Globalism

 

Lack-hyun SONG

Animation Producer. Lack-hyun SONG has been steadily working in the field of content creation and active as a critic of the cultural andindustrial development of Korean animation. His publications include Ani School by Song, Lack Hyun, 50 years of Japanese Theater Anime, and Animation Secret Files. The theatrical animated film Speckles: The Tarbosaurus, which he produced in 2012, reached number two on the Korean animation box o ce rankings. He is currently planning a new project, ‘Figure Museum W’, which has emerged as the new mecca of Korea’s otaku culture.

Korean animation’s advance into the world, crisis or opportunity?!

While currently Korea’s pop music and dramas are making their mark as a Korean Wave in the global market, in the animation field, despite having a favorable position to enter the global market without any economic restrictions thanks to policies encouraging cultural exports, in reality the achievements so far have been insu cient and disappointing.

In the past, it was di cult since there was a huge difference in production capability between domestic animation productions and world-class animation studios, but looking from the current point where domestic production capacity has greatly increased, it is necessary to consider whether there is some other reason for the di culty in advancing into the overseas market other than due to technical disadvantages.

This is important because it presupposes the need to export since it is di cult in reality to break even from only domestic release revenue for theatrical animation films, which require a high production cost.

However, when a film is excessively planned for the overseas market, there are cases of unintended side effects. So is it possible for Korean animation to advance into the world, making the second leap by marking a new era? Or would other negative consequences be brought about by reckless investment?

 The History of Taking On Incredibly Di cult Global Challenges

Just like with live-action films, the prerequisite for entering the overseas market is to make a deal with a major film distributor. However, landing a major international distribution deal is very di cult, because the international status of Korean animation is still not very high. Therefore, an alternative
that emerged as an initial stage for entering the overseas market was to co-produce a film with a studio in the relevant country and then to find a distribution partner.

A perfect example of this is Shark Bait (a.k.a. The Reef), released in 2006. This film was co-produced by Ash R. Shar, a producer of films targeting only the Class B market in Hollywood, and DigiArt of Korea.

Although it is referred to as a “Class B” market by North American standards, it is still several times bigger than the entire Korean market. Therefore, in a way, it is a market where you can make a real profit using a relatively small production budget and avoid confrontation with major titles from studios such as Disney or Dreamworks.

Identifying the characteristics of these markets, Shark Bait was planned and produced as the first Korea-U.S. co-produced theatrical animated film, and the sequel The Reef 2: High Tide (2013) followed, leaving a methodology of its own for the overseas advancement of Korean animation.

Unfortunately these films, despite the strategic attempt of co-production, were not able to succeed in their target market of North American theaters, and getting a film to reach the box o ce charts remained a symbolic challenge for Korean animation to overcome.

Eventually, in order to enter major overseas markets, it was concluded that it is di cult for low-budget films and that a larger capital investment (minimum of $10 million) surpassing the market size of Korean animation was needed. Dino Time was the first film produced in an attempt to clear this di cult hurdle.

 

 

 

 

 

This film is a global-oriented animated film with a production cost of 16.3 billion won, which was the highest ever in Korean animation history. It was produced by TOIION, the animation studio famous for having made Cubix. To help this film succeed, government support agencies, fund managers, and related companies gathered all of their capabilities and as a result Dino Time successfully reached a distribution agreement in 2011 with Clarius Entertainment of over $30 million for the North American market.

If you count live action films, there was a film that obtained major distribution in North America before Dino TIme. D-War (2007), which was produced by Hyung-rae Shim, was successful at achieving a wide release of 2,275 theaters in North America, reaching 5th on the box o ce charts its opening week. It went on to gross $10.98 million, but was a significant loss since the committed local marketing budget was over $15 million.

Moreover, although it is known that a company called Freestyle Releasing was in charge of the local distributor, actually it was just conducting the distribution in North America on behalf of the domestic distributor (no marketing investment was made), so it was di cult to give a certain significant meaning. This is because the box o ce figure represents a combination factors including the quality of the film itself, the audience reaction, timing, etc. but a significant factor is which company conducts the marketing and P.R. and how much of its own capital it invests.

The first Korea-U.S. theatrical animated film co-production, Shark Bait.
It was planned to capture a niche market rather than the mainstream market.

This was exactly the difference between D-War and Dino Time. Since Dino Time had a contract where the local major distributor was actively investing its own money into marketing, many of the people involved expected that it would produce more than the basic outcome distribution-wise without any particular external variable.

