DOCSLIB.ORG

Vertical Integration and Market Foreclosure in the Korean Movie Industry

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Vertical Integration and Market Foreclosure in the Korean Movie Industry Vertical Integration and Market Foreclosure in the Korean Movie Industry Yusun Hwang∗ November, 2013 Abstract I examine the exhibition behavior of movie theaters in the Korean movie industry in order to investigate the influence of vertical integration on competition. I focus specifically on the choice of films, screen allocation, and movie run stopping over different vertical structures. Because, in the Korean movie industry, not only can we observe the same movie being shown in both integrated theaters and unintegrated theaters but also observe the same theater showing movies from distributors of different vertical structures, I use movie and theater fixed effects to control for the unobserved quality of movies and theaters. The empirical results suggest that vertically integrated theaters are more likely to choose their affiliated movies than other competing movies, and they choose them more often than other competing theaters do. In addition, integrated theaters give their own movies a greater number of screenings over longer time periods. This effect is mostly restricted to company operated theaters, and it is greater when movies are expected to get positive word-of-mouth as well as when underlying demand is high such as holidays. I argue that these results are not driven by the matching between movie and theater based on anything other than integration status, and that vertical integration leads to the foreclosure, denial of access, of independent distributors to integrated theaters, to the detriment of consumers. JEL-Classification: L14, L22, L42, L82 Keywords: Vertical Integration, Vertical Foreclosure, Movie Industry ∗Department of Economics, University of Southern California, Los Angeles, CA 90089. Email: [email protected] 1 1. Introduction The possibility of vertical foreclosure in vertical mergers has been a major concern of antitrust authority investigations. Theories suggest that for the purpose of gaining monopoly power, verti- cally integrated firms may deny an access of competing downstream (upstream) firms to interme- diate goods (downstream outlets). They also suggest that vertical foreclosure can survive as an equilibrium in an oligopoly setting, indicating that vertical integration can harm consumer welfare by raising price of final goods.(Ordover et al. (1990), Salinger (1988), Hart et al. (1990), Choi and Yi (2000), Chen (2001)) Empirical studies have provided evidence that vertical integration gives rise to foreclosure. For example, Ford and Jackson (1997), Waterman and Weiss (1996), and Chipty (2001) found that vertically integrated cable operators in the cable television industry were more likely to carry their affiliated networks. In particular, Chipty (2001) demonstrated that Time Warner, which owns the premium movie service, HBO, tends to exclude AMC, the basic movie service, from its basic package offer. In addition, Goolsbee (2007) found that broadcast networks are more likely to carry their own shows than independent programming. Regarding to movie industry, Gil (2008) and Fu (2009) examined the effect of vertical integration between distributors and exhibitors in the Spanish and in the Singapore movie industry respectively. Both studies found that vertically integrated theaters showed their affiliated movies longer than unintegrated theaters did. However, the existence of vertical foreclosure is, by itself, not sufficient to allow for the con- clusion that vertical integration harms consumers. In fact, in economics, the effects of vertical integration on consumer welfare have long been a source of debate. Theories predict (Ordover et al. (1990), Salinger (1988)) that vertical integration may have efficiency-enhancing effects by reducing transaction costs or eliminating successive monopoly mark-ups, and as a result, vertical integration can improve consumer welfare by lowering prices. Hence, the welfare effect of vertical integration depends on the relative importance of anti-competitive effect of vertical foreclosure and efficiency gains. A few studies have attempted to assess the consequences of a vertical merger, providing mixed results.1 Goolsbee (2007) found that broadcast networks apply lower standards to carrying their 1For a survey of empirical studies, refer to Lafontaine and Slade (2007) and Rey and Tirole (2007) 2 own shows than to carrying independent programming. Specifically, independent programs need to generate over 15 percent higher revenues from advertising than comparable in-house programs in order to get on the air, suggesting that the foreclosure effect outweighs efficiency gains. On the other hands, Chipty (2001), in her paper on the cable TV industry, concluded that vertical integration does not harm but rather benefits consumers. By comparing consumer welfare across integrated and unintegrated markets, she argued that efficiency gains dominate losses from foreclosure. Corts (2001) studied how vertical integration in the movie industry between producers and distributors affected competition of movie release-date scheduling. He demonstrated that integrated firms inter- nalize the negative externality of close release dates, indicating that vertical integration improves the efficiency. Gil (2008), also, interpreted his findings as efficiency gains in his investigation of vertical integration between movie distributors and exhibitors. He argued that integrated theaters run their own movies longer than other movies, and longer than unintegrated theaters do, and concluded that vertical integration solves the distortion of movie run length created by the revenue sharing contracts in the movie industry. However, this