In the first half of 2025, the Korean theatrical market experienced a clear downturn, reversing the recovery momentum that had followed the pandemic. According to KOBIS (Korea Box-office Information System), operated by the Korean Film Council, total box office revenue reached KRW 407.9 billion with 42.5 million admissions, representing year-on-year declines of 33.2% and 32.5%. Compared with the pre-pandemic three-year average (2017–2019), the market remained at less than half its previous scale, reinforcing the urgency of structural reform.

Among local films, mid-budget titles such as Yadang: The Snitch, Hitman 2, and The Match performed steadily, but the absence of mega-hits resulted in revenue and admissions for Korean films plunging by over 40%. Foreign releases including Mission: Impossible – Dead Reckoning Part Two and Mickey 17 also posted declines, with revenue down 19% and admissions down 17.5%. Only two films surpassed the KRW 30 billion mark, illustrating weakened content power across the market.

The investment climate has shifted markedly toward conservatism. Large-scale tentpole projects are often canceled or scaled down at the planning stage, while investors and producers increasingly focus on mid-range films with more predictable returns. This has reduced both the number of releases and the diversity of projects. Release schedules are now adjusted flexibly to market conditions, diminishing the concentration of blockbusters in traditional peak seasons.

Industry players are prioritizing stability over expansion. The early optimism of a quick return to pre-pandemic audience levels has faded, replaced by strategies aimed at minimizing losses. New fund formations are delayed, marketing budgets reduced, and initiatives in co-production or overseas expansion are pursued cautiously. Meanwhile, the growing influence of OTT platforms has reshaped both revenue flows and audience behavior. Viewers increasingly reserve theaters for must-see spectacles while consuming other content at home, positioning the living room screen as the primary competitor to cinemas.

The results of H1 2025 confirm that the Korean film industry remains at a crossroads. Reliance on one or two hit titles is insufficient to sustain growth, and stakeholders highlight the need for greater genre diversity, the creation of new IP, expanded international co-productions, and meaningful reform of government support schemes

The Korean production landscape in H1 2025 is defined by contraction and caution. Post-pandemic normalization steadied day-to-day operations, yet risk appetite in financing and development has narrowed materially. Uncertain recoupment has shelved or resized many tentpoles at the planning stage, while mid-budget commercial features and smaller projects have become the center of gravity. The market favors steady, mid-range slates over high-risk pipelines; a bias toward capital preservation now shapes greenlighting decisions.

In theatres, 265 films were released and screened more than 40 times in H1 2025—113 Korean and 152 foreign—slightly above last year but 34 fewer than H1 2019 (299). Only two titles crossed the KRW 30 billion threshold: Mission: Impossible – Dead Reckoning Part Two (KRW 32.9 billion) and Opposition (KRW 32.0 billion). The remainder of the box office was carried by mid-range titles. Documentaries and animations retained visibility; notably the domestic animated feature Exorcism Chronicles: The Beginning topped the independent/art film chart, setting a new record. Genre signals included proven franchises, crime dramas, and experimental animation. The short Magic Candies succeeded with a rare solo release, signaling appetite for curated, event-style programming.

Government support has been strengthened to counter contraction. The Korean Film Council (KOFIC) launched a mid-budget production program in 2025, allocating KRW 10 billion across nine projects. Selections range from established auteurs—Chung Ji-young’s My Name Is, Jang Hoon’s Mongyudowondo, Byun Young-joo’s Your Target, Kim Yong-gyun’s Spring—to the debut of Kim Sun-kyung with Andong. Grants of KRW 0.6–1.5 billion per title come with conditions: securing distribution and investment agreements and commencing principal photography within a specified window. The scheme is positioned not only to subsidize budgets but to activate the production ecosystem and de-risk financing milestones.

Conglomerate-affiliated investors and distributors remain pivotal but have tightened second-half slates and trimmed marketing in response to underperformance. Mid-sized and large producers face financing frictions as national funds show structural imbalances and fundraising delays, prompting some projects to tap foreign capital. On the labor side, contraction in large-scale features is accelerating crew migration to OTT and drama, heightening concern over future capacity gaps if theatrical production rebounds.

With budgets rising and the domestic market capped, producers and investors prioritize risk minimization through proven genres, franchise IP, and fandom-anchored projects. The approach curbs losses now but can suppress creativity later. Trade consensus points to three levers: invigorating private investment, reforming public funds, and expanding global co-productions. The mid-budget program is an early signal of that structural pivot.

