On July 1, 2006, South Korean movie stars and directors such as Lee Byung-hun, Song Kang-ho, Choi Min-sik, Bong Joon-ho, and Park Chan-wook joined 2,000 other people on a street in Seoul. The celebrities—many of whom who would go on to earn international acclaim with drama series and films such as Squid Game and Parasite—were not there for a premiere but to protest a government measure that went into effect that day: the reduction of South Korea’s screen quota.
The South Korean screen quota dates to the 1960s and requires the country’s movie theaters to feature domestic films for a certain number of days; at its peak, the system required theaters to show South Korean productions for at least 146 days of the year under the banner of promoting the domestic film industry. The protest attended by Park and others was in response to the government’s decision to halve the quota to 73 days—one of numerous film industry-led efforts between 1998 and 2006 to resist any amendment to the decades-long protectionist measure.
It was during those eight years that the South Korean government sought to negotiate a bilateral investment treaty (BIT), and eventually a free trade agreement, with the United States. Washington viewed the screen quota as a clear trade barrier against U.S. films, and Seoul’s wrangling over the issue effectively stalled the negotiation of the United States-Korea BIT. The South Korean government’s 2006 move finally gave the green light to start negotiating the United States-Korea Free Trade Agreement (KORUS FTA), which was staunchly opposed by much of the South Korean film industry. Their protests were reminiscent of the late 1980s, when bottles of hydrochloric acid were planted and snakes were released in South Korean theaters to protest against the direct distribution of U.S. films by U.S. rather than South Korean firms—an arrangement that began in 1988 and prompted concerns about U.S. market dominance and equitable revenue distribution. In 2006, many similarly argued that the halved screen quota would force South Korea to become a cultural colony of the United States.
Fast forward 16 years to 2022, and that argument has not held up. On the contrary, South Korean films have actually helped turn the country into an internationally recognized cultural juggernaut. South Korean directors and actors, many of whom had warned of a Hollywood invasion, instead stormed other markets and became recognized around the world. While many argue that the screen quota system contributed to this success, others contend that the 2006 reduced quota led South Korean films to evolve and become competitive both at home and abroad.
While the South Korean film industry has celebrated domestic and international successes over the past few years, it is also facing emerging challenges. These have been prompted by everything from the COVID-19 pandemic to the development of new film distribution technologies and might serve as a critical juncture for the industry to evolve once again—bidding farewell to the dated screen quota once and for all.
The South Korean film market has grown significantly since the signing of the KORUS FTA. According to the Motion Picture Association, South Korea was the third-largest box office market outside North America in 2019, worth $1.6 billion. IHS Markit also estimated that South Korean movie consumers watched the most average films per capita in the world in 2019, at 4.37 films—surpassing Iceland (4.32 films) and the United States (3.51 films) to top the list. And rather than succumbing to Hollywood dominance at the South Korean box office, South Korean films instead exceeded the market share of foreign films for the decade from 2011 to 2020.
South Korean moviegoers also enjoy Hollywood movies under the relatively liberalized system. Those amounted to 46.5 percent of the market share in 2019, and South Korea became one of the biggest markets for Marvel and Disney; Marvel’s newest Doctor Strange film grossed $30 million when it debuted in the country, the highest figure outside North America. Marvel and other Hollywood studios are also increasingly featuring South Korean actors and settings in their movies, which many South Koreans proudly boast as a sign that their country has elevated its international status.
The South Korean movie market, however, gravely suffered during the height of the COVID-19 pandemic. The number of moviegoers plummeted by 73 percent in 2021, compared with the record highs of 2019, and the total sales of the South Korean film industry plunged by more than 50 percent as well. Producers also halted filming and productions, while distributors delayed premieres of many movies to later dates.
As the South Korean movie theater industry warned of its potential collapse under the government’s strong COVID-19 countermeasures—which included banning popcorn and imposing shorter hours of operation on theaters—the screen quota system, forgotten by many for almost 15 years before the pandemic, was seen as yet another burden. A record-high 68 percent of total moviegoers watched South Korean films in the early phase of the pandemic in 2020—when fewer Hollywood blockbuster movies were being released—though theaters suffered a 70 percent plunge in attendance. Local theater operators were further challenged as they struggled to fill their theaters with domestic films to meet the mandatory quota in late 2020 and 2021, as not many South Korean films were being released by 2021.
This was made worse by a technicality of the quota. The 73-day rule is applied not to a theater as a whole but to each screen in a theater regardless of its type—a nuance that creates particular difficulties for special types of screens such as IMAX, 4D, and Dolby Cinema. While there was great demand for Dune, filmed for IMAX to be screened at one IMAX theater in Seoul for a longer period of time, the movie had to be replaced with a South Korean romance comedy film not meant for IMAX theaters; the cinema had to meet the quota so it could later screen the highly anticipated Spider-Man: No Way Home until the end of 2021 on its IMAX screen.
By now, South Korea has lifted virtually all COVID-related restrictions—including the restriction on consuming food in theaters—and the domestic film industry is hopeful about its recovery. It would be a good time for South Korea to review the decades-old screen quota, which may not be able to conform with the new realities of cinema. The South Korean film industry’s argument that it needs protection against Hollywood is also becoming weaker. It is precisely South Koreans films that have been enjoying, and will continue to rely on, open markets around the world.
New technology will continue to evolve theaters, and not all movies will incorporate the newest screening technology. Globalization and cross-national cooperation in film production will also make it difficult to decide what counts as a domestic or foreign film. Dramas and movies such as Apple TV’s highly acclaimed Pachinko and Minari—which feature South Korean actors and directors or have South Korea as a major theme—are technically U.S. productions. It was Netflix, a U.S. company, that accepted, funded, and distributed Squid Game after it was rejected by numerous South Korean studios for a decade. And renowned Japanese director Hirokazu Kore-eda directed Broker, filmed and directed in South Korea with South Korean actors, which premiered at the 2022 Cannes Film Festival to win the award for best actor and the Ecumenical jury prize for best film.
During a June 12 dinner honoring Cannes awardees—including Park Chan-wook, who won best director for Decision to Leave, and Broker’s Song Kang-ho—South Korean President Yoon Suk-yeol stated that “the government’s key policy toward the culture and art sector is not to intervene but to support” and referred to the screen quota as a “distant memory” in front of celebrities such as Park and Song, who had protested against the quota’s reduction in Seoul 16 years ago.
The quota, however, continues to exist, and some have argued for introducing a different quota based on market share. The Moon administration actively considered another quota that would have curbed what authorities regarded as dominant and monopolizing films to promote and screen lesser-demanded South Korean films, and the debate may reemerge with the popularity of Doctor Strange in the Multiverse of Madness and The Roundup, a South Korean movie that is set to make history in the South Korean box office.
If history is any indicator, adopting and maintaining openness despite fear of the unknown has always elevated South Korea’s status rather than undermining it. The country’s decision to lift its ban on Japanese cultural products in 1998—once feared as a move that would destroy the livelihoods of South Korean singers, filmmakers, and other artists—instead created an opportunity for South Korean cultural products, including films and dramas, to flourish in Japan. The KORUS FTA, meanwhile, also strengthened the bilateral partnership between the United States and South Korea rather than undermining the latter’s economy. As South Korea contemplates how to help its film industry recover from the pandemic, it is this openness that should be a guiding principle—rather than an anachronistic quota that continues to lose relevance as South Korean cultural exports prosper.
