Hello, this is an introduction to various ways to enjoy movies. Recently, the government announced the lifting of social distancing measures. Today, I would like to discuss the film industry in relation to the post-COVID era in a bit more depth. The COVID-19 pandemic that began in 2020 has left a lasting impact on many sectors worldwide, and one of the industries that was hit hardest is the film industry. According to data released by the Korean Film Council, the total number of theatergoers in 2020 decreased by 73.7% compared to the previous year. As the pandemic has persisted for over two years, visits to theaters have steadily declined, and with more people working from home, the time spent at home has increased, leading to a rise in the OTT service market.

Dominance is reaching its peak, with talks of a boom in the OTT market. In South Korea, not only foreign OTT platforms like Netflix, Disney, Amazon, and HBO Max are leading the charge, but local platforms such as Tving, Wave, and Coupang Play are also pouring out original content across various OTT platforms. Today, we will explore how the OTT market is creating friction with the traditional film industry and, furthermore, examine the diverse perspectives on theaters in the post-COVID era. 

In the current competitive landscape among various OTT platform companies, what is the key competitive advantage they must maintain to protect their market share? It is, quite simply, the amount of content they possess. To attract new users and prevent existing ones from leaving, a continuous supply of high-quality content is essential.

This is due to the lock-in effect. To secure content, OTD platforms employ three main methods. The first method is to purchase licenses from production companies to gain exclusive streaming rights. The second method involves obtaining conditional rights through partial investments. The third method is to fully acquire ownership of the content through direct investment in the content itself. The first method served as the initial business model, which simply involved buying licenses and distributing content. However, as traditional production companies with their own IP began to enter the platform business, they started creating their own independent platforms, restricting distribution to within those platforms. Consequently, all OTD platform companies began to focus on the third method, directly investing in content, leading to increased competition.

As a result, all 5T platform companies are in a situation where they must compete with their differentiated content, leading to intensified competition. The center of this controversy has been original content. Netflix, known as the most successful OTT platform, began producing its own content in 2013 with House of Cards. In 2015, it invested the entire production budget for Bong Joon-ho's Okja, which was then invited to compete at the Cannes Film Festival, sparking the controversy. After the title of the production company, Applet, appeared on the Cannes Film Festival screen, the controversy did not cease, and ultimately, the film was halted just eight minutes into the screening, leading to an unprecedented situation where it had to be restarted from the beginning. Such reactions stemmed from technical issues with the subtitles that occurred temporarily.

It was revealed to be a case of a screening interruption, but Pedro Almodóvar, who served as a jury member, expressed that it is a tremendous contradiction for a film that is not shown in theaters to receive the Palme d'Or, seemingly targeting original content produced and distributed by OTT platforms. He effectively indicated that he would exclude Okja from the judging process. Additionally, the French theater, Hepé, also opposed this by stating that Netflix benefits from the Cannes Film Festival while not paying value-added tax and television taxes. In South Korea, there were concerns that the distribution order of films could collapse, leading to opposition against the simultaneous release of Okja, with major multiplex theaters refusing to screen it. This issue regarding film distribution through digital platforms may have begun to crack the existing distribution system, starting with Okja. So, why...

In this way, is the existing industry setting up a confrontation with the original content created by OTT platforms? First, we need to examine the differences between what is traditionally called cinema and OTT original films. These differences can be broadly divided into external and internal elements of the film. When we talk about the internal elements of a film, we can point to the differences in the locations and devices where the film is shown. When making a film, directors often create with the assumption that it will be screened in theaters, taking into account the uniqueness of the theater environment. The most notable aspect of this is the constraints of physical space. Films are limited in movement and sight within the closed environment of a theater, which enhances concentration and immersion. This, in turn, significantly contributes to the audience's catharsis in cinema, which builds its narrative over nearly two hours. On the contrary,

OTT movies have the advantage of allowing viewers to easily watch films at their convenient time and place. However, the loose viewing habits and environment can also become environmental factors that diminish focus and immersion in the film. Secondly, there is the emotional difference that comes from screen size. In theaters, movies are shown on a large screen that is incomparable to a phone screen, which allows shots like the lipstick shot to capture both the background and the characters' movements clearly. However, if viewers watch such shots in an OTT environment, they may struggle to see what actions the characters are taking and could mistake it for a simple background shot. Along with extreme long shots, the emotional impact from close-up shots in theaters can be significantly different. When we see an actor's face on a large screen, we can feel...

The emotions and feelings experienced at the cinema provide a completely different impact compared to watching on a small screen. On the other hand, considering this, OTT content rarely uses extreme long shots; instead, shot sizes are often tightly framed as they would be for cinema screenings. During the pandemic, the Bucheon International Fantastic Film Festival had to conduct its film festival online, and it limited the online screenings to PCs rather than mobile devices. This restriction reflects an understanding of and importance placed on the emotional differences arising from shot sizes. Next, let's discuss external factors affecting films. The existing traditional film industry distribution system can be described as a theater-centered revenue structure that connects investment, production, distribution, and then screening again. The first point of this theater-centered revenue structure is that it creates a pure structure that allows the film industry to grow.

The film industry involves spending money throughout the production process, and actual profits only materialize at the point of screening. Therefore, the revenue generated in theaters stimulates reinvestment into other films. Expanding on this, revitalizing theaters can be seen as an effort to support the entire ecosystem connected to the film industry. Furthermore, certain platforms do not have this theater revenue structure, meaning that no matter how successful a film is, the production team does not receive compensation in terms of secondary rights or other rewards. This can diminish motivation for filmmakers. Lastly, the existence of a film development fund is crucial. This fund, managed and operated by the Korean Film Council, collects 3% from movie ticket sales to support overall production, film festival assistance, and the re-education of film professionals in the Korean film industry.

