The Korean Film Council (KOFIC) has announced a five-year policy plan for developing the local industry which includes funds for international co-productions and loan guarantees.
The government organisation noted that the recent downturn in the industry and across the globe called for renewed measures and announced the following major initiatives it will work to achieve by 2012:
Specialised mid-size investment funds:
Moving away from locally-focused projects and partial investments with low profits, KOFIC will create and/or invest in specialty funds for international co-productions that target the global market.
It will also work to improve business transparency and create higher profit rates by becoming the main investor in certain funds.
The funds will total around $79.48m (KW100bn). KOFIC says it will invest $7.95m (KW10bn) of public funds annually until 2012, while bringing in another $31.78m (KW40bn) in private finance yearly to its existing investment funds.
Loan guarantees (to start in 2010):
KOFIC will set up a $15.9m (KW20bn) account of matching funds to guarantee loans for investment in local projects and finance for overseas sales. The organisation expects this will have the effect of at least $159m (KW200bn) in guarantees.
Support for film companies (to start in 2011):
Instead of financing individual projects as it has always done, KOFIC plans to also support production companies with the 3% film development tax that is taken from cinema tickets, which it expects will amount to $5.96m (KW7.5bn) in support annually.
Improvement on tax systems:
Previously, the Korean government has only focused its tax support on the manufacturing industry, but it now plans to find ways to expand that to the film industry in some of the following ways:
- Employers will be able to get tax deductions for wages given to ‘creative specialist manpower’.
- Individual investors will get tax deductions for investments in film projects.
- Investment funds will not be taxed for profits made on cultural projects and business.
Creating online platforms to expand the overall market:
With ancillary markets dead or stagnating, the government plans to expand the current size of these markets from $198.6m (KW250bn) in profits to $477.14m (KW600bn).
Taking into account the currently estimated losses from piracy, KOFIC is establishing an integrated film contents database to protect rights holders, create transparency in managing profits, and allow viewers to access contents legally at reasonable rates.
Establishing an “ecosystem for diversity films”:
Noting the currently weak audience base for independent and art films, and the films’ lack of opportunities to make it overseas, KOFIC will be finding ways to create infrastructure for diversity filmmaking with personnel training, investment, and production, distribution and exhibition support.