However an unlucky “external factor” occurred, which no one expected. The unfortunate news that Geoffrey Ammer, CEO of Clarius Entertainment, died suddenly nullified the North American distribution deal. Due to this, Dino Time, which represented an ambitious effort that collected all the forces of Korean Animation, became adrift and lost its way.

c Redrover / ToonBox

The Nut Job achieved advancement into the global market by taking a lesson from the case of Dino Time

As the foregoing examples show, the overseas theatrical animation market is di cult to enter, but it is even more di cult to meet a capable partner who has the ability to distribute a film, taking responsibility in the local entry itself and without an external variable.

However, most of the domestic producers, not having enough opportunities in this business field, made the best of it by finding a distributor by submitting their films to the Cannes Film Market or American Film Market (AFM) and simply selling off at a specific price rather than getting the protection of a running guarantee due to the nature of the free sale market.

Redrover, which was going to produce The Nut Job (2014), also tried to search for global entrance in the early stages since they could not find an overseas network. However, it was judged that just participating in the overseas sample market could not be the methodology to penetrate the global market when Bolts & Blip (2010), which was produced with a

15 billion won investment, could not make a noticeable achievement. Therefore they were convinced that the strategy for achieving the highest probability for success was to join with a capable distributor with marketing power in the region, much like Dino Time pursued, although it had not been successful.

Mobilizing all the channels available in order to achieve this, Redrover pitched to select a distributor for The Nut Job in Los Angeles in 2013 from December 5th to 14th and finally signed a North American distribution agreement with Open Road Films. Open Road Films is a relatively new distributor that was established in 2011 and had hired a large number of its staff from Lionsgate and The Weinstein Company to compete against existing distributors.

The most notable factor was that Open Road Films actively ran the distribution of The Nut Job in North America by investing $23 million into marketing by itself, not in the acting distribution form as had been the case with D-War. As a result, they were able to open in 3,427 theaters, more than a thousand more than D-War, and opened in mid-January when the box o ce punch of Frozen was slowing down in the United States. The Nut Job earned $20.55 million in its first week, and made the splendid achievement of reaching 3rd place in the box o ce rankings.

It showed tenacity by remaining ranked in the top 10 of the box o ce charts through its fourth week of release, eventually earning $64.23 million in North America, which was a record for the Korean film industry./

Dynamics between globalism and domestic box-office

Meanwhile Dino Time, which was drifting after failing in distribution despite the fact that the film was completed, was released domestically after so many twists and turns for the Children’s Day holiday in 2015. It was released first through the major distribution line of CJ Entertainment, which invested the production cost by itself, employing various promotional means to raise box o ce performance, including marketing by celebrities.

However, the final box o ce in Korea reached just 283,300 audience members. This global animated film, which had big dreams of entering the global market, pouring 16.3 billion won into production and even casting famous Hollywood stars such as Melanie Gri th, William Baldwin, and Jane Lynch, was ostracized by the domestic audiences it counted on.

And this phenomenon occurred likewise to The Nut Job, which achieved its dream of global box o ce success. The Nut Job was a box o ce hit first in North America, and was released in Korea after about two weeks on January 29, 2014. There was already a heightened mood due to the news of its box o ce success, and even the incumbent president visited the theater and watched the film with a general audience, indicating that the domestic potential of The Nut Job was very high.

However, the domestic box o ce performance of The Nut Job recorded in its first week of release was 215,981 viewers, ranking 7th. In its second week, it didn’t rebound, staying ranked 7th, and in its third week it plummeted and was not even ranked in the top ten. Its screening run was ended with a final total spectator tally of just 478, 392.

 

Although there are many factors that contributed to its domestic box office failure, first of all the aftermath of Frozen cannot go without mention. In North America, the film was released as the box o ce strength of Frozen had died down considerably and the damage was not severe, but in Korea, there was di culty bringing in audiences because Frozen’s box o ce record was heading toward a peak of 10 million viewers, having accelerated from the end of January when The Nut Job was released.

Secondly, just like the ability of the distributor played a major part in North America, the role of the distributor was very important domestically. In the case of The Nut Job, over 20 billion won was put in and it was definitely a major title relative to the size of the Korean film market, but it was not able to ride a major distribution line such as CJ or Lotte, rather it was distributed through Sidus. (This was because KT, which owns Sidus, was the investor of The Nut Job.)

But it is wrong to dismiss the cause of box o ce failure as just the release timing and capability of the distributor. There is a need to look into more fundamental causes, which seemed to be the alienation from domestic sentiment, which films planned for entering the global market commonly face.

