By Kim Jae-won
Banks are turning their eyes to movies, investing directly in blockbuster films, making loans for producers and arranging investments for filmmakers as part of their strategy to diversify revenue sources amid low interest rates, officials said Friday.
The Industrial Bank of Korea (IBK) has led the trend by investing hundreds of billions of won in films, soft dramas and musical concerts every year. This summer, the state-run lender invested 3 billion won ($2.7 million) in a Korean War movie titled Operation Chromite and 1.5 billion won in Train to Busan, a zombie movie happening on a KTX train. Operation Chromite is a war file based on the true story of the Battle of Inchon, a military operation led by American General Douglas MacArthur in command of all U.N. Forces in Korea. Train to Busan is a zombie movie describing passengers’ fights against zombies on a KTX train from Seoul to Busan.
Both of them are drawing large audiences to the big screen thanks to their thrilling stories and eye-catching scenes. According to the Korea Film Council, Train to Busan has attracted 7 million people as of Friday in less than 10 days since its first screening on July 20. Operation Chromite has also drawn 830,000 in three days since Tuesday, expecting to be a big hit in the season.
“We are strengthening our support for cultural content creating high values and quality jobs,” said Kim Yoon-kyu, an IBK spokesman. “The cultural content business has huge growth potential in Korea which has many creative human resources.”
The investments come amid Korean movies, soft dramas and pop songs rising in popularity throughout Asia, named hallyu, or the Korean wave. A couple of years ago, Korean singer Psy became a global sensation with his horse dance for Gangnam Style, proving that Korean pop culture is appealing to people on the global stage.
IBK’s investments is paying off. A 2015 movie Veteran earned the bank with 244 percent in profits as of June, showing how powerful a movie is an investment for a bank. Miss Granny, a 2014 film on a grandmother’s journey back to her 20s, posted a 230 percent profit for IBK.
As IBK paves the way for lenders to invest in movies, its rivals are following. In May, the Export-Import Bank of Korea (Eximbank) invested a combined 25 billion won in two private equities investing in cultural contents. One of them is focused on blockbuster soft dramas while the other is producing cultural content for Chinese broadcasters.
The Eximbank is also a sponsor of the Korean soft drama, Descendants of the Sun, a military drama describing a love story between a captain and a nursing officer, featuring actor Song Joong-ki and actress Song Hye-kyo. It became a big sensation both at home and abroad. The Eximbank extended 3 billion won in loans to Next Entertainment World, a producer of the drama.
“We expect another big hit with our support for Saimdang, a soft history drama,” said Cho Joong-hyun, an Eximbank spokesman. The lender extended a 1 billion won in loans to the drama’s producer. Actress Lee Young-ae plays the main character Saimdang, an artist and essayist in the 16th century in the Joseon Kingdom.
KEB Hana Bank is using movies to promote its savings accounts. The lender offers better interest rates for customers opening new savings accounts related to a specific movie when its audience tops a certain level.
For instance, it launched a special savings account for The Tunnel, offering an interest rate of 1.55 percent when the number of the thriller movie’s audience surpasses 10 million by the end of September.
“This is a win-win strategy because the movie gets promoted through the event while we can sell more savings accounts thanks to the movie,” said a KEB Hana spokesman. “We sold many accounts in the past for hosting an event with The Admiral: Roaring Currents.”