This article contains spoilers about both films. Proceed with caution.
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The first major difference is, of course, the title. The Korean title of A Tale of Two Sisters is Janghwa, Hongryeon, which can be translated literally as "Rose Flower and Red Lotus". The Korean title comes from the Joseon-era folk tale on which it is based, about two sisters put upon and eventually murdered by an evil stepmother. The English title brings the relationship between the two sisters to the forefront, whereas the Korean title is actually the names of the two girls from the folk story. For the Hollywood remake, the name was changed to The Uninvited, which takes the girls out of the picture all together and puts the emphasis clearly on the haunting/ghost aspect of the story. It also thoroughly confuses those familiar with Lee Soo-youn's 2003 Korean horror film, 4 Inyong Shiktak, which was released in North American as The Uninvited. Other than both dealing with ghosts and being uncommonly elegant and moving, Lee's film and Kim's have little in common.
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In The Uninvited, it is the younger sister, Anna (Emily Browning) who was institutionalized after a suicide attempt stemming from her having witnessed the death of her terminally ill mother in a (hilariously spectacular) fire. Upon returning home she immediately seeks out her older sister Alex (Arielle Kebbel), who is sassy, irresponsible and bikini clad for much of the film. It is also Alex who first raises suspicions about the role their father's new girlfriend, and incidentally, their mother's nurse, Rachel (Elizabeth Banks), played in their mother's death.
While a subtle difference, making the more "innocent" sister the protagonist plays directly into North American notions of purity and victim-hood. Were Anna to have been immediately confrontational with Rachel, one assumes that the audience would have felt less sympathetic towards her. This serves mostly to increase the shock of the final twist, which also greatly differs from the that in the original film. However, making Anna the "virgin" also better aligns her with the North American horror tradition of the "last girl".
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The mood an tone are also strikingly different between the two films. Whereas Tale is a baroque fairytale set in a dark and mysterious house, Uninvited is much more glib and sunny which ends up undermining much of the intended horror. Tale is as much a tragedy as it is a horror film and the prevailing feeling of deep sadness inherent in the way it was shot and scored, as well as the actors' performances, are what ultimately fuels the horror aspects. It functions largely as a mood piece with minimal dialogue, while Uninvited didactically spells everything out for the audience and includes such charming lines as, "[s]he's like a crack whore, only without the dignity."
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In Kim's film, the fact that Soo-mi has multiple delusions only serves to reinforce the horror imagery and the audience ultimately feels great sympathy towards her, especially at the end of the film. The Guard Brothers' take, on the other hand, feels much more like a case of bait and switch and the result is that the viewer feels manipulated and unmoved. Whereas Soo-mi is a girl struggling and ultimately unable to come to terms with tragedy, Anna is a cartoon psycho, straight out of central casting.
Whether the failings of The Uninvited are the result of studio interference, mediocre film making, or the Hollywood need to dumb everything down to the lowest common denominator is unclear. But the original premise and a capable and talent cast could have yielded something much more interesting. But then again, I guess it already did.