kind of interpretation should be made with caution because theaters face capacity constraints caused by having a limited number of screens. To retain their own movies for a longer period of time, integrated theaters should sacrifice revenues generated by other movies that otherwise would have been shown, which could be interpreted as a reduction in total box-office revenues as well as consumer welfare. A major obstacle in assessing the effects of vertical integration is that we hardly notice that com- panies with different organizational forms handle the same set of products from both integrated firms and independent firms in the same market. When each product is a differentiated good, which holds in many industries, controlling product quality is crucial to demand estimation, but observables often explain little about product quality. If we can observe that downstream firms do business with the same set of products, we might attribute observed difference between integrated downstream and unintegrated downstream to the effects of vertical integration by controlling prod- uct quality. This is the case in the cable TV industry in which cable TV providers offer different sets of channels chosen from the same set of channels available. However, the cable TV industry is virtually monopolized in many markets. Several cable TV providers operate nationwide, but it is common that a specific provider is the only option that consumers can choose in their residential area. In that case, the comparison of integrated markets to unintegrated markets could suffer from 3 differences in underlying demand over markets in the assessment of the consequences of vertical integration. In this spirit, the Korean movie industry provides several advantages for the analysis of vertical integration. First, because two major domestic distributors own multiplex chains, it is possible to observe how integrated theaters give preferential treatment to their own movies against other movies supplied by rival distributors compared to unintegrated theaters. That is, we can observe four different combinations between movies and theaters: (1) integrated movies shown in integrated theaters, (2) integrated movies shown in unintegrated theaters, (3) unintegrated movies shown in integrated theaters, and (4) unintegrated movies shown in unintegrated theaters. This circumstance enables us to control unobserved movie quality2 as well as theater quality by using movie-theater fixed effects. Theater fixed effects also control the difference in underlying demand for movies over geographical markets. With these fixed effect, the effects of vertical integration are determined by difference in differences approach in the level of movie by theater. Second, it is distributors and not movie theaters that promote movies nationwide, suggesting that theaters in the same geographical market face the homogeneous demand for each movie. Al- though each theater might enjoy some degree of market power because of its membership programs, it is difficult to conclude that potential consumers at an integrated theater have strong preference for movies from its affiliated distributor. Moviegoers are usually concerned about the contents they can see such as trailers, casting, and directors, but not about what is happening behind the film like which company distributes the film. In addition, movie theaters are located close to each other in many markets, especially in urban areas in Korea. In the extreme case, two different theaters are operating within 100-meter distance. It is hard to believe that integrated theaters draw different sets of consumers based on their preference. Hence, the observed differences in exhibition behavior between integrated and unintegrated theaters can be attributed to the practice of discrimination by means of vertical integration under the assumption that in-house promotion by theaters has little impact on movie demand.3 Third, contracts between distributors and exhibitors are fairly
Load more

Recommended publications
  • Power of the Korean Film Producer: Park Chung Hee’S Forgotten Film Cartel of the 1960S Golden Decade and Its Legacy
    Volume 10 | Issue 52 | Number 3 | Article ID 3875 | Dec 24, 2012 The Asia-Pacific Journal | Japan Focus Power of the Korean Film Producer: Park Chung Hee’s Forgotten Film Cartel of the 1960s Golden Decade and its Legacy Brian Yecies, Ae-Gyung Shim An analysis of the tactics adopted by the industry reveals the ways in which producers Key words: Korean cinema, filmnegotiated policy demands and contributed to production, film policy, Park Chung Hee, an industry “boom” – the likes of which were Shin Sang-ok not seen again until the late 1990s. After censorship was eliminated in 1996, a new Power of the Producer breed of writer-directors created a canon of internationally provocative and visuallySince the early 1990s, Korean film producers stunning genre-bending hit films, and new and have been shaping the local film industry in a established producers infused unprecedented variety of ways that diverge from those venture capital into the local industry. Today, a followed in the past. A slew of savvy producers bevy of key producers, including vertically and large production companies have aimed to integrated Korean conglomerates, maintain produce domestic hits as well as films for and dominance over the film industry whilewith Hollywood, China, and beyond, thus 2 engaging in a variety of relatively near-leading the industry to scale new heights. They transparent domestic and internationaldiffer markedly from those producers and companies that, throughout the 1970s and expansion strategies. Backing hits at home as 1980s, were primarily focused on profiting well as collaborating with filmmakers in China from the importation, distribution and and Hollywood have become priorities.
