Should I wait until summer to watch ‘Spring in Seoul’ on OTT? Countdown to introduction of Korean movie Holdback

Ministry of Culture, Sports and Tourism begins to specify holdback period and targets
Blueprint for recovery of the film industry, which was ‘cut in half’
Some pointed out that “there will be increased losses by delaying entry into the secondary market”

The government is moving to legislate a holdback system that postpones the release of domestic movies screened in theaters on online video services (OTT) for a certain period of time. While a plan to delay OTT release for government-supported works until six months after theatrical release is likely, reactions from the industry and audiences are greatly mixed.

It does not apply to those with less than 10 viewers and production costs of 30 billion won

According to the film industry on the 19th, the Ministry of Culture, Sports and Tourism plans to announce Korean-style holdback regulations through an agreement ceremony with the industry in February. The OTT industry grace period, which was the biggest issue surrounding the holdback system, was set to last six months from the theatrical release date. The holdback rule introduced this time will be introduced for streaming products (SVOD) that can be watched without additional payment on subscription-type OTTs that pay on a monthly basis. The introduction of individual purchase products where viewers pay a certain amount of money per work will be discussed at a later date. In addition, we plan to establish exception regulations for some works, such as those with fewer than 2 theater audiences and production costs of less than 6 billion won.

The first areas where holdback regulations apply are government-supported works. Among general commercial films, works that receive venture capital (VC) investment through government funds are eligible. Of the 210 films released in theaters as of last year, about 29% (62 films) received investment from government funds. This includes , which was released in November and attracted 11 million viewers, and , which was released in May and attracted 1,285 million viewers. As the Ministry of Culture, Sports and Tourism announced this year to revitalize the content industry by providing policy financing of 5 trillion won, the largest amount ever, the proportion of government-supported films in the film industry is expected to increase further.

The government’s haste to introduce the holdback system lies in its determination to revive the slumping Korean film industry even after the end of the pandemic. According to the Korean Film Council, the number of domestic theater audiences, which recorded 19 million in 2019 just before the spread of COVID-2 last year, fell by almost half to 2,098 million last year. During the same period, theater sales of Korean films also plummeted by about 1%, from KRW 2,514 billion to KRW 9,708 billion.

In September last year, the Ministry of Culture, Sports and Tourism launched the ‘Korean Film Industry Crisis Overcoming Policy Council’, which consists of film production and distribution officials, including the Korean Film Council, domestic film production companies, investment/distribution companies, and IPTV operators. The government plans to prepare specific details related to this holdback regulation through the relevant council. An official from the Ministry of Culture, Sports and Tourism said, “We are currently discussing with industry officials about the holdback period and applicable targets,” and added, “After sufficient discussion, we plan to finalize and announce it next month.”

Criticism pours in over “policies that go against the market trend”

The audience’s reaction is greatly mixed. A netizen on the online movie community Movie Korea said, “In Japan, which is nearby, the average holdback is 6 months, and in France it is 15 months,” and added, “A necessary policy was developed in a difficult situation for theaters after the pandemic.” . On the other hand, netizens who expressed a negative stance said, “Just because it is released late on OTT will not lead to more people going to theaters, and the side effects will only increase, such as a decrease in overall investment,” and “Works that received lower-than-expected performance in theaters will have little chance in the secondary market.” He expressed his critical opinion, saying, “We need to make up for the loss, but it will cause more harm than good to the film industry.”

Experts also agreed that the recovery of the theater industry that can be expected from the introduction of holdback will be very limited. It is pointed out that with the activation of OTT, most moviegoers have become accustomed to watching the works they want regardless of time and place, and it is nearly impossible to go against the changed market environment. According to the Information and Communications Policy Institute, the OTT usage rate among domestic media consumers in their teens to 10s last year was 70%, up 77.0 percentage points from 2019 (52.0%).

Domestic and foreign OTT companies showed the most cautious attitude regarding the introduction of this holdback system. A Netflix official declined to comment, saying, “Currently, the platform release timing for movies released in theaters varies depending on individual contracts, and we cannot yet tell you anything about the situation after the introduction of the holdback.” Wave and Tving also did not make separate statements. there is.