. All he will say about his next script is that it will entail “global storytelling”–a clear hint that Korea’s pioneering director has set his sights on the world.