    [Show full text]
  • The Next Growth Strategy for Hallyu 79
    Lee & Kim / The Next Growth Strategy for Hallyu 79 THE NEXT GROWTH STRATEGY FOR HALLYU A Comparative Analysis of Global Entertainment Firms Yeon W. Lee Seoul School of Integrated Science and Technology [email protected] Kyuchan Kim Korea Culture and Tourism Institute [email protected] Abstract Previous policy approaches on Hallyu have been focused on the role of government engagement, particularly in fostering diversity and equal business opportunities for small-and-medium enterprises (SMEs). However, a more strategic approach to the cultural industries should be implemented by carefully examining the role of the private sector, particularly the role of large enterprises (LEs). his is important because LEs have an overarching and fundamentally diferentiated role in increasing the size of industry through their expansive value-creating activities and diversiied business areas. his study focuses on the complementary roles of SMEs and LEs in facilitating the growth of Hallyu by bringing in the perspective of value chain diversiication and the modiied value chain framework for the ilm industry. By conducting a comparative analysis of the global entertainment irms in the US, China, and Japan, this study reveals how LEs in the global market enter and explore new industries within culture and continue to enhance their competitiveness. By forming a business ecosystem through linking their value-creating activities as the platform of network, this study looks into the synergistic role among enterprises of diferent size and scale and suggests that Korea’s policy for Hallyu should reorient toward a new growth strategy that encourages the integrative network of irms where the value activities of LEs serve as the platform for convergence.
    [Show full text]
  • CJ Corporation (001040 KS) BUY (Upgrade)
    EQUITYEQUITY RESEARCH RESEARCH 5 Mar 2008 CJ (001040 KS) CJ Corporation (001040 KS) BUY (Upgrade) Waiting for positive signals as it converts to a holding company Patrick Kim (82-2-769-3809) [email protected] Upgrade to BUY, and boost TP to W120,000 We have a BUY rating on CJ Corporation (CJ), setting our target price at W120,000. Based Share price (Mar 5) W73,300 on our sum-of-parts valuation we derived our target price by adding the per share stake value Six-month TP W120,000 of W131,650 to the per share tangible asset value of W5,080, and then deducting W16,260 Par value W5,000 per share in borrowings. KOSPI 1,676.18 52 week high/low W147,968/W64,000 It has been half a year since it converted to a holding company structure Capital stock In Sep 2007, CJ began to convert to a holding company with a subsidiary spin-off. Then in W137.7bn (Common stock) Dec 2007, as it completed a tender offer for shares of CJ CheilJedang, CJ emerged as an Market cap W2,062.6bn undisputed holding company. As such, the company is comprised of a total of 15 subsidiaries, Foreign ownership 15.5% including three food production and food service companies, five E&M (Entertainment & Performance (%) Absolute Relative Media) companies, three new retail businesses, and three companies working in either the 1 m 0.4 1.3 financial industry or the infrastructure industry. Meanwhile, it has six listed subsidiaries and 6 m -11.5 1.3 nine unlisted ones.
