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Friend or foe?Does Korea¡¯s Internet help or hinder Hollywood?
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¡ã Film stills from James Cameron’s 3D blockbuster “Avatar,” which in the final week of January outsold his previous all-time worldwide grosser, “Titanic.” Photos courtesy 20th Century Fox

“The Phantom of the Opera,” “Spiderman 3,” “Transformers,” “Iron Man” and “Star Trek.”
These are just a few of the big budget Hollywood summer movies that premiered in Korea in the last couple of years, well ahead of their American openings.

Asian press junkets, usually thrown by the studios either in Tokyo or Hong Kong just a few years ago, are now being held in Seoul, bringing scores of Hollywood stars to the country. The private jets of Hollywood stars are touching down on the tarmac of local airports sometimes almost every week and it is not considered big news anymore among the local press. Hugh Jackman, who starred in the latest installment of the “X-Men” franchise, was seen on a couple of Korean television shows last year.

Korean cinema-goers, long accustomed to watching big American films usually one or two months after the U.S. theatrical release, are scratching their heads, asking why they are suddenly being given the unexpected bragging rights of viewing global premieres. “Avatar,” James Cameron’s 3D block-buster movie that this month dethroned his previous worldwide No.1 grosser, “Titanic,” was no exception. “Avatar” opened on Dec. 16 in Korea, a day ahead of the U.S. release due to time differences and well ahead of Japan (Dec. 23) and China (Jan. 2). (Sales of “Avatar” in Korea account for 5 to 6 percent of global sales.)

The reason for this recent turn of the events is seemingly obvious: Korea is now one of the fastest growing film markets for Hollywood studios. The country is the sixth-largest market as measured by the number of cinema-goers and the seventh in terms of total revenue, according to the Korean Film Council. Korean movie fans on average watched 3.1 films a year in 2006, the third-highest number after the United States (4.8) and Australia (4.0). “Transformers,” a Michael Bay film, for instance, grossed 8 percent of its global ticket sales in Korea, the second largest revenue for the film after America.

The recent boom in the local cinema industry is due in large part to the rapid proliferation of multiplex theaters. CGV, Mega Box and other multiplex theater brands account for near 99.9 percent of total screens in Korea. As many mall owners are beginning to understand the power of multiplex theaters in attracting a huge amount of foot traffic to their commercial estates, they usually offer substantial discounts in monthly rent to the theaters. Combined with the rising popularity of Korean films, Korea has established itself as the fastest-growing film market in Asia.


Still, Korea cannot compare with China and Japan in its market size and it will not surpass the two Asian rivals in terms of total cinema-goers anytime in the future. Considering its relatively smaller market size in Asia, the marketing budget set aside by the studios for the Korean premier event is nothing short of a splurge. Industry observers believe, however, that the studios are simply aiming to preempt rampant Korean file down-loaders by opening in Seoul first.

“Importers of foreign films usually set aside about 40 percent of its budget on marketing the films,” Hwang Ki Seop at CJ Entertainment told a local newspaper. “If file downloaders spread negative online reviews after watching movies well before the official opening date, it will turn away other theatergoers despite the heavy promotion.”

In fact, “Die Hard 4.0” and “Fantastic 4,” two Hollywood movies that opened in Seoul a week after their U.S. theatrical releases, failed miserably in the box office in 2007, despite the high expectations of local distributors. In less than a week, tens of thousands of illegal copies of these movies are believed to have been downloaded to computers via the extensive local broadband network, wreaking havoc on box office prospects.

Since illegal file downloaders have practically decimated the Korean video/DVD rental market, it is all the more critical for the studios to recoup their investment with the theatrical release.

Thanks to extraordinary promotional efforts, Hollywood studios actually increased their ticket sales in Korea by 30 percent in 2007, whereas Korean films were down by 5 percent for the first time since 1996.

While Korea’s renowned broadband infrastructure sent a devastating blow to the studios that have figured out its unique market situation rather belatedly, studios are beginning to understand that the online buzz machine in the bandwidth capital of the world can be much louder than elsewhere and conducive to earning free publicity.

Hundreds of thousands of online re-views are uploaded to film sites, Internet cafes and blogs just hours after the premiers, and the distributors can use the data to predict ticket sales elsewhere in Asia. Or they can fine tune the marketing messages based on the online feed-back. The real time screen-by-screen box office data collected by multiplex theaters is also valuable information for the studios when they open the same movie in Japan, China and other Asian markets a few weeks later.

Its extensive broadband infrastructure, combined with top class multiplex theater chains, has turned Korea into a favored Hollywood test bed for the bigger Asian market, providing insights as a market predictor. If reliable, all those promotional dollars spent on the star-spangled premiers in Seoul will be worthwhile. In short, the privileges of world premiers that Korean film fans are currently enjoying are given to them in return for their implicit contribution to Hollywood’s bigger Asian marketing campaign.

Is Korea’s Internet Hollywood’s best friend or foe? The answer: “It depends.”

Warner Home Video in 2008 closed its Seoul operation after practically losing the DVD rental market to rampant piracy, and decided instead to focus on distributing its product through MegaTV, KT’s IPTV network. Korea is the land of early adopters. So, instead of trying to fight the Internet, the studios are best advised to ride the crest of “freeconomics” that is Korea.

¨Ï Jeju Weekly 2009 (http://www.jejuweekly.com)
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