Public company strikes film industry mother lode

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Public company strikes film industry mother lode

Kang Woo-suk, the director of “Silmido,” the hit movie based on the true story of Korean agents trained to infiltrate North Korea, recently spoke out against movie companies’ registration on the stock market. He argues it is more appropriate for movie companies to be privately owned.
“Once a movie company increases the number of shareholders, a film’s output will be evaluated like any other product sold,” Mr. Kang said. “The constant badgering and intervention to attract more profits will interfere with the desire and originality involved in making a film.”
Anyone who has spent a few years around Seoul’s Chungmuro, the center of the Korean film industry, will likely agree with Mr. Kang. The withdrawal of jaebeol from the movie business following the 1997-98 financial crisis seems to back up his argument.
Of course, the movie business has extreme ups and downs. Movies like “Silmido” rake in huge profits when audiences swamp theaters, but they can also lose everything in a single blow, Mr. Kang said.
“The movie industry is better suited to private companies, since people with similar ideas can come together to make a film,” he argued. “And even with low profits, [viewers’] spirits can be lifted without concern for shareholders.”
But the tables are turning, as the movie industry has come to rely on conglomerates’ investments as production costs have spiked. This trend has created added incentive for investment from the stock market.
CJ Entertainment, the sole movie company listed on Kosdaq, has broadened its business beyond movies to embrace music and concerts, and includes the CGV movie theater chain, which has opened multiplexes across Korea.
Its 140 screens in 17 theater complexes now account for 13 percent of the nation’s 1,100 screens, and by year’s end the company plans to add another 60 screens in seven sites. In addition to running theaters, CJ Entertainment also produces and invests in films.
CGV had quite a profitable year, thanks in part to investments in a number of winning films. The company even has a share in DreamWorks, which is co-owned by the renowned American movie director, Steven Spielberg. As a result, CGV has exclusive rights to import movies from the DreamWorks studio, which have included the 3-D computer-generated animation “Shrek.”
CJ Entertainment and CGV are now headed by Park Dong-ho, 49, who first dipped his feet into the film industry in 1998. Mr. Park’s first task after taking over the reins was to stimulate employees’ senses. His method of choice was to ask his staff to read books and later write reviews.
Mr. Park disagrees with the notion that jaebeol are not suited to the movie industry.
“Major conglomerates can sufficiently support originality,” he said. “The company can provide a free environment for creative divisions, and a support department can promote efficiency and professionalism.
“From now on,” he continued, “the movie business has to be managed efficiently. One cannot say that because Samsung’s and Daewoo’s [movie divisions] folded that major conglomerates have failed” at moviemaking. People who worked in the industry then, he said, “are now showing their abilities in various areas of the movie industry. Doesn’t that prove that jaebeol are appropriate for cultivating talent?”
Megabox, Lotte and others have also joined the multiplex business, leading some industry observers to comment that there may soon be a movie theater glut in Korea.
Mr. Park shrugs off such concerns. “Audiences have changed since the 1990s,” he said. “Today when people think of a movie theater, they not only think of a place to watch a movie but also as a place where they can meet friends, eat something and shop.”

by Lee Young-gi
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