The financing landscape of the Korean film industry in early 2025 reflects a marked shift toward conservatism. For much of the past two decades, the sector relied on a main-investment system dominated by vertically integrated distributors that provided relatively stable capital flows. That framework has weakened substantially in the post-pandemic era. Falling admissions, diminished box office profitability, and the rise of OTT platforms have eroded investor confidence, reducing the availability of private capital. As a result, producers and distributors are actively exploring alternative sources of funding, while demands for stronger government support and institutional reform are growing louder.

“Hard money” has become increasingly scarce. In 2023, the average profit margin for commercial features dropped below –30%, prompting venture capital firms and institutional investors to retreat from film into other industries with more predictable returns. Private equity inflows have declined, and the pace of new film fund formation has slowed considerably. Capital that is deployed is funneled primarily toward large-scale projects perceived as safe bets, leaving experimental works and first-time directors marginalized. This trend has reinforced a climate of risk aversion, while also encouraging producers to pursue international co-productions that allow them to tap into foreign subsidies and tax incentives.

On the “soft money” side, government intervention remains critical. The National Film Fund, established in 2011, continues to provide substantial backing, covering more than 20% of production budgets for films released in 2024. Yet the fund is designed primarily to support mid- and low-budget titles. This has created structural limitations: commercial blockbusters and globally oriented projects often fall outside its scope, forcing producers to rely on overseas pre-sales or foreign investors. Industry stakeholders caution that this reliance is problematic, as the international market for Korean films has cooled compared with pre-pandemic peaks, making it harder to secure premium licensing fees. Calls are mounting for the fund to recalibrate its mandate and better align with current market realities.

Overall, the financing climate in H1 2025 is defensive. Companies are reluctant to expand slates, and capital gravitates toward proven genres, sequels, and IP with established fan bases. Nonetheless, new financing strategies are emerging. Some investors are experimenting with joint main-investment structures, pooling risk across multiple backers. Others are focusing on IP-driven content—particularly webtoon adaptations—that provide cross-platform value. Cost optimization in production and a push for global co-productions are also becoming more visible. Together, these developments highlight both the constraints and the adaptive strategies shaping the Korean industry’s financing models as it navigates a more uncertain future.

The Korean distribution market in H1 2025 was characterized by defensive strategies aimed at minimizing risk. With heightened uncertainty around box office performance, distributors adjusted release windows and screening periods more flexibly to reduce potential losses. This cautious approach was not limited to conglomerate-backed majors but extended to mid-sized distributors as well. As a result, the traditional clustering of big releases around peak seasons such as Lunar New Year, summer, or Chuseok was largely absent. Instead, many titles opted for off-season releases to avoid direct competition.

OTT platforms have become a decisive factor in shaping distribution strategy. Several titles adopted shortened holdback windows, appearing on streaming services only two to three weeks after theatrical release. While this accelerates recoupment through a mix of box office and digital rights sales, it also limits the long-tail potential of theatrical runs. In parallel, smaller distributors struggled to maintain operations: declining production volume and poor box office returns forced some to scale back distribution functions or pivot entirely to OTT release.

Domestic films accounted for 47.2% of total box office in H1 2025, with foreign films at 52.8%, reflecting a slight erosion in local market share. The absence of major Korean tentpoles, combined with the strength of imported blockbusters such as Mission: Impossible – Dead Reckoning Part Two and Mickey 17, drove the shift.

Structurally, the market remains dominated by vertically integrated multiplex-linked majors. CJ ENM, Lotte Cultureworks, and Showbox continue to exert strong influence, handling both local productions and titles from Hollywood studios, with significant leverage over release schedules and screen allocations. These majors operate independently without direct state subsidies, whereas smaller and independent distributors often rely on support from the Korean Film Council, including distribution grants and assistance for participation in international markets.

In H1 2025, the Korean theatrical market showed signs of retreat after two to three years of gradual post-pandemic recovery. Total box office revenue reached KRW 407.9 billion with 42.5 million admissions, down 33.2% and 32.5% year-on-year. The decline was especially steep for domestic titles: revenues nearly halved compared with the previous year, reflecting the absence of mega-hits on the scale of Exhuma or The Roundup 4. The top-performing local release, Yadang: The Snitch, drew 3.36 million admissions—respectable but insufficient to offset the overall downturn.

