Korean cinema has just recorded an unprecedented move when many leading management companies, representing famous stars such as Lee Byung Hun, Gong Yoo, Jeon Do Yeon, Suzy, Han Ji Min, Kim Go Eun... agreed to participate in the voluntary mechanism to limit actors' salaries. This is seen as an effort to solve the production cost problem that has weighed heavily on the film industry for many years.
Previously, the Korean Ministry of Culture, Sports and Tourism and the Korean Film Council (KOFIC) signed a "Cooperation Agreement between the Government, production companies and management companies to promote Korean film production".
The agreement includes the Korea Film Producers Association, the Korea Film Producers Association (PGK) and many major management companies such as BH Entertainment, Management SOOP and J,WIDE-COMPANY.
According to the agreement, mid-budget films selected for KOFIC's support program will apply a voluntary fee-limiting mechanism. The total fee of the main and supporting cast is recommended not to exceed 10% of the net production cost.
For example, for a film with a net production cost of 5 billion won, the total salary of actors is recommended to be below 500 million won. Although not legally binding, the agreement is expected to create consensus between the Government, producers and management companies in building a more sustainable film production environment.
The companies participating in the first phase are all units managing many famous actors.
The agreement was made in the context of continuous increases in Korean film production costs, while the theater market has not fully recovered after the COVID-19 pandemic.
According to filmmakers, the strong development of global OTT platforms has pushed the cat-xe of many stars to a very high level. Many projects have to spend up to 30-40% of the total production budget just to pay for one or two main actors.
The fact that actors' cat-xe accounts for too much proportion has significantly narrowed the budget for scripts, fine arts, special effects, post-production and the production team.
In particular, films with budgets from 2-10 billion won (a segment once considered the mainstay of Korean cinema) are increasingly difficult to deploy because they cannot balance costs.
Controversy about actors' salaries has also continuously appeared in recent times. According to Korean media, the movie "When Life Gives You a Tangerine" has a production budget of about 60 billion won, while "Squid Game" cost nearly 100 billion won. Previously, international media reported that Lee Jung Jae received about 1 million USD for each episode of "Squid Game 2". The actor later said that some information was inaccurate, but also admitted that he received a high salary.
Not only the Korean government, streaming platforms are also starting to find ways to control production costs. According to Korean media, Netflix once adjusted the salary level for actors participating in films and series produced by this platform to about 300 million won. However, Netflix affirmed that it will not apply a fixed ceiling but will negotiate flexibly, based on project scale, roles and production time.
In addition to the fee-limiting mechanism, the Korean Government has also sharply increased the budget support for mid-budget film projects, from 10 billion won last year to 46 billion won this year. KOFIC said it will continue to expand the number of management companies participating in the agreement, and establish a coordination mechanism between production, investment, distribution and management units to research solutions to improve the filmmaking environment.
