Within a space of 25 hours, South Korean production houseMKB has raised the entire budget of its upcoming $1.8m project Hello AndGoodbye, Little Brother from online investors.
A total of 430 participants purchased one or more $910 (WON1m) shares in the film, which tells the story of a young boy whose elderbrother contracts cancer. The film'sscreenplay has already been made available online.
Should the film draw more than its agreed-upon break evenpoint of 1.2m admissions, investors will receive a profit of 0.6 won per sharefor each additional viewer. Therefore ascore of 1.5m admissions would result in an 18% profit margin.
MKB will also guarantee that if the film performs belowexpectations, participants will receive back at least 80% of their originalinvestment.
Local citizens seemed keen to take on the risk, with theaverage participant buying 4.5 shares.A similarly-structured 'netizen fund' which raised the entirebudget of last year's Venice competition entry A Good Lawyer's Wife,produced a hefty 60% return on investment.
Nonetheless executive producer Shim Jae-myung, who alsooversaw the netizen fund for Good Lawyer's Wife, had to face down achallenge by financial authorities in September before finding alegally-approved investment vehicle that falls under new laws concerningindirect investment.
Most observers predict this newly approved source financewill not be widely adopted, but it does open up new possibilities for anindustry which enjoys intense and largely positive media coverage at home.
It also doesn't hurt that Korea has one of the mostcommercially successful film industries in the world. Of the 66 films released to date this year, at least 27 haveearned upwards of $5m at the local box-office.