    [Show full text]
  • Christian Communication and Its Impact on Korean Society : Past, Present and Future Soon Nim Lee University of Wollongong
    University of Wollongong Thesis Collections University of Wollongong Thesis Collection University of Wollongong Year Christian communication and its impact on Korean society : past, present and future Soon Nim Lee University of Wollongong Lee, Soon Nim, Christian communication and its impact on Korean society : past, present and future, Doctor of Philosphy thesis, School of Journalism and Creative Writing - Faculty of Creative Arts, University of Wollongong, 2009. http://ro.uow.edu.au/theses/3051 This paper is posted at Research Online. Christian Communication and Its Impact on Korean Society: Past, Present and Future Thesis submitted in fulfilment of the requirements for the award of the degree of Doctor of Philosophy University of Wollongong Soon Nim Lee Faculty of Creative Arts School of Journalism & Creative writing October 2009 i CERTIFICATION I, Soon Nim, Lee, declare that this thesis, submitted in partial fulfilment of the requirements for the award of Doctor of Philosophy, in the Department of Creative Arts and Writings (School of Journalism), University of Wollongong, is wholly my own work unless otherwise referenced or acknowledged. The document has not been submitted for qualifications at any other academic institution. Soon Nim, Lee 18 March 2009. i Table of Contents Certification i Table of Contents ii List of Tables vii Abstract viii Acknowledgements x Chapter 1: Introduction 1 Chapter 2: Christianity awakens the sleeping Hangeul 12 Introduction 12 2.1 What is the Hangeul? 12 2.2 Praise of Hangeul by Christian missionaries
    [Show full text]
  • Analecta Nipponica
    5/2016 Analecta Nipponica JOURNAL OF POLISH ASSOCIATION FOR JAPANESE STUDIES Analecta Nipponica JOURNAL OF POLISH ASSOCIATIOn FOR JapanESE STUDIES 5/2016 Analecta Nipponica JOURNAL OF POLISH ASSOCIATIOn FOR JapanESE STUDIES Analecta Nipponica JOURNAL OF POLISH ASSOCIATIOn FOR JapanESE STUDIES Editor-in-Chief Alfred F. Majewicz Nicolaus Copernicus University, Toruń Editorial Board Agnieszka Kozyra University of Warsaw, Jagiellonian University in Kraków Iwona Kordzińska-Nawrocka University of Warsaw Editing in English Aaron Bryson Editing in Japanese Fujii Yoko-Karpoluk Editorial Advisory Board Moriyuki Itō Gakushūin University in Tokyo Mikołaj Melanowicz University of Warsaw Sadami Suzuki International Research Center for Japanese Studies in Kyoto Hideo Watanabe Shinshū University in Matsumoto Estera Żeromska Adam Mickiewicz University in Poznań The publication was financed by Takashima Foundation Copyright© 2015 by Polish Association for Japanese Studies and Contributing Authors. ANALECTA NIPPONICA: Number 5/2015 ISSN: 2084-2147 Published by: Polish Association for Japanese Studies Krakowskie Przedmieście 26/28, 00-927 Warszawa, Poland www.psbj.orient.uw.edu.pl University of Warsaw Printers (Zakłady Graficzne UW) Order No. 1312/2015 Contents Editor’s preface ...............................................................7 ARTICLES Iijima Teruhito, 日本の伝統芸術―茶の美とその心 .............................11 English Summary of the Article Agnieszka Kozyra, The Oneness of Zen and the Way of Tea in the Zen Tea Record (Zencharoku) .............................................21
    [Show full text]
  • Volume 8, Number 1
    POPULAR CULTURE STUDIES JOURNAL VOLUME 8 NUMBER 1 2020 Editor Lead Copy Editor CARRIELYNN D. REINHARD AMY DREES Dominican University Northwest State Community College Managing Editor Associate Copy Editor JULIA LARGENT AMANDA KONKLE McPherson College Georgia Southern University Associate Editor Associate Copy Editor GARRET L. CASTLEBERRY PETER CULLEN BRYAN Mid-America Christian University The Pennsylvania State University Associate Editor Reviews Editor MALYNNDA JOHNSON CHRISTOPHER J. OLSON Indiana State University University of Wisconsin-Milwaukee Associate Editor Assistant Reviews Editor KATHLEEN TURNER LEDGERWOOD SARAH PAWLAK STANLEY Lincoln University Marquette University Associate Editor Graphics Editor RUTH ANN JONES ETHAN CHITTY Michigan State University Purdue University Please visit the PCSJ at: mpcaaca.org/the-popular-culture-studies-journal. Popular Culture Studies Journal is the official journal of the Midwest Popular Culture Association and American Culture Association (MPCA/ACA), ISSN 2691-8617. Copyright © 2020 MPCA. All rights reserved. MPCA/ACA, 421 W. Huron St Unit 1304, Chicago, IL 60654 EDITORIAL BOARD CORTNEY BARKO KATIE WILSON PAUL BOOTH West Virginia University University of Louisville DePaul University AMANDA PICHE CARYN NEUMANN ALLISON R. LEVIN Ryerson University Miami University Webster University ZACHARY MATUSHESKI BRADY SIMENSON CARLOS MORRISON Ohio State University Northern Illinois University Alabama State University KATHLEEN KOLLMAN RAYMOND SCHUCK ROBIN HERSHKOWITZ Bowling Green State Bowling Green State
    [Show full text]
  • Jeollabuk-Do - Gochang•Buan•Gimje