The film industry has been a driving force for both quantitative and qualitative development. Currently, OTT productions and distributions are in a legal gray area, and these films do not contribute to the Film Development Fund, which means they do not benefit the Korean film industry at all. Furthermore, when this Film Development Fund is reduced, it naturally hinders investment and support for art films and independent films, leading to a long-term issue of diminishing diversity in the films available to audiences. Of course, there are those who argue that the activation of OTT platforms has positive aspects, such as the advancement of production environments. However, it is clear that the films supplied by OTT platforms like Netflix will be limited to a small number, and it is difficult to believe that the growth of Netflix will directly equate to the growth of the Korean film industry in a positive way. So, what are the various perspectives on theaters and OTT in the post-COVID era?

First of all, the changes in film festivals are noticeable. The Cannes Film Festival, which became controversial with the screening of Okja in 2017, has established an official partnership with TikTok this year. They still maintain their stance that films distributed by Netflix will be excluded from the competition section, but the fact that red carpet events, backstage scenes, and interviews during the festival will be shared through TikTok can be seen as a very positive development. Additionally, there are plans to hold a TikTok Short Film Festival. The Venice Film Festival is even more radical. Since 2018, it has awarded the Golden Lion to Roma, a Netflix original film produced and distributed by Netflix. Recently, at the 94th Academy Awards, CODA, distributed by Apple TV, became the first film from an OTT platform to win the Best Picture award.

The Netflix original movie Tower of Tools has been awarded the Best Director, signaling a change in the industry. In South Korea, the 21st Jeonju International Film Festival has kicked off, along with the Mise-en-Scène Short Film Festival and the Bucheon International Fantastic Film Festival, which are screening films both online and offline. Recently, the Busan International Film Festival has opened the 1B Prana section to showcase series produced and distributed by OTT platform companies. 

On the other hand, there are also pessimistic views. The rise of OTT platforms during the COVID-19 pandemic has significantly changed the way audiences watch films. This shift in consumption patterns has led audiences to prefer watching shorter series rather than long films. Consequently, there has been a tendency for content production to focus more on series and stimulating genres. In relation to this, Korean cinema...

At the 100th anniversary celebration, director Lee Chang-dong said that the environment of cinema is changing too quickly, and both films and audiences are evolving. Most importantly, the way audiences accept and enjoy films is rapidly changing, leading to doubts about whether the films we know will still exist in the future. He mentioned that moving forward, cinema will likely polarize into large-budget films, like those made by Marvel, and very small-scale productions. There is also a perspective that focuses on the theater space rather than on content concentrated on OTT platforms. Even when the advent of television was said to threaten theaters, cinemas evolved with wider screens and richer sound systems, seemingly ending the competitive dynamics. He predicts that in the future, theaters will continue to diversify their experiences and become more upscale.

People who value the movie-watching experience in environments like IMAX, ScreenX, and 4DX continue to visit theaters, and in the near future, we may see experiential theaters utilizing VR and AR technologies. Returning to the beginning, I would like to ask you a few questions. Is the movie theater a monopoly on films? Should we not confine movies within the walls of a specific format? Perhaps the environment surrounding movies has been gradually changing, and the pandemic may have simply acted as a catalyst that accelerated this change. Once an era arrives, it does not go back. The theater has now lost its position as the exclusive primary market for films. With my joining the Motion Picture Association (MPA) in 2019, I gained recognition for my status as an investor in film distribution and streaming services. As for OTT...

The term negative about the platform does not imply a lack of convenience. While there may be no temporal or geographical suggestions, the convenience of access and the absence of secondary rights are drawbacks. On the other hand, the ability to earn stable income and the significant advantage of global simultaneous releases, along with reduced advertising and marketing costs, are notable benefits. In fact, Troy Kotsur, the deaf actor who won the Academy Award for Best Supporting Actor for CODA, highlighted the advantages of OTT content with his statement that CODA can be seen worldwide. Apple TV plans to release 90 films this year. Considering that major Hollywood studios used to release about 30 films annually during this period, Netflix has become the studio that produces the most English-language films in the world. With the concentration of capital and the migration of film masters to the platform, it has gained recognition for its quality.

Currently, Christopher Nolan is recognized as a leading director in Hollywood. After nearly 20 years of partnership with Warner Brothers, he was greatly angered when the studio announced that all of its films would be released simultaneously in theaters and on its own streaming service, HBO Max. As a result, he left Warner Brothers and partnered with Universal Pictures. 

Christopher Nolan has laid out six conditions for this new partnership: 

First, 100% creative control. 
Second, a theatrical release of more than 100 days. 
Third, a production budget of $100 million. 
Fourth, a marketing budget of $100 million. 
Fifth, 20% of box office revenue. 
Sixth, a ban on the release of other films for three weeks prior to his film's release. 

Now, viewing films solely as a streaming platform seems like a retrograde notion. Will OTT be a complementary asset to films, or will it serve as a substitute?

더 지켜봐야겠습니다. 하지만 확실해 보이는 건 앞으로 극장에서 천만 관객을 동원한 영화는 보기 힘들지 않을까 싶네요. 제가 준비한 콘텐츠는 여기까지입니다. 끝으로, 영화로 말을 연출한 알폰소 쿠아론 감독의 의미심장한 1TB로 마무리하겠습니다. 여기까지 영화 개론이었습니다.

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