As much as the Korean film industry is dependent on theatrical profits, for several years it has also anticipated making money back on films from sales abroad - literally sending everything it produces to be sold internationally.

But in the first half of 2007, Korean exports fell 57% year on year to $7.5m, according to Kofic. This was due mostly to the cooling of sales to Japan, which accounts for the bulk of exports.

"(Japanese) films are on the rise, so (Japanese buyers) are increasingly focusing on local investment and production." says Kini S Kim, vice-president of international sales (US and Europe) at CJ Entertainment.

However, he suggests marquee Korean directors maintain a following. "We saw good results for Lee Chang-dong's Secret Sunshine to territories like France, Japan and Hong Kong, and buyers are looking to buy up his next film as well. Park Chan-wook's I'm A Cyborg, But That's Okay also sold well. His next untitled project (aka The Bat) did pre-sales to France and Russia on the basis of the film's concept. That shows the buyers' confidence in a film and its maker."

James Velaise, head of Paris-based arthouse distributor Pretty Pictures, says international buyers can be overwhelmed by the number of Korean titles on offer. "The (international) market has been saturated with South Korean films, and audiences are simply confused.

"Too many South Korean sales companies are trying to sell everything coming out of the country. Not all local films should be sold internationally. Many distributors are finding that an average film that may previously have done well, is not strong enough for the current market."

Jane Giles, head of acquisitions at the UK's Tartan Films, says: "We understand the sellers have an obligation to their producers, and that they may have made certain projections. But prices were previously driven up by competition on certain key titles, and now they are leveling out. Sometimes you have to go through several markets until you get a realistic sales price, but the longer a film sits on the shelf, the less likely you will have fans left who want to see it."

Dividing Korean films into three tiers, Giles notes: "Star directors like Park Chan-wook and star films like The Host will always sell. Then there are the other films that do well at the Korean box office or the auteur films but are a hard sell to the UK or North American territories.

"And then you have the local genre movies that we're interested in. But we're seeing a declining interest in long-haired watery ghosts. Now Korean producers are doing variations on the North American slasher movies, and we've seen interesting films like Cinderella, Someone Behind You, Black House and Shadows In The Palace, that are breaking out of genre traditions," she says. "That's what the Korean industry needs to do - find new twists to the genres."