    Jeollabuk-do - Gochang•Buan•Gimje 1. Seonunsa Temple, Gochang 2. Gochang Eupseong Fortress 3.Buan Naesosa Temple 4. Chaeseokgang and Jeokbyeokgang, Buan 5. Byeokgolje in Gimje 6. GimjeGeumsansa Temple Seonunsa Temple, Gochang 1. Dosolcheon, the Road that Cleanses Your Soul Title The Road that Cleanses Your Soul Narration: Welcome to Seonunsa Temple in Gochang. The distance between Seonunsa Temple entrance and Dosoram Hermitage is 3.2 kilometers. Follow the trail along Dosolcheon Ravine, if you want to climb Seonunsan Mountain. The name 'Seonunsan' means “a mountain to meditate in the clouds”. It's also called Dosolsan Mountain. It’s a Buddhist name, meaning, “learn the teachings of Buddha”. As its name suggests, it’s a special mountain for those wishing to attain enlightenment and live by the Buddhist doctrines. If you’re here in the summer, the stream in the ravine makes a great place to rest in the shades. After the heat of the summer, you’ll see red spider lilies all around you as you walk on the lower trail of the mountain, making your walk more pleasant. Some people think it's sad that the flowers bloom only after all the leaves have fallen. More people come to this place in the early autumn to see the red tinged leaves. In your walk on the trail, listen to the clear sound of the water flowing. It may relax your mind. 2. A Cup of Tea at Manseru Pavilion Title A Cup of Tea for You Narration: Take a short walk along the trail flanked by maple and zelkova trees, and you’ll reach Cheonwangmun Gate before you know it.
    [Show full text]
  • R Reviving the Times of Namsadang, Korea's Traditional Folk
    r Reviving the Times of Namsadang, Korea’s Traditional Folk Performance Troupe, through Children’s Stories (Author/ Lim Jeong-jin) Republic of Korea 1. The Crisis of Korea’s Traditional Folk Performance Through the generations Koreans have joyfully lived their lives with singing and dancing. While the royal court and the intellectual class considered the liberal arts such as writing poems, playing instruments and drawing pictures important, they also enjoyed the performances of professional folkentertainers as well. Commoners also enjoyed coming together to sing and dance while working and also during the season’s holidays. Passing on cultural assets that reflects a country’s native history to descendants is a very important duty. It is important to preserve and protect tangible cultural assets such as architectural works from damage. However, because traditional performing arts can only be preserved if it 1 is taught, practiced and performed in front of people, so it can be difficult to protect. The legacy of the traditional performing arts was nearly cut off as Korea entered the 20th century and was colonized by Japan for 36 years and afterwards Korea was heavily influenced by Western civilization After overcoming these difficulties Korean traditional folk performances are being continued precariously only through professional folk performers. It is now difficult to see images of a joyous community in which everyone in the neighborhood comes together singing and dancing with the sounds of drums. Korean children’s literature authors are putting all their effort into reviving Korea’s various traditional folk cultures through books. Thus, on October 2012 the author announced a children’s book titled, “Baudeogi” based on the experiences of wandering troupe made up of all males, travelling entertainers that specialize in folk performances.
    [Show full text]
  • Open Pbaxter Thesis Final110308.Pdf
    The Pennsylvania State University The Graduate School College of Communications A COMPARATIVE STUDY OF THE U.S. AND KOREAN FILM INDUSTRIES: HISTORY, STRUCTURE, AND FINANCE A Thesis in Media Studies by Patrick D. Baxter © 2008 Patrick D. Baxter Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Arts December 2008 This thesis of Patrick D. Baxter was reviewed and approved* by the following: Krishna Jayakar Associate Professor of the Department of Telecommunications Thesis Adviser Amit Schejter Assistant Professor of the Department of Telecommunications C. Michael Elavsky Assistant Professor of the Department of Film-Video and Media Studies John S. Nichols Professor of the Department of Film-Video and Media Studies Associate Dean for Graduate Studies and Research *Signatures are on file in the Graduate School iii ABSTRACT This project is a comparative case-study of the U.S. and Korean (South Korea) film industries along historical, structural, and financial dimensions. The genesis of this thesis came through an overall fascination with the film industry globally as nations compete and cooperate with each other, as well as contend with the dominance of the U.S. film industry. It uses the industrial organization model focusing primarily on "market structure." Further, it applies A.J. Scott’s bipartite (major, independent) and tripartite (major, subsidiary, independent) models of the U.S. film industry. The analysis is mainly descriptive being informed by historical development. To elaborate on market structure, samples of studio/mainstream and independent films were collected in both the U.S. and Korean film industries. The samples were analyzed along production company affiliation, distribution affiliation, sources of funding, and other elements.
