Korean cinemas are screening local films at a record-setting pace, exceeding requirements of the nation's Screen Quota System for the second year on record and raising issues of 'cultural exception'.

According to Korea's Coalition for Cultural Diversity in Moving Images (CMDI), which independently monitors the activities of 617 screens nationwide, theaters screened Korean films for an average of 80.02 days in the first half of 2002, which is 15.06 days more than required under the quota.

Korea's Screen Quota System stipulates that exhibitors must present domestic films on each screen for 106 to 146 days per year, depending on the overall number of titles released. Individual theatres may also lower the required number of screening days by programming local films at peak seasons of the year during summer and winter vacations.

Throughout the 1990s local exhibitors regularly ignored such provisions, screening local films for up to 50 days/year less than the level required by law (see table below). A recent surge in the popularity of Korean cinema has seen a dramatic turnaround, however, with 2001 marking the first year in which the Screen Quota has been largely followed.

Additionally, under an increasing trend towards vertical integration, three local studios (CJ Entertainment, Cinema Service, and Showbox) have launched or are about to launch their own multiplex chains, creating major exhibitors with a built-in incentive to screen domestic films.

The quota system has been a long-standing source of controversy between the Korean and U.S. governments, forming a major stumbling block in negotiations for a bilateral trade agreement. The U.S. has criticised the system as being counter to free trade, while Korean industry groups such as CMDI have called for a "cultural exception" to allow for protection of local cinema.

Average levels of compliance with Screen Quota System

Year/ days +/- quota requirement
1993 - 48.0 days
1994 - 51.7 days
1995 n/a
1996 - 25.6 days
1997 - 20.4 days
1998 - 10.8 days
1999 - 7.0 days
2000 - 2.8 days
2001 + 0.5 days*
2002 + 15.06 days*
* to end June

Source: CMDI.