Longer holdback period is in the works in Korean film industry

A theatergoer browses film posters displayed at a multiplex cinema in Seoul on Dec. 22, 2023. [YONHAP]

It may soon take longer for domestic films to be released on streaming services like Netflix, Wavve and Coupang Play after their initial theatrical release.

The Korean government said it is reviewing measures to stipulate that films produced with government funds must wait six months after they have been shown on the silver screen before being made available on streaming platforms.

“We are currently in the process of gathering opinions from those in the film industry to apply this new measure to films that are made with government support, and we will announce an official plan in February,” an official from the Ministry of Culture, Sports and Tourism told the Korea JoongAng Daily on Tuesday. “There is a considerable consensus that a longer average holdback period needs to be maintained at least on a trial basis.”

A holdback period, as it is referred to in the film industry, is the time between a film’s initial release in theaters and when it is made available for streaming. Recently, the average holdback period for films in Korea has been between six weeks to three months.

Some within the industry have pinpointed the reduced holdback period as the reason behind the declining sales of theater tickets — as potential audiences only have to wait a short time before the films they want to watch are easily accessible at their fingertips.

The Culture Ministry’s new plan to lock down films’ holdback periods to six months will first apply only to works made with support from government funding, and it will be limited to those released on streaming services that do not require extra payment to view that particular work. This means that individual purchases for films on streaming services through transactional video on demand (TVOD), where users can buy single works, will not be subject to the initial six-month lock.

Of the 210 domestic films released in theaters last year, 62 films, or 29.5 percent, were made with support from government-run funds. “The Roundup: No Way Out” and “12.12: The Day,” the only two films that sold over 10 million tickets, are part of the 62.

Films receiving government support will increase this year, as the Culture Ministry set up a 1.72 trillion won ($1.29 billion) policy budget for entertainment content. Even with the possibility that films, looking to make a profit by handing over their release to streaming services earlier, forgo the option of receiving funding in the first place, this means that more works will be subject to the elongated holdback period.

Whether increasing the holdback period will be the answer to reviving cinemas and inducing more people to go to theaters to watch new films is uncertain, however. Movie ticket sales have been plummeting, with last year’s profit from domestic films reaching only 598.4 billion won — approximately 61 percent of the profit level from 2019, before the Covid-19 pandemic.

“Tweaking the holdback period is just one of a number of ways that theaters can be revived, and is not the sole answer on its own,” critic Kim Heon-sik said. “Extending the holdback period will also have an unbalanced effect — blockbusters can afford to withstand longer holdback periods, but for low-budget films or works that don’t gross as much, they need to scrape in as much as they can by releasing quickly on streaming services.”

In the end, theatergoers won’t frequent the cinema more just because they have to wait a couple more months, Kim argued.

“A more comprehensive blueprint needs to be envisioned for theaters to jump back to pre-pandemic levels,” Kim said.

BY LIM JEONG-WON [lim.jeongwon@joongang.co.kr]