Korea is the only country with a especially slow recovery… “Holdback must be used strategically from an IP lifespan viewpoint”
As the number of cases of movies being released through secondary channels such as online video (OTT) without screening in theaters is increasing, ‘mandatory holdback’ is being discussed as a solution to the theatre crisis.
However, there are mixed opinions in the industry regarding it’s effectiveness. While they generally agree with the purpose of the holdback to protect theaters, they point out that it is difficult to prevent an industry-wide recession without a distribution strategy that matches the changing market.
◆ There are no 10 million movies this year… ‘Holdback’ emerges as a solution to the theater crisis
According to related industries on the 14th, Democratic Party lawmaker lim Oh-kyung recently proposed a bill that would limit the release time on other platforms, including Netflix and OTT, to a maximum of six months after the movie is released in movie theaters. The purpose is to protect the movie theater industry in a situation where there are increasing cases of movies going straight to OTT without being released in theaters or not being able to secure sufficient theatrical screening periods.
Holdback refers to the grace period between the distribution of content to secondary platforms such as IPTV and OTT after screening in theaters.
Until now, distributors have made autonomous decisions considering the number of audiences and initial box office performance, and this has functioned as a practice to maintain production and distribution order.
However, the holdback period was quickly shortened as the number of theater audiences plummeted starting with the COVID-19 pandemic. With the spread of non-face-to-face culture,the number of works moving to OTT within a short period of time after opening in theaters has increased,and some content has begun to be released directly on OTT without going through theaters.
The industry believes that this trend has led to a recession in the theater industry.According to the Korean Film Council’s financial statements, the number of theater audiences in the frist half of this year was 42.5 million, a 32.5% decrease from the same period last year. There was no film that attracted 10 million viewers.
The production environment is also shrinking. The number of commercially released films with a net production cost of 3 billion won or more decreased from 45 in 2019 before COVID-19 to 37 last year and 25 this year.
◆ the theater recession started with a ‘weak distribution structure’… “Diversification of secondary distribution channels must begin first.”
However,some in the industry point out that the root cause of the theater slump should be found not in OTT itself but in the vulnerability of the domestic content distribution structure.
Although the OTT-centered market reorganization may have aggravated the crisis, it is analyzed that the background of early release and accelerated OTT direct flow is the reality that secondary distribution channels centered on cable TV (SO) and Internet TV (IPTV) are rapidly shrinking.
In fact, the cable TV and IPTV markets in Korea, which have been supplementing profits after theaters, are rapidly losing strength.
The three IPTV companies, including KT, SK Broadband, and LG U+, invested 300 billion won in joint funds to respond to OTT in 2022 and launched the content supply and demand brand ‘IPICK’.The ambition was to absorb content focused on global OTT within the domestic distribution network.
However, ‘i-Pick’ has not been able to present any new works since the movie ‘Noryang: Sea of Death’, which was released in January last year, and has virtually stopped its activities.
Conversely, overseas, distribution channels tha
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