As the Korean government unveils a new plan to rein in skyrocketing actors' fees, the initiative has been met with caution from industry officials who largely support its aim but remain uncertain whether it will prove effective in practice.

The Ministry of Culture, Sports and Tourism and the Korean Film Council recently signed a trilateral agreement with production companies and talent agencies to place a cap on actors’ pay.

Under the agreement, government-subsidized mid-budget films with net production costs between 2 billion won ($1.36 million) and 8 billion won will be encouraged to keep actors’ fees below 10 percent of those costs.

The measure is based on voluntary cooperation rather than binding rules, according to government officials. To prevent the initiative from becoming a one-off measure, the government also announced plans to form a consultative body to discuss ways to improve production conditions across the film industry.

The signing ceremony was attended by representatives from major talent agencies, including BH Entertainment, Management SOOP and J-Wide Company, along with officials from the Korean Film Producers Association and the Producers Guild of Korea.

The latest move is intended to address soaring fees for actors, which film industry officials have consistently identified as a major threat to the financial health of film productions. With a large share of limited production budgets allocated to actors who command hundreds of millions of won — or even billions, in the case of top stars — industry insiders have long argued that more of the money should be invested in the quality of films and working conditions on set.

But although the agreement addresses those concerns, it has been met with considerable wariness from within the industry.

Industry insiders say exorbitant fees are primarily a problem in big-budget commercial films costing more than 10 billion won and large-scale streaming series. The larger budgets of such projects have allowed actors to command higher fees, which have gradually become the industry standard and added to the financial burden of film production.

“The agreement itself is meaningful, but since the projects where the problem is most pronounced fall outside its scope, this measure alone is unlikely to bring about a significant change in the industry’s overall pay structure or rein in inflated production costs,” an official at a management agency said.

Even if the pay cap takes hold, mid-budget films will still face separate challenges in remaining competitive. Such films have smaller marketing budgets than major commercial productions and often rely on the drawing power of star actors.

There is also no guarantee that star actors will choose to participate in these films once the pay cap is introduced. Since actors’ fees are determined by market forces, they may simply shy away from projects offering substantially less than their usual rates.

Some industry insiders warn that if fewer bankable actors take part, mid-budget films could also lose their ability to attract investment and compete in marketing.

Adjusting actors’ fees alone, they argue, can do only so much to address the industry’s broader problems. It must be accompanied by efforts to stimulate investment, support distribution and reform the theatrical distribution structure to improve the overall health of the industry.

“The discussion should not focus solely on lowering actors’ fees. We also need to create conditions that naturally encourage talented actors to take part in mid-budget films,” an official at a film distribution company said. “Only then will this agreement become truly meaningful.”

This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.