A film screening held in 1899 at the Kyŏngbok Palace in Seoul, when American cinematographer Burton Holmes visited King Kojong, is widely accepted as the first instance of film exhibition in Korea. Though these early film exhibitions were limited to court circles, they soon aroused general curiosity and became widespread mass-entertainment events. Newspapers, as early as 1903, began to aggressively advertise motion picture screenings, sponsored by Western cigarette companies. These public screenings generated so much excitement that the Seoul Electric Company converted its garage in Dongdaemun into a formal movie theater within months of the initial screenings. Though these exhibition records in Korea are relatively well documented, complications cloud the exact exhibition date of the first Korean film. Japanese colonialism, which began in Korea in 1910, contributed to the loss of records of early Korean films (including the disappearance of all Korean narrative films made before 1943). Many films made in Korea during the colonial period, which lasted thirty-five years, were financed, supervised, and distributed by Japanese entrepreneurs and personnel. Strict film censorship, enacted in 1926, also required every film to obtain approval from the Japanese authorities before it could be screened in Korea. With one notable exception (Tansŏngsa, which still remains in business), all of the successful theaters in Seoul were also owned by the Japanese during the first half of the twentieth century.

Throughout the 1910s and 1920s, efforts were made by Korean businessmen and artists to establish independent film production companies that would free them from Japanese financial and technical dependence. Most of their films struggled to compete against foreign films, but their resilience eventually paved the path for a renaissance of Korean filmmaking. The first filmmaker to achieve true national recognition was Na Woon-gyu (1902–1937), whose film Arirang sparked an intense nationalistic film movement. Released in 1926, Arirang —written and directed by (and starring) Na Un-gyu—was perhaps the most popular film screened in Korea during the colonial period. A simple story that pits a Korean student against a villainous local bureaucrat who collaborates with the colonial government, the film found loopholes in Japanese censorship. Though he was not a particularly attractive man, Na's persona as an enraged common man tapped into the fury and frustration of colonial Korea. He was not only Korea's first legitimate "pop" icon, he was also the first modern celebrity who was not of yangban (aristocratic) origin.

By the time sound technology had arrived in Korea during the mid-1930s, Korean cinema had already suffered a precipitous fall. Once the war escalated in China during the 1930s, Japan abandoned any policies that had allowed expression of Korea's indigenous culture. Less than a handful of films were produced per year during this decade. Na Woon-gyu died in 1937, while only in his thirties; two years later, the Japanese authorities banned the Korean language and Korean names from official use. Though audiences cheered upon hearing dialogue in their native language in the first Korean "talkie," Chunhyang (1935, a film based on a popular folktale), the eventual prohibition of the Korean language virtually robbed Koreans of the opportunity to establish their own national identity during the early sound era. Ironically, this delay of the arrival of sound enabled Korean pyŏnsa s ( benshi , live commentators of silent films) to find work even as late as the postwar years. Meanwhile, the Japanese-run Manchurian Film Company, Man-Ei, active during the war years, provided a fertile training ground for many Korean filmmakers who would later become the most important producer-directors of the Korean cinema's Golden Age.

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