1. The number of loss-making Korean movies is on the increase
An increasing number of Korean movies are losing money due to a surge in the number of movies and sluggish overseas interest. The number of Korean movies stood at 87 last year and will set a fresh record this year with 87 already released between the beginning of this year and Oct. 31. It is to exceed 100. But less than 20 of them are likely to break even (last year it was 30 percent).
2. Exports are less profitable
Exports of Korean movies, which surged over the last few years, declined dramatically this year. Export contracts plunged 58.3 percent to US$17.42 million (W16.1 million) in the first half of this year from $41.81 million a year ago. Export price per movie also plummeted to $136,088 from $273,268 last year. One reason is that many are mediocre and rely solely on the appeal of soap stars popular abroad because of the Korean Wave in Asia. Production costs, meanwhile, are spiraling. In Japan, for instance, exports stood at $30.98 million in the first half of 2005. But the figure nosedived 71 percent to $8.72 million in the first half of 2006.
I’m afraid I don’t have any answers to offer, though a healthy domestic DVD market would surely help a little.
Update 22 December 2006: The Hankyoreh reports a decline in TV Drama export earnings as well.