6-Month Limited 'Youngbal Fund'... Extension as Is Is Difficult

Bill to Extend Fund for 7 Years Pending in National Assembly Ahead of December Expiry
Calls to Abolish or Redesign Fund Amid Growing Theater Deficits: "No Benefits Due to Large Corporations"
Yeongjinwi Admits Neglect in Screening Support: "Fund Extension and Government Contribution Urgently Needed... Theater Support Measures Required"
Appeals for Support as Part of 'Youth Employment'... Fund Contribution to Provide Low-Interest Loans

On the 18th, CGV Yongsan I'Park Mall in Seoul was less crowded than usual. On this day, CGV announced that it will raise movie ticket prices by 1,000 won starting from the 2nd of next month to overcome the crisis caused by the prolonged COVID-19 situation. Photo by Moon Honam munonam@

The Korean Film Council operates with the Film Development Fund, which is a levy equivalent to 3% of movie ticket sales. It is used for supporting the creation and production of Korean films, investing in specialized video investment associations, supporting the production of small and short films, and improving welfare. The Film Development Fund collected about 54.6 billion KRW in 2019. Last year, it dropped to about 10.4 billion KRW due to a roughly 74% decrease in moviegoers compared to the previous year caused by the spread of COVID-19. The levy rate was also lowered to 0.3% for nine months. While income decreased, expenditures actually increased. Last year, the Korean Film Council's budget (101.5 billion KRW) exceeded 100 billion KRW for the first time. This year, it is 117 billion KRW. By the end of the year, about 71 billion KRW remains in the treasury. Without government support, it is impossible to guarantee next year.

There are more problems. The levy on the Film Development Fund will end this December. Originally, it was set to expire in December 2014 but was extended once. At that time, there was little opposition from the theater industry because the film industry was rapidly growing, so the burden was lighter. Now, with COVID-19 causing severe losses, the situation is different. All three multiplex chains (CGV, Lotte Cinema, Megabox) are suffering serious deficits. CGV's operating loss last year was 203.6 billion KRW. Lotte Cinema and Megabox recorded losses of 160 billion KRW and 68.2 billion KRW, respectively. This year, the situation has not improved. Despite forced early retirements, temporary business suspensions, and voluntary unpaid leaves, deficits persist. Due to fixed costs such as rent and management fees, rumors of sales have even surfaced.

Oh Hee-seong, head of sales at Lotte Cultureworks, stated, "The money earned over 10 years evaporated in the past year." Jo Sung-jin, CGV's strategic support officer, said, "It will take at least 10 years to recover to pre-COVID-19 levels." A screening industry insider, Mr. A, lamented, "Even if COVID-19 ends, the challenges are immense. With the establishment of online video services (OTT), the 'holdback' (the time it takes for content secondary rights to transfer from one place to another) has become meaningless. We can no longer expect the heyday when films attracted 10 million viewers."

A bill to extend the collection of the Film Development Fund by seven more years is pending in the National Assembly. Another bill has been proposed to add a reason for exemption from the levy if the number of moviegoers decreases by more than 50% compared to the previous year. Many members of the Culture, Sports and Tourism Committee, including Park Jeong and Yoo Jeong-ju (Democratic Party), consider the extension of the levy collection a given, citing the lack of alternatives.

On the other hand, the screening industry argues for the abolition or redesign of the Film Development Fund. It is not only due to management difficulties. The screening sector, as the actual payers, has hardly benefited from the fund. Article 25 of the 'Act on the Promotion of Films and Video Materials' specifies that the fund should be used for 'supporting the repair, maintenance, and improvement of movie theater facilities.' However, theaters have been excluded from support simply because they have high sales.

Screening industry insider Mr. B said, "The French government's support for digital projectors is like a dream to us," adding, "Except for independent film theaters, no support can be expected." Another insider, Mr. C, pointed out, "There is no interest at all in improving the environment of movie theaters, which are closest to the audience," and criticized, "The policy of reverse discrimination has not changed before and after COVID-19."

The Korean Film Council acknowledges that support for the screening sector has been minimal. Kim Young-gu, head of the Planning and Budget Team, admitted, "Complaints are understandable," and confessed, "Because they are affiliated with large corporations, support has been somewhat neglected." Another official said, "There has been a prevailing atmosphere of excluding movie theaters from policy meetings," and added, "Not a single screening industry representative has been mentioned in the selection of the Korean Film Council chairman or non-standing members."

A movie theater in Seoul city is less crowded than usual on the 7th, a day before the government implements the 2.5-level social distancing measure in the metropolitan area. Photo by Mun Ho-nam munonam@

The Korean Film Council insists that not only the extension of the Film Development Fund but also government budget contributions are urgently needed. Kim said, "In France and Germany, the government directly collects related taxes to secure funding for film promotion," explaining, "Especially in Germany, there is a separate dedicated film industry agency (Federal Film Board) like ours, which handles various support projects." He added, "In the UK, the film association operates separately, and its budget sources are diverse, including government subsidies, lottery funds, self-generated revenue, and sponsorships," and "Each source is designated for specific projects, allowing for broad support."

If the biased support structure had been changed, opposition from the theater industry could have been eased. CGV also pays the Film Development Fund at Art House, a dedicated independent art film theater. Art House is not subject to the levy because it screens independent art films recognized by the Korean Film Council for more than 60% of its annual screening days. Hwang Jae-hyun, head of PR, said, "It was a concession made out of consideration for the film industry," and expressed hope for appropriate execution.

The Korean Film Council is contemplating support measures for theaters. Kim said, "Movie theaters account for 60% of jobs in the film industry," and added, "We are persuading the Ministry of Economy and Finance from the perspective of youth employment." Regarding financial support, he explained, "Representative Park Jeong's office has proposed an amendment to the Film Promotion Act, which includes the Film Development Fund contributing a certain amount to the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation, allowing small film businesses to receive guarantees from one of these institutions and obtain low-interest loans." He pledged, "Even after the impact of COVID-19 subsides, we will strive to improve theater environments and provide technical support."

This content was produced with the assistance of AI translation services.