How do you choose a movie to watch at a theater? Do you watch one that you really want to see or are you forced to choose one based on the cinema’s timetable? If you choose a movie according to the theater timetable, your choice may be being dictated by oligopolies in the Korean film industry. The Korean Film Council (KOFIC) published an annual report stating oligopolies, continue to plague the industry. They illustrated their point by saying the big 4 distributors, CJ E&M, Lotte Entertainment, Showbox, and Next Entertainment World were responsible for 12 out of the 20 most successful movies of the year.
So what allows the big 4 distributors to take more than half of the industry pie? KOFIC’s annual report points out the vertical integration of distributors and theatres as being the main source of this market stranglehold. Since the 3 multiplex franchises, CGV, Lotte Cinema, and Megabox, make up 97.1% of movie theatre sales, the success of a movie largely depends on winning timeslots on the franchises’ screens. Ridiculously, 2 of the big 4 distributors enjoy quite the privilege over their competition as one company runs both CJ E&M and CGV, while Lotte Entertainment and Lotte Cinema are also technically the same company. However, CGV and Lotte Cinema denied they gave priority to movies made by their affiliates. Despite this denial, data indicates that both companies assigned about 15% of their show time solely to affiliate distributors.
Because of these oligopolies, the rights of viewers to choose what they want to watch is being threatened continuously. They force consumers to choose movies according to the intentions of the main agent. ‘The Avengers: Age of Ultron’ and ‘A Violent Prosecutor’ are both distributed by influential corporations. Those 2 films were pre-released prior to the official release date for viewers willing to pay a preview fee available through pre-sales. The promotion was successful in attracting audiences and ‘The Avengers 2’ and ‘A Violent Prosecutor’ managed to take up about 70% of Korea’s movie screens when they officially hit the theatre.
If a moviegoer doesn’t have time to visit another theatre or is willing to stay up for a midnight movie, then the moviegoer is likely to choose what the big distributors want moviegoers to choose. Because big distributors’ movies take up the biggest proportion of movies, they usually fit to customer’s schedule. Thus, they are more easily chosen by customers.
Corporations with huge capital backing, like Fox and Disney, can cope with this situation. However, small scale companies must be satisfied with playing their movies late at night or early in the morning. Films distributed by small companies, usually low-budget movies, are pushed into the competition from an unfair starting line. This means that indie films have less exposure to market audiences. Ironically, theatres stop playing indie films soon after they hit the theatre because ‘not many movie-goers book tickets for low-budget films.’ However, CGV assigned screens for their affiliate movie ‘Masquerade’, also called ‘Gwanghae’ in Korean, for 4 months, even though it didn’t attract enough audiences to sustain that length of play.
If the movie market oligopoly is not resolved, it will eventually dry out the well of fresh idea for films. Art films are where movie directors and screenwriters can freely experiment with their stories. Those experiments sometimes inspire the whole industry. However huge companies always look for safety nets, even with arts, because they invest a lot in one project. Holding onto the safety net is safe yet boring, especially when it goes on for a long time.
Korea’s 2010’s movie industry can be compared to Hollywood’s 1940s oligopoly. In 1948, the US Supreme Court’s decided that movie production must be separated from distribution and screening. Known as the ‘Paramount Case’, the judgement resolved the problem of vertical market integration in the United States.
Fortunately, KOFIC and the National Assembly are aware of the severity of our film industry oligopolies. Two members of the National Assembly came up with amendments to the ‘Promotion of Motion Pictures and Video Products Act’. The essence of their proposed changes revolve around the Antitrust Act. More specifically, the proposed changes include clauses prohibiting one company to run both the cinema and distribution chains. The movie industry has a long way to go to producing a fair market for moviegoers’ choice, but if this legislation passes, it could be a great first step.