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Iris and Chuno run into production disputes

With only a day before its airdate, the premiere of Iris was thrown into question as the drama’s production company, Taewon Entertainment, announced a dispute with its broadcaster, KBS. After a day of negotiations, the two sides did reconcile and come to an agreement, meaning that the Wednesday premiere of the high-profile action series will continue as planned. But not without some major issues built in, as we learned from the grievances aired by Taewon.

Things had ground to a stalemate in the last days leading to the broadcast date as the production company felt taken advantage of by its broadcaster and their “unreasonable demands.” The day before the premiere, they had gone so far as to announce that they were ready to cancel the drama’s broadcast. KBS had given them an extremely low production budget to work with, supplying a mere 3 billion won (approx $2.5 million) out of its overall 20 billion won budget ($16 million).

Furthermore, if KBS is only able to sell ads at a rate lower than its norm, they will cut down the promised budget by as much as 30 million won. If viewership ratings come in at under 15%, an additional 10 million won will be withheld. (Here is where we see the argument for why ratings are important; on the artistic front, they are not always an accurate indicator of quality, but on the business front, they are the main barometer for success.)

KBS countered that it is written into the production contract that the broadcast station has the right to adjust the drama’s airing depending on various factors, and also reserves the right to extend or curtail the drama.

Also, this drama doesn’t have a formal contract regarding broadcasting details (which is apparently not uncommon practice), which contributed to the last-minute disputes. KBS’s CP stated that they will be drawing up a formal broadcasting contract soon.

Meanwhile, another drama is facing troubles for a different reason: upcoming action sageuk series Chuno. (Forgive me in advance if I miss some of the finer points of stock trading.) Its production company, Chorokbaem (Green Snake) Media is facing issues over the right of management, which may endanger the drama’s upcoming broadcast.

Chorokbaem’s controlling capital is coming dangerously close to 50%, and if the matter is not settled by December, it may be in danger of being delisted as a publicly traded stock. In order to prevent this, the CEO and directors are working on a way to undertake capital reduction (which, if I understand correctly, would bring the number of stocks within the acceptable range, thereby rectifying the argument over management rights).

CEO Kil Kyung-jin explained, “This strife comes from a failure to solicit investments for Chuno, and if we face delisting, the worst-case scenario would be the endangerment of the production.”

Chorokbaem Media is responsible for a number of hit series, such as Jumong, All In, Unstoppable High Kick, and Iljimae. However, in recent times, many outside production companies are facing losses, which are exacerbated by unfair contracts with the broadcast stations (see Iris‘s case above). One of the biggest problems is that 100% of ad revenues from drama reruns and internet views goes to the broadcast company. Production companies must offset losses with product placement and overseas licensing, among other things, because as we know, production budgets keep rising but the revenues are not growing to match them.

Recently, SBS’s morning drama Green Coach [녹색마차] even shut down filming when its production company failed to pay its actors on time. A representative from the Citizen Network for Media Reset (i.e., reform) asserted that broadcast stations must change their behavior of wielding their power and exacerbating the problems already faced by these outside production companies.

One production company rep who requested anonymity said, “These production companies that make Hallyu dramas are mired in debt. They must bring in adequate profits in order to make good dramas and to revitalize Hallyu.”

Via Herald Biz, Yonhap

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yeah!

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re: IRIS: those were the contract terms that were leaked (most likely by Taewon) but if they've reached a compromise, it's unlikely Taewon would have settled for that at the last minute. Otherwise why go for such a high-risk strategy so close to the broadcast date. What's unsettling is not so much the contract terms but the fact that networks have so much leverage against the production companies, they can broadcast dramas without signing any contract, eg. one drama that was scheduled for a year was broadcast w/o a contract for 6 months.

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Gah! I hope Chuno survives that!

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This is maybe why the rating is important. This was like "ON-AIR" drama ^^

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in the end it's all bout the money. especially in this economical state (though turning better). one can only pray and hope for the best. it's tough for both sides really and in the end, it's all the supporting casts and crew that gets the heaviest brunt of it all.

hopefully both iris and chuno will be blasting hits. but seriously, if all dramas are hits, where will they learn? unfortunately, the asian culture (esp east asian) is so critical on failure. cases in point: Ja myung go, tamna and alien baseball team gets the cut when they may not be bad dramas but somehow bring in low ratings and therefore suffer for profit's sake.

that's y arts ppl always suffer. T.T

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all i know is chuno better it's full broadcast and on time or some people will be having my **** up their *** :)

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I think your math is faulty. Three billion won = $250,000 when 20 billion won = $16 million?

