The Korean movie “The King’s Warden” has blown past 12 million admissions making it only the 20th film to reach that level. It was reported that its break-even point was about 3 million admissions. It has been a surprisingly profitable film.
However, what happens to those profits? Director Jang Hang-jun said “I understand the producer is still deliberating on the performance-based compensation. It would be best to ask the production and investment companies for the precise contract terms.” Lim Eun-jeong, the film’s producer, mentioned that the incentive payment method is under review. She said, “While still abstract, we aim to proceed in a way that benefits Korean cinema. Regardless of the method, incentives will be paid.”
Chosun Ilbo reports the industry practice often sees directors receiving a “running guarantee” based on performance in addition to their base fee after a film crosses its break-even point. Considering the typical rate of 300–500 Korean won per viewer, Director Jang’s incentive is estimated to range between 2.8 billion and 4.7 billion Korean won. With his base fee, which is believed to be in the hundreds of millions of Korean won, his total earnings could reach billions of Korean won.
But apparently, director Jang has no written contract term that grants him guaranteed profit sharing. That is not unusual because most artists in South Korea have no bonus, profit sharing or residuals after the work is completed under the “up front” payment model where talent agrees to a one-time flat fee (and in most instances the actor pays for all his/her acting costs, for example hair, makeup styling, etc.). This long standing arrangement between studios/producers and talent has been a flashpoint on Netflix’s Korean dramas where actors are not paid residuals while US Netflix productions do (under union CBAs.)