Exhibition infrastructure also contracted. By the end of 2024, Korea operated 570 cinemas, down three from the previous year, with 3,296 screens (–75) and 437,000 seats (–5.6%), marking a third consecutive year of decline. Analysts cite OTT expansion, shifting viewing habits among audiences in their 20s and 30s, and fewer theatrical releases as contributing factors. Multiplex operators, however, continue to differentiate through premium formats. Special auditoriums increased 13.6% year-on-year to 1,152 in 2024, with IMAX and 4D formats leading growth.

Average ticket price, calculated by dividing total box office revenue by admissions, fell from KRW 10,080 in 2023 to KRW 9,599 in H1 2025, despite a list price of around KRW 15,000. This reflects widespread use of discount promotions, which depress effective ticket yields even as headline prices rise. Premium formats accounted for KRW 29.3 billion in sales, down 23.2% year-on-year, but their share of total box office edged up to 7.2%. IMAX generated nearly half of this (KRW 13.1 billion), though both admissions and revenue fell double digits. The figures underscore the continuing appeal of immersive experiences, though content shortages may limit growth momentum.

Cinemas are investing in technology to sustain competitiveness, introducing laser projectors, Dolby Atmos immersive sound, LED screens, and even pilot VR/AR auditoriums. Chains are also experimenting with differentiated programming. Megabox launched its Mega Only label for exclusive theatrical runs, scoring a notable success with Attack on Titan The Movie: THE LAST ATTACK, which drew 920,000 admissions and KRW 9.5 billion. Lotte Cinema expanded curated festivals and arthouse screens, while CGV focused on premium hall renovations, regional content, and in-theater events to boost repeat visits.

Screen allocation patterns are also shifting. Word-of-mouth hits are enjoying longer runs, reducing extreme concentration. The top screen share in H1 2025 was 55% for Mission: Impossible – Dead Reckoning Part Two, down sharply from the 82% peak of The Roundup 4 a year earlier. This suggests a gradual move away from over-concentration toward a more balanced distribution model.

Korea’s film technology and production services sector has become a critical pillar of the country’s creative industries, spanning film, broadcasting, and digital content. As AI and digital transformation reshape the ecosystem, investment in R&D, infrastructure, skilled labor, and policy support is accelerating. According to the Korea Creative Content Agency’s 2025 AI Content Insight, the diffusion of AI has broadened participation in creation and democratized production tools. Collaboration between large corporations and startups is gaining momentum, supported by government strategies that promote full-cycle innovation.

Technical services such as VFX, CGI, color grading, and audio post-production are increasingly central to film production. Leading companies like Dexter Studios, Digital Idea, and Red Rover are active players with proven competitiveness in global projects. Facilities such as Songam Complex in Jeonju and Studio Lennon have expanded post-production capacity with state-of-the-art editing suites, color grading rooms, and sound stages.

AI applications now extend across the entire workflow—from script development and storyboarding to scheduling, automated VFX, dubbing, and sound editing. GPT-based language models, text-to-speech, video synthesis, and digital humans are widely adopted. Beem Studio and CJ ENM, for example, have integrated AI tools throughout planning, shooting, and editing, while startups are supplying a diverse range of solutions to strengthen the collaborative ecosystem.

Virtual production is also advancing rapidly. LED volume stages and digital backlots are enabling real-time rendering for immersive content, opening opportunities in areas such as metaverse production. Regional film commissions are upgrading infrastructure by expanding equipment libraries and enhancing location databases.

Despite these advances, Korea still lags behind global benchmarks in R&D investment and productivity. PwC’s 2025 Industry Outlook notes that the sector’s value-added ratio was 58% in 2022, lower than the U.S. (77%) and the U.K. (79%). Nevertheless, Korea’s film and media tech services recorded an output multiplier of 0.30, underscoring their growing role as a driver of industrial innovation.

The sector is rapidly evolving through infrastructure upgrades, AI integration, and strengthened collaboration between major studios and SMEs. With deeper R&D investment, workforce development, and policy support, Korea’s production services industry is poised to deliver more sophisticated solutions and expand its footprint in global markets.

In H1 2025, the most striking shift in Korea’s film consumption landscape was the dominance of streaming platforms. Netflix, Disney+, Tving, and Wavve are no longer complementary distribution channels but the central axis of film circulation. Global OTT operators increasingly view Korea as a strategic hub for their Asia strategy, expanding direct and indirect collaborations with local studios.

