So What's Next?
Building a market and keeping it are two different things. It doesn't take a Wharton school grad to understand that if the demand for new animated programming slows, so does the industry that produces the shows. 1997 is a definite down tick from 1996, but as 1997 was such a record year, the comparison may be unfair. There is still a healthy number of shows being produced throughout Asia and certainly a good number of these are in South Korea. The question that every studio owner must ask is how long will the good times roll?

At the end of last year, a friend who is the head of production for a major studio went to Korea to look for a production house to place a new series that was to start this year. Her company is not known for having high budgets, but the new project was well-funded, so she thought she would interview a few high end studios, who she hadn't been able to use before. When she arrived in Seoul her appointments were rather brusquely canceled. She was told it would be a waste of time for her to go to the studios as she couldn't afford them. "I couldn't believe how arrogant they were," she told me. This year both studios would be honored to bid on her work.

I asked Nelson Shin about what he saw in the future for AKOM and the industry in general. His response was guarded but generally optimistic. Nelson feels that the industry is still in excellent shape but he does understand that not all years will be banner ones like 1996. Nelson is one of the founders. He has seen bad times before and knows that the industry can turn south rather quickly. However, he feels confident in his own ability to bring work into AKOM and keep his staff busy. He also feels that maintaining a high quality standard and a good reputation will help the strong studios survive through the off-years.

I also discussed the popularity of animation in Seoul with Tayk Kim. He pointed out that there were now five different animation festivals being held in Seoul this year alone. Mr. Kim, like Nelson Shin, is optimistic but also cautious. It seems that all of the producers I have talked with feel that they need to find a way to develop strong properties in which they can share long term revenues. This is not easy, as we all know. The Koreans seem to be exploring different avenues. Animation houses are trying to link up with post-production houses in order to offer Western producers a fuller package that can help shows with tight budgets. Korean layout and storyboard artists have set up small production units in Los Angeles which bid on shows as an entire package, again trying to present themselves as attractively as possible.

Korean television, KBS 1 and 2, MBC and SBS, cannot pay for quality original programming. Sometimes a Korean studio will take a Korean broadcast license on a Western show as part of their fee, however, the value is not as great as the discount they offer. The Korean market is simply too small for the broadcasters to cough up a substantial amount of dollars. These "co-production" deals are often no more than sales gimmicks offered to make the client feel that the studio has a vested interest in the show, and will favor it in production over the other shows simultaneously going through the studio. Most often this is not true and the discount or back end position that the studio takes is worth little or nothing to them in reality. The catch here is that the studio has promised to provide a production service at a certain level of quality and to accept a lesser payment than they would normally charge for that service. Seemingly, the studio takes an ownership position in the show in proportion to the difference in services provided and lesser payment received. The rub for the client is that the studio may elect to produce the show at the exact same level of quality as the payment they've received; not at the higher level promised.

Some producers like Nelson Shin are encouraging young artistic staff members to try to develop the next Aeon Flux property as Korean designer Peter Chung did. They know that until they can demand a slice of the pie that they bake for the Western producers, they will continue to deal with the peaks and valleys of subcontracting. Shin, who is President of Korea's ASIFA chapter, believes that there is a great deal of talent in Korea that is still untapped. He would like to see Koreans more involved in the creation of programs but he understands that the main foundation of his industry is in the subcontracting domain.