[The Crisis of Korean Cinema] Only One Week in Theaters, Then Locked Away for Six Months... Holdback Bill Divides the Film Industry

A view of a movie theater in Seoul. Photo by Yonhap News

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A single bill related to the film industry is stirring up the sector. The bill in question is the "Partial Amendment to the Act on the Promotion of Motion Pictures and Videos," proposed by Assemblywoman Oh Kyung Lim of the National Assembly's Culture, Sports, and Tourism Committee. The bill stipulates that, after a movie's theatrical run ends, it cannot be supplied to any platform for the following six months. The stated intention of the bill is to protect movie theaters. However, aside from theaters, the rest of the film industry opposes it.

The core of the theater side's argument is survival. They claim that the trend of films quickly moving to IPTV or OTT platforms as soon as they leave the screen leads to audience attrition. They believe that if a six-month holdback is guaranteed by law, audiences will have no alternative but to visit theaters, which could bring them back to cinemas. They are also concerned that the holdback period could be further shortened due to the financial power of global OTT platforms.

According to a major cinema chain official, "Recently, 'Huminteu' was released on Netflix less than two months after its theatrical premiere. In a situation where global OTT platforms are scrambling to secure content immediately after release, asking only theaters to hold out is unreasonable." They emphasized, "The survival of theaters is essential for the survival of Korean films. Legalization is a matter of survival."

However, production, distribution, and independent film circles have a different perspective. They argue that the crisis faced by theaters is not due to a shortened holdback period, but rather seat monopolization and early termination of screenings. In fact, according to a survey by the Korean Film Council, a short holdback was not among the top reasons audiences avoid theaters.

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Legalizing the holdback could also be a barrier for consumers. If a movie is screened in theaters for only one week and then locked up for six months, audiences would not be able to watch it either in theaters or on any platform during that period. The head of an independent distribution company pointed out, "It makes no sense to demand a six-month holdback after just one week in theaters from the consumer's perspective. If a film that was barely screened in theaters is locked away for six months, audiences will forget about it and producers will end up penniless." A film director also asserted, "In the current environment, even if a movie stays in theaters for more than two weeks, it is impossible to recoup production costs without revenue from OTT or IPTV."

Supporters of the bill cite the French example. In France, a holdback period of 22 months between the end of a theatrical run and free streaming is established by law. However, the French model does not simply block platform supply. It also includes a funding structure that requires broadcasters and OTT platforms to invest in French film production. This interconnected structure is missing from the bill proposed by Oh Kyung Lim. The bill only includes distribution restrictions, with no provisions to compensate for the resulting losses.

The head of a mid-sized distribution company said, "If we want to adopt the French model, we have to bring in the entire structure. If only the holdback period is extended without requiring broadcasters and OTT platforms to invest in production, it will only harm producers and distributors."

There is one premise shared by both sides of the debate: normalizing the holdback period is necessary to revive the Korean film industry. However, there is a significant difference of opinion on the order in which this should occur. The theater side insists that legalizing the holdback should come first. The opposition argues that theaters should first establish a practice of screening a wide variety of films for a sufficiently long period before holdback protection can have any real meaning.

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Kyung-Shin Park, a professor at Korea University's School of Law, stated, "The key is not to prevent consumers from watching movies for a long time, but to ensure that films are screened in theaters for an extended period. The proposed amendment to the Motion Picture Act, which lacks such provisions, is not a proper bill but rather a 'blackout' bill." He continued, "The government also seems to attribute the declining theater attendance simply to COVID-19 and Netflix. With such a perspective, all that results is a blackout bill that forces consumers into theaters. The internal structure of the industry needs a more thorough examination."

The bill is currently pending in the National Assembly's Culture, Sports, and Tourism Committee.

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