South Korean films are drawing audiences once again. Following the success of "If We" and "The King’s Affection" earlier this year, the summer market has seen Na Hong-jin's new film "Hope" quickly surpass 2 million viewers, making it the fastest film to reach that milestone among this year's releases. However, the resurgence in audience numbers does not necessarily indicate a recovery in film production. Last year, South Korean film revenues and audience numbers dropped by 39.4% and 39.0%, respectively, with the average estimated profitability of commercial films plummeting to minus 33.13%. While audiences are returning to theaters, the production sector still faces challenges such as reduced investment and rising production costs.
In response to this situation, the government, production industry, and talent management agencies have initiated a collaborative effort to revitalize film production. On July 16, the Ministry of Culture, Sports and Tourism and the Korean Film Council signed an agreement at the National Museum of Modern and Contemporary Art in Seoul, involving major management companies and film production organizations.
The agreement's key point is to ensure that the individual appearance fees for lead and supporting actors in films selected for the Korean Film Council's "Mid-Budget Film Production Support" program are set at less than 10% of the net production cost. Although the agreement is a voluntary accord without legal binding, it differs from previous production support initiatives as it involves discussions on improving the production cost structure with the participation of actors and management agencies.
The scale of government support has also increased. The mid-budget film production support program, which was established last year with a budget of 10 billion won, has been expanded to 46 billion won this year. Production companies, management agencies, and investment distribution companies will discuss detailed operational plans necessary for the production of supported films through a privately-led autonomous council.
During the signing ceremony, the government and the Korean Film Council identified the inability of projects to enter the production stage due to production cost structures as a major issue. Minister of Culture, Sports and Tourism Choi Hwi-young stated, "This is a warm solidarity and a courageous, mature decision to not only reduce production costs but to work together to revive South Korean cinema. We will spare no policy support to ensure that the government's financial assistance and the commitment of filmmakers can create a synergistic effect."
The Korean Film Council views this agreement as a starting point for voluntary discussions linked to the mid-budget film production support program rather than a mandatory regulation. The agreement applies only to films selected for the mid-budget film production support program, which will be fully operational this year. It is explained that the production companies and management agencies will negotiate based on the specific conditions of each project during the actual production process.
A representative from the Korean Film Council clarified that the 10% appearance fee guideline does not mean that this amount must be strictly adhered to. Instead, it aims to establish reasonable actor fees within the net production cost, tailored to the scale of the project and market conditions.
There is an expectation that the autonomous council will be operated around the participating entities of the agreement. Currently, the structure involves production organizations, management agencies, and investment distribution companies, with specific operational methods likely to be established during the production process of supported films.
In the management sector, there is a sentiment that this agreement should be seen more as a policy signal for supporting the film industry rather than an immediate change to the production cost structure. While the government's expansion of the mid-budget film production support budget and the establishment of a discussion platform for production companies and management agencies are significant, the actual impact will need to be assessed during the production of supported films.
A representative from a management agency remarked, "We interpreted this as a call for the government and industry to discuss improvement measures together to revive the film industry. The government’s commitment to increase funding and support can be seen as a signal of continued support for the film industry."
However, they added, "The effectiveness of this will depend on observing the actual production process of supported films, and the appearance fee guidelines should be flexibly applied according to the market situation and characteristics of each project."
Some voices suggest that the intent behind the guidelines and their actual effects should be viewed separately. While the willingness of actors and management agencies to share the burden of production costs is meaningful, there are concerns that merely adjusting appearance fees will not significantly change the production environment for mid- to low-budget films. Particularly, mid- to low-budget films often align appearance fees and production scales from the planning stage, raising questions about whether these guidelines will lead to immediate cost reductions.
A representative from a film production company stated, "The intent of actors and management agencies to share the burden of production costs is significant, but if it is not common for lead actors' fees to exceed 10% of the net production cost, the actual cost-saving effect may be limited."
They emphasized, "Revitalizing mid- to low-budget film production cannot be solved by just one aspect of appearance fees; it must also consider the investment structure, production methods, and post-production costs. Simply providing support funds will not lead to revitalization, so it is crucial to create a structure that allows investors and production companies to take real action."
This year’s successes of "If We," "The King’s Affection," and "Hope" demonstrate that audience demand has not completely vanished. However, it is premature to conclude that the production sector is recovering based solely on the performance of a few films.
This agreement marks the first step toward revitalizing the stagnant production sector. However, as it is a voluntary agreement limited to government-supported projects and given that the rise in production costs is not solely due to actor fees, it remains to be seen whether adjusting appearance fees will lead to actual production starts and increased investment. To ensure that the audience rebound is not a one-time success, discussions must continue regarding the overall production process, including support expansion, investment structures, production methods, and post-production costs.
* This article has been translated by AI.
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