For that reason, looking at the feature animated films from DigiArt, which has been producing global films such as Shark Bait, The Outback (2012), and Bling (2016), the promotional marketing was conducted with the intention to not show that these films are Korean animated films as much as possible. Since most members of the viewing audience are not concerned about which country a film was produced in, the quality of the movie is what makes a difference at the box o ce, and only a few audience members complain or regret the alienation from domestic sentiments.

However, The Nut Job was different. In the PR and marketing from the early stages of deployment, there was plenty of “patriotism marketing” to inform the pride of Korean animation. Moreover, while Psy, the great enforcer, decorated the ending of the film, conveying the status of Korean animation to all audiences was strongly emphasized.

However, since the film was made by a foreign director and screenwriter, and most of the production staff were foreign, patriotism marketing was not adequate and as a result it seems to have become the headwind that decayed the box o ce performance of The Nut Job in Korea.

Dino Time recorded horrifying low box o ce figures similar to the record of the well known disaster of Korean animation Wonderful Days 13 years ago, having invested a huge production cost to the point it could have produced Wonderful Days two times over. Although the misfortune that occurred while promoting its distribution in North America had some extenuating circumstances, it was doubtful whether it could succeed in North America with the cinematic quailty of a film that failed to reach 300,000 viewers in Korea. And the answer to that question was identified when it was released in North America (under the title Back to the Jurassic) and it was announced that its final earnings were just $4,351.* The film that was made with a 16.3 billion won investment earned just 4.8 million won (Exchange rates from 18/6/2015) and quit playing.

* http://www.boxo cemojo.com/movies/?id=backtothejurassic.htm

Bling was produced by DigiArt, spending 12 billion won on production costs with the goal of global distribution. Traditionally the marketing of DigiArt’s feature animated films has been conducted as if the film was produced overseas, not putting the name of the producer on the poster for domestic release. Although it looks like a desperate measure to raise box o ce performance, it may be a strategy that gives up long term branding and content identity, therefore it is considered not to be a desirable method.

Only Speckles and Pororo, which both started as local content and then entered the global market, raised the highest box office performance ever, while no film planned primarily for global distribution has ever reached more than 500,000 viewers domestically. In short, they did not satisfy the taste of local audiences. For reference, the theater market in Korea has been focused on by six major studios in Hollywood enough to be defined as the 7th largest market in the world, however it seems that we are committed only to the global market, while giving up(?) the domestic market.

Who protects our market?

Around 2010, the five-day workweek was implemented in earnest, making Korea’s film market reorganized rapidly into a family-oriented market. However, despite this market situation, the percentage of live-action films for family viewing is not large. And if this is applied to Korean films only,

it becomes even more di cult to find relevant movies.

Therefore, for the main content of family films, which are growing larger, feature animated films can be regarded as mainstream. The number of films opened as domestic feature animation was about 20 in 2010, but was 51 in 2011, more than doubling. And in 2013, it was 102, again doubling, and now is around 80 films being released per year.

In this period, not only have the number of films increased, but also Korea’s family animation market showed explosive growth. Frozen reached 10 million viewers just two years after Kung Fu Panda 2 hit the 5 million viewer mark in 2011.

However, the share of Korean animated films in the domestic theatrical animation market, which is ever expanding, has stayed in the low level of
a mere 9.7% (as a share of domestic releases out of the total releases of animated films in the past five years). But this figure also includes all of the indie animated films with running times less than 60 minutes. If it is calculated just for commercially released films, the figure drops to the seriously low level of below 5%.

We find that successful Korean entertainment industries such as dramas, music, or games have advanced into the world market first by passing through a verification procedure in the domestic market. However, animation is still chanting “Global” as if it were stuck and hypnotized even though its presence has not been acknowledged yet even in our own house. In the meantime, our own market finds itself completely occupied by overseas global animated films.

Of course there is the di culty that if exporting a film is not planned for, it
is hard to break even, as mentioned in the introduction. And putting aside simple matters of money, Korean animation’s challenge to succeed in the world market should continue. Animation is not simply an export product designed to earn foreign currency. When the domestic market prospers, the potential to achieve a global box o ce hit will be much higher.

Korea’s theatrical animation market finally found a streak of light when the successful film called Leafie, A Hen into the Wild came out in 2011. And now many films are planned thanks to the possibility that was opened by that light. Although each of them has different production methods and intended target points, nevertheless one can hold on to some small hope.

It is hoped that many global animated films that our audience members and our children can be proud of will be made.