“The break even point can never be reached if the movie premiers in theaters,” said the CEO of the movie production company speaking of South Korean film distributor Merry Christmas’s decision to release this year’s much anticipated SF blockbuster “Victory” on Netflix.
The coronavirus pandemic has made playing movies in theaters a significant risk in general, but now the risk is higher because movie theaters can only use half of their capacity due to new restrictions imposed to curb the third wave. “Premiering on Netflix gives you room to breathe as billions or even tens of billions of won are tied because of release date delays,” the CEO said with a sigh.
The biggest reason why production companies and distributors turn to Netflix is to reach the break even point. “Victory” cost 24 billion won to produce including promotion costs, which means the movie needs to be seen by 5.8 million people to make up for production costs. According to sources from the industry, Merry Christmas received billions of won from the streaming service in addition to the production cost. “Time to Hunt” whose production cost 11.5 billion won including promotion costs was sold for 12 billion dollars to Netflix. It is said the movie would not have been able to make a profit if it had been released in theaters, which would have required selling 31 million tickets.
There were plans to produce spinoffs of “Victory” including films, web comics and dramas. A further delay in the release date of the movie would have put off the production of the spinoffs, leading to a more significant loss. “We were going to produce spinoffs for different characters based on the feedback,” said a source from Merry Christmas. “The plan has been brought to a halt due to the release date delay.”
Even distributors that own movie theaters are heading to Netflix as a growing number of new releases are being postponed. “Cha In-pyo,” a movie invested and distributed by Lotte Cultureworks starring actor Cha In-pyo, was going to premier in theaters but changed the plan. It is the first time a distributor that owns a cinema debuts its movie on Netflix. “Mogadishu” and “Boston 1947,” which Lotte Cultureworks planned to release this year, will be released next year.
Jae-Hee Kim firstname.lastname@example.org