The Korean Film Council (KOFIC) and the Korea Export Insurance Corporation (KEIC) today signed an memorandum of understanding (MOU) towards the creation of a Cultural Export Insurance specifically for films.
The MOU was 'an agreement to work together to support the local film industry' - to explore ways to steadily expand Cultural Export Insurance for Films and to give favorable status to films and film funds that KOFIC evaluates and recommends to KEIC. In addition, KOFICwill provide KEIC with information on the film industry's market trends.
In the works and looking to launch this month, the new insurance plan targets films that do pre-sales and film funds that are created 'with the aim to increase exports' and will provide security not only for investment and loans for individual films' total production costs, but also investments made in film funds.
'This new plan should help invigorate the local production sector as well as exports,' says Kim Tae-hyung, KOFIC manager. 'What we're working out is something along the lines of this: if you have a $10m film that does $300,000 in pre-sales, you can get insurance for not just the $300,000 but the whole $10m budget. Then say you go on to recoup only 50% of your budget. The investors will have the responsibility to take a $1.5m loss, but KEIC will take up the other $3.5m.'
Why is KEIC willing to do this in a sector that is complaining of losses across the board'
'Because the government has decided to treat films as a cultural export, and not plain manufactured goods. It's an international, cultural image-making issue that they're willing to support,' says Kim. Of course KOFIC wouldn't recommend films that would be damaging to the country's reputation.'
Won Yong-sik, development cooperation executive at KEIC added: 'Exim Bank of India, that country's export credit institute, already operates a plan specifically for the film industry, and China's equivalent Sinosure also guarantees loans for Chinese film production companies' noting The Banquet as one of the films produced with such support.
'Export credit organizations abroad limit their film industry support plans to direct loans and loan guarantees, but KEIC's new Cultural Export Insurance for Films will provide security against the risks involved in investment, and should be more effective,' he said.
Established in 1992, KEIC is a government-funded organization that promotes sound overseas transactions by insuring against losses from export transactions and overseas investments that cannot be handled by general insurance systems.
KOFIC says it is also studying ways to further cooperate with KEIC on insuring overseas P&A funds.