As audiences remain glued to YouTube and Netflix, visits to cinemas have dwindled, prompting the government and film policymakers to roll out a series of measures to rescue a struggling industry.
“The biggest challenge is that audiences now draw a very clear line between what they are willing to watch in theaters and what they prefer to stream at home,” said Kim Bo-yeon, director of the Policy R&D Department at the Korean Film Council (KOFIC).
“Viewers go to theaters only for blockbusters, while everything else is pushed to OTT platforms,” Kim told AJP. “As attendance declines, production companies are reluctant to invest in large-scale films because there is no guarantee they can recoup costs. Naturally, the market has shifted toward mid- and small-budget projects.”
To counter the downturn, KOFIC plans three major initiatives starting in 2026.
The first is expanded support for project development, or what Kim calls “lineup development,” which allows production companies to receive funding for multiple projects rather than on a title-by-title basis. The goal is to strengthen studios’ long-term planning capacity and reduce risk concentration.
Second, the agency plans to double support for mid-budget commercial films, raising funding from 10 billion won this year to 20 billion won next year, in an effort to rebuild the industry’s hollowed-out middle tier.
The third pillar focuses on independent filmmaking, which Kim described as “the foundation of Korean cinema.”
“We will actively support independent filmmakers so their creative work and distribution channels can recover,” she said.
Subscription theaters and shrinking output
Separately, the Ministry of Culture, Sports and Tourism is considering a subscription-style program for cinemas starting in 2027, modeled loosely on streaming services. Under the proposal, moviegoers would pay 15,000 won ($10.40) to watch four films — roughly a quarter of the current per-ticket price.
Whether such incentives can lure audiences back remains uncertain, as viewers increasingly complain that recent theatrical offerings are not compelling enough to justify a trip to the cinema.
Industry data underscore the severity of the downturn. Only around 20 Korean commercial films were produced in the first half of 2025, barely above the pandemic low of 2021 and far below the roughly 60 titles released in 2019.
There was also no domestic film this year that surpassed the symbolic 10 million admissions mark. For the first time, a Japanese animation — Demon Slayer: Kimetsu no Yaiba – Infinity Castle — topped the Korean box office, drawing 5.65 million viewers.
Today, nearly 40 percent of Koreans subscribe to three or four streaming platforms, reflecting how deeply on-demand viewing has reshaped consumption habits.
The global success of Netflix’s K-pop Demon Hunters, which surpassed 314 million views by September, has reinforced the sense that cultural gravity is shifting decisively toward streaming platforms. Reports of a potential acquisition of Warner Bros. Discovery by Netflix have further heightened concerns about an emerging OTT monopoly — anxieties now acutely felt in South Korea’s once-dominant film sector.
Even established auteurs are increasingly opting for streaming-first releases. Veteran director Lee Chang-dong is reportedly preparing his next film, Possible Love, for Netflix rather than for theatrical release.
“I was shocked to hear that even Lee Chang-dong’s film may not be shown in cinemas,” said a film director who requested anonymity.
“If his work moves online, what future is left for theaters? It’s a frightening thought.”
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