I think its suppose to be 3 billion won = $2.5 million.

Just for clarification sake.

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lee da hae sure is pale.

i do not know anything about stocks.

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it really is such a shame that the power between broadcasting companies and production companies are split so unevenly

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Wow, I learn something new. Thanks, JB!

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KBS's demands are reasonable. BBF, their most expensive weekday show this year so far, cost about 5-6 million and that show produced 25 episodes. Iris's budget is up to 3 times that. KBS hasn't had a run of blockbuster dramas to subsidize this kind of show, which is why I was BAFFLED why Taewoon didn't sell this drama to SBS. This is exactly the kind of show SBS likes to promote. Then again, if you look at the numbers, it also speaks to how much investment was coming from other countries for Iris, the Hallyu Uber-Project.

I'm not sure how Chuno is going to work. Actors will have to take big paycuts. Even then, unless the drama does 20-ish numbers, this is going to hurt for KBS too.

"They must bring in adequate profits in order to make good dramas and to revitalize Hallyu.”

I think the problem with Hallyu is that producers have completely lost faith in the rom-com.

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@sunshine, sorry for the bad math! I get the Korean numbers right but I always mess up the dollar conversions. Maybe I'll stop trying to convert everything, hehe.

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Wow! Learned alot today. Thanks.
Concerned about Chuno...thankful for IRIS.

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Ugh. I'm just getting over being sick, I really don't need this kind of dishearting news. *sigh* I'm should really stop getting all excited nor having expectations for Kdramas anymore. My heart can't take this. *cough cough sniff sniff*

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Nice (or is it bad?) to hear about the business side of kdrama production.

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@Sarah,

Lemme guess. You don't do your own taxes. ;)

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Hello JB.
You've got one very fine website here. very good and informative. but most of all i like your writing. thank you...

Looking at the problems facing the production company, i must admit that i, as an internet user, might be one of the contributing factor. yeah... i surely didn't watch it on tv. lots of reasons. at least if i watch it on tv, the productions will get some money from the broadcasting station which in turn get their money from advertisers. i watch it free online. the production company didn't get anything out of me. what is my contribution? just talking about it... it's not enough to put money into pockets of people who works hard for it. i must say that i'm ashamed...

i'll tell you why i didn't like to watch it on tv. first, the subtitles are atrocious. most times, even the the dramas was dubbed in other language. really hate that! it's been a few years already i did't watch tv. can't say i missed it. so i'm really grateful to all subbers who work hard for us to enjoy the drama. THANK YOU. i think they should get their pay also for the contribution of their time and efforts.

so it's time for the production company, broadcasting stations, subbers groups to come up with a formula/infrastructure to get some income from internet viewer. hey.. if we want good quality drama (good acting, story lines, directors, subbings, HD pictures), isn't it's okay to contribute some? then we'll be assured of good quality drama. there will be some for everyone. not only drama with mass appeal, that's (sometimes) so mind numbing. my suggestion is subscription or affordable donation. let's make it affordable to all people in the world. maybe can even have advertisers on the website to make it cheaper. e.g those multinational companies of the world.

dramabeans can provide the links to all the reputable website since this website is the most read about kdrama. i don't want to pay to pirates! i want the money i pay to go to the people who works their butt off!

i believe that, that's the way we can say THANK YOU for the good times we had for watching good drama or movies. We cannot expect free lunch every time, year in, year out. in the first place, are we willing to do works for free year in, year out ?for people who just sits in front of computers everyday and commenting/criticizing on other people who give everything they have to make the drama and movies great?

that's my 2 cents worth... rambling that is. have a good and productive day JB. :)

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Hi there
I am a big fan of Lee Beong Hyun,,http://www.viikii.net/channels/goto/ladycastle?angel=mint0017#
well here is the fan sub group, we like you to join,, this site really gooddddd to visit
come and see,, this is not for sell just fansub,,
Mint

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