    [Show full text]
  • South Korean Cinema and the Conditions of Capitalist Individuation
    The Intimacy of Distance: South Korean Cinema and the Conditions of Capitalist Individuation By Jisung Catherine Kim A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Film and Media in the Graduate Division of the University of California, Berkeley Committee in charge: Professor Kristen Whissel, Chair Professor Mark Sandberg Professor Elaine Kim Fall 2013 The Intimacy of Distance: South Korean Cinema and the Conditions of Capitalist Individuation © 2013 by Jisung Catherine Kim Abstract The Intimacy of Distance: South Korean Cinema and the Conditions of Capitalist Individuation by Jisung Catherine Kim Doctor of Philosophy in Film and Media University of California, Berkeley Professor Kristen Whissel, Chair In The Intimacy of Distance, I reconceive the historical experience of capitalism’s globalization through the vantage point of South Korean cinema. According to world leaders’ discursive construction of South Korea, South Korea is a site of “progress” that proves the superiority of the free market capitalist system for “developing” the so-called “Third World.” Challenging this contention, my dissertation demonstrates how recent South Korean cinema made between 1998 and the first decade of the twenty-first century rearticulates South Korea as a site of economic disaster, ongoing historical trauma and what I call impassible “transmodernity” (compulsory capitalist restructuring alongside, and in conflict with, deep-seated tradition). Made during the first years after the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis, the films under consideration here visualize the various dystopian social and economic changes attendant upon epidemic capitalist restructuring: social alienation, familial fragmentation, and widening economic division.
    [Show full text]
  • Conservation Management Plan for the National Theatre Haworth Tompkins
    Conservation Management Plan For The National Theatre Final Draft December 2008 Haworth Tompkins Conservation Management Plan for the National Theatre Final Draft - December 2008 Haworth Tompkins Ltd 19-20 Great Sutton Street London EC1V 0DR Front Cover: Haworth Tompkins Ltd 2008 Theatre Square entrance, winter - HTL 2008 Foreword When, in December 2007, Time Out magazine celebrated the National Theatre as one of the seven wonders of London, a significant moment in the rising popularity of the building had occurred. Over the decades since its opening in 1976, Denys Lasdun’s building, listed Grade II* in 1994. has come to be seen as a London landmark, and a favourite of theatre-goers. The building has served the NT company well. The innovations of its founders and architect – the ampleness of the foyers, the idea that theatre doesn’t start or finish with the rise and fall of the curtain – have been triumphantly borne out. With its Southbank neighbours to the west of Waterloo Bridge, the NT was an early inhabitant of an area that, thirty years later, has become one of the world’s major cultural quarters. The river walk from the Eye to the Design Museum now teems with life - and, as they pass the National, we do our best to encourage them in. The Travelex £10 seasons and now Sunday opening bear out the theatre’s 1976 slogan, “The New National Theatre is Yours”. Greatly helped by the Arts Council, the NT has looked after the building, with a major refurbishment in the nineties, and a yearly spend of some £2million on fabric, infrastructure and equipment.
    [Show full text]
  • Media Content the Next Players of China’S Growth
    Media Content The next players of China’s growth A look into the growth pattern of China’s culture industry Overweight (Maintain) China has become a central player in almost every industry across the world. The media content industry is no exception. In our recent overseas marketing trip, we met many Industry Report foreign investors asking about Korean content stocks, and were left with the impression March 23, 2016 that investors were looking for the next players to benefit from China’s growth. In 2015, the tertiary industry contributed to more than half of China’s GDP for the first Daewoo Securities CCCo.,Co., Ltd. time ever, signaling a change in global stock leadership. China’s box-office market has been growing at an astonishing rate, outpacing forecasters’ predictions. Historically, US [Telecom Service / Media] cultural spending increased significantly when the country’s GDP per capita rose from Jee-hyun Moon US$4,000 to US$20,000. At present, China’s GDP per capita is just US$8,000. +822-768-3615 Furthermore, the Chinese government has pledged to develop the culture industry into [email protected] one of the backbones of its economy. Nu-ri Ha With infrastructure nearly complete, next big investment will be in content +822-768-4130 [email protected] China’s culture industry now has most of the necessary infrastructure in place. The boom in multiplex theater co nstruction has led to a considerable rise in the number of Hong-mei Cui screens, and box-office revenue is surging in third- and fourth-tier cities.
    [Show full text]