According to KOTRA’s OTT Platforms and Korea’s Original Content (June 2025), Netflix secured roughly 14.2 million subscribers in Korea, maintaining its clear lead. Coupang Play followed with 7.6 million, Tving with 6.3 million, and Wavve with 2.7 million, while Disney+—a late entrant—garnered 2.4 million subscribers, demonstrating meaningful traction. Data from the Korea Information Society Development Institute (Broadcasting Industry Census, 2024) shows OTT usage among Korean adults rose from 72.2% in 2020 to 89.2% in 2024, marking a decisive shift from traditional TV to digital-first viewing.

Market realignments are underway. As noted in the Korea Creative Content Agency’s Broadcasting and OTT Trends (August 2025), Coupang Play and Tving have reshaped the market through bundled memberships and aggressive sports rights acquisitions. Tving has scaled rapidly through CJ ENM’s production capabilities and partnership strategies, while Coupang Play has grown its base through exclusive European football broadcasting. Wavve leverages its public-broadcaster ownership structure to emphasize news and drama, while Netflix—though showing slower subscriber growth—retains a commanding lead in content investment, reportedly committing KRW 700 billion to Korean programming in H1 2025 alone.

Content trends fall into three categories. First, globally resonant yet distinctly Korean originals continue to anchor demand, following the legacy of Squid Game with titles such as K-pop Demon Hunters. Second, IP-driven projects based on webtoons or dramas are sustaining fandom-driven demand. Third, non-fiction formats—documentaries and reality shows—are expanding, targeting niche audiences identified through data analytics.

The government is actively shaping this digital ecosystem. Policy moves balance stricter regulation—on network usage fees and copyright protection—with expanded support for global expansion of K-content. In early 2025, the Ministry of Culture, Sports and Tourism introduced tax incentives for domestic OTT producers, while the Korea Creative Content Agency launched a global co-production fund. Looking ahead, the government plans to establish a KRW 1 trillion “K-Content Media Strategy Fund” by 2028 to strengthen domestic platforms and boost content production. These measures are widely interpreted as efforts to bolster Korean OTT platforms against the dominance of multinational giants such as Netflix.

The paradigm of international co-production is rapidly evolving. Whereas Korean cinema once focused largely on overseas remakes and distribution, today’s model increasingly emphasizes co-creation with global OTT platforms from the script stage onward. This collaborative system brings together creators, capital, and platforms from multiple countries as equal partners. At venues such as the Busan Content Market, Korean producers have signed a stream of MOUs and investment deals with companies from Japan, Singapore, and Southeast Asia, covering location access, staff and technology exchanges, and simultaneous global releases

According to the Korean Film Council’s report The Status of Asian Co-Productions and Policy Support 2010–2024, 339 cases were documented across the region, including co-productions (43), co-investments (20), foreign capital inflows (45), location-based collaborations (88), and remakes (31). While the 2010s were dominated by Korea–China ventures, these collapsed under geopolitical restrictions and the pandemic. Since 2023, partnerships have shifted toward Southeast Asia, India, and Japan.

Recent examples illustrate this diversification. Mystery Pictures’ The Ghost Station combined a Korean webtoon IP with Japanese financing and post-production, achieving box office success. Cross Pictures partnered with Indian and Japanese firms on co-planning and global OTT distribution. CJ ENM has established local subsidiaries in Vietnam and Indonesia, producing localized hits such as the Vietnamese remake of Intimate Strangers.

Neighboring countries are also strengthening support schemes: Japan’s international co-production subsidy (covering 20% of budgets), Singapore’s International Co-Production Fund (ICF), and Hong Kong’s cooperation fund all require local crew participation, emphasizing human exchange and cultural integration over capital alone.

Korean regions and agencies are joining the competition. Jeju Province now offers rebates covering 30% of local spend (up to KRW 100 million), alongside new soundstages and logistical support. Yet industry voices stress that Korea still lags behind regional peers in systemic support. The Korean Film Council highlights the urgent need for a sustainable co-production framework, stronger local talent integration, and policy flexibility for global-scale projects. Without a full-cycle approach—spanning planning, production, distribution, and workforce training—Korea risks losing ground in the competition for co-production leadership.