The South Korean film industry—producing anywhere between fifty and two hundred feature-length films annually—has been historically one of the world's most active national cinemas. The annual ticket sales figure in 2002 was $105 million (US), $50 million of which were for admissions to domestic Korean films. Between 2003 and 2005 in South Korea, attendance at domestic Korean films exceeded attendance at Hollywood imports, a rarity in a movie-going culture dominated by multiplex theaters. The cinema in Korea has strong roots as a privileged cultural form that has attracted the interests of diverse talents, including novelists, performers, musicians, artists, and intellectuals.
As an economic, political, and military ally of the United States throughout the post–World War II period and during the Korean War (1950–1953), South Korea was exposed to American popular culture through the US military forces and American clubs. Despite import and screen quotas that held foreign films in check, American films could always rely on strong audience identification. Running up against the impressive Hollywood scale of production, Korean films were forced to compete at the box office through low-budget genres like comedies, melodramas, and horror films. Surprisingly, interest in these domestic popular films was quite strong during the postwar years. The only anomalous period was from the mid-1970s to the early 1990s, when the film industry—like other cultural sectors—was placed under vigilant censorship by the military government. A strong strand of auteur-driven films with historically sensitive themes emerged in the 1990s. Most art films are now funded by the Korean Film Commission, which was established by the liberal government of President Kim Dae-jung (1998–2002).
After decades of volatility, the distribution system stabilized in the early years of the twenty-first century. A local conglomerate, Samsung, is one of the largest investors in the Korean film industry. Its subsidiary company, CJ Entertainment, makes direct investment, produces films, distributes local and imported films, operates the CGV multiplex theater chain, and sells the distribution and broadcasting rights of its products on the foreign market. Another film company that has demonstrated impressive growth is Showbox, a financing and distribution firm of entertainment contents, that also operates the Megabox theater chain. These two companies share about 50 percent of the total box office revenue in Korea. Though the passage of a new Motion Picture Law in 1986 has allowed Hollywood companies to distribute their films directly in Korea, the business performances of American companies like Columbia, Twentieth Century Fox, and Warner Brothers in Korea lag far behind CJ Entertainment and Showbox.