[Exclusive] Multiplex Closure Pushed... Representatives Gather to Appeal to Government

Multiplexes Suffer Over 80 Billion Won Deficit This Month Alone... Urgent Need for Financial Support Policies
Ministry of Culture and Multiplexes Held Countermeasure Meeting Yesterday... Eongjinwi Remains Indifferent

On the 22nd, when the government strongly urged 'social distancing' to overcome COVID-19, a movie theater in Yeongdeungpo-gu, Seoul was quiet. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Lee Jong-gil] Movie theaters have been left groggy due to the spread of the novel coronavirus infection (COVID-19). This is because visitors have stopped coming. The situation has reached the point where not only temporary closures but also permanent shutdowns are being considered.

According to the Korea Film Council's Integrated Computer Network for Movie Theater Tickets, the number of visitors to movie theaters this month is 1,656,671 (as of the 27th). This is only 13.2% of last year's figure for the same period (March 1?27), which was 12,551,538. The average daily number of viewers is just 61,358.

Major multiplexes such as CGV, Lotte Cinema, and Megabox are in a precarious state like a candle flickering in the wind. Each has been operating under emergency management systems, but even that is becoming difficult to maintain. They are struggling to pay labor costs, rent, and management fees this month. A deficit of over 80 billion won is expected this month alone. A multiplex official said, "If the COVID-19 situation continues for another five months, a deficit of about 500 billion won will occur," adding, "Government financial support policies are urgently needed."

* Theaters close doors, screens go dark

CGV will close thirty-five directly managed branches starting today (the 28th). This accounts for 30.2% of the total 116 directly managed branches. The locations closing temporarily include Daehak-ro, Myeongdong, Suyu, Cheongdam Cine City, Piccadilly 1958, Hagye (all in Seoul), Gimpo Pungmu, Uijeongbu Taeheung, Paju Munsan, Pyeongtaek Sosa, Yeonsu Station, Incheon Airport (all in Gyeonggi/Incheon), Daejeon Gao, Cheonan, Cheongju Yullyang, Hongseong (all in Daejeon/Chungcheong), Centum City, Asiad, Masan, Changwon, Ulsan Sincheon (all in Busan/Ulsan/Gyeongnam), Daegu, Daegu Suseong, Daegu Academy, Pohang (all in Daegu/Gyeongbuk), Gwangju Geumnam-ro, Gwangju Yongbong, Gwangju Hanam, Seojinju, Jeonju Gosa, Jeonju Hyoja, Mokpo, Suncheon (all in Gwangju/Jeolla), Wonju, and Jeju (all in Gangwon/Jeju). Among these, branches with poor performance or unstable management will proceed with closure procedures.

On the 22nd, when the government strongly urged for 'social distancing' to overcome COVID-19, a movie theater in Yeongdeungpo-gu, Seoul was quiet. Photo by Mun Ho-nam munonam@

Among the branches still operating normally, fifty-six have already applied screen cut off. This means some of their screens are not in use. CGV took down 174 screens on the 25th. Next month, the number of movie screenings will also be reduced. Except for Yongsan I'Park Mall, all branches will operate only three times a day. A company official said, "This will be applied gradually." In January alone, the daily number of screenings was more than seven times.

Lotte Cinema continues to keep six directly managed branches that have already closed temporarily shut. These are Gyeongsan, Daegu Plaza, Daegu Yulha, Dongseong-ro, Sangin, and Seongseo (all in Daegu/Gyeongbuk). Consigned theaters such as Gyeongju, Sangju, Premium Gumi Central, Premium Mangyeong, Premium Andong, Premium Chilgok (all in Daegu/Gyeongbuk), Gwangju Gwangsan, and Iksan Mohyeon (all in Gwangju/Jeolla) have not yet shown signs of resuming operations.

Screen cut off will be implemented at other branches starting next month. A company official said, "We will take down 30% of all screens." The number of daily movie screenings will be drastically reduced except for World Tower (6 times). Seven branches including Gimpo will operate 5 times, seven branches including Cheongnyangni will operate 4 times, and the rest will operate only 3 times a day.

Megabox will close ten out of forty-four directly managed branches next month. These include Kintex, Pyeongtaek (both in Gyeonggi), Ulsan, Masan (both in Busan/Ulsan/Gyeongnam), Daegu, Daegu Shinsegae, Gumi Gangdong, Nampo Ham, Mungyeong (all in Daegu/Gyeongbuk), and Daejeon Jungang-ro (in Daejeon). Nine consigned theaters such as Suwon Nammun and Misa Riverside (both in Gyeonggi), which have already closed temporarily, show no signs of reopening.

This company does not apply screen cut off. However, it changes the number of daily movie screenings by region. Directly managed theaters in Seoul and the metropolitan area operate 4 times a day, and other directly managed theaters operate 3 times. A company official said, "Consigned theaters are left to operate autonomously."

On the 22nd, when the government strongly urged 'social distancing' to overcome COVID-19, a movie theater in Yeongdeungpo-gu, Seoul was quiet. Photo by Mun Ho-nam munonam@

Megabox had planned to significantly increase the number of directly managed branches this year through aggressive investment. In fact, some theaters have already completed renovations. However, all openings have been postponed due to the prolonged COVID-19 situation. Lotte Cinema is no different. A company official said, "We have postponed the opening of new directly managed branches and strengthened the investment decision-making process." CGV has not only postponed new directly managed branch openings but also suspended renovation work. A company official said, "The situation is so severe that we have internally established tight operational guidelines."

Emergency cash securing, Korea Film Council indifferent

The reason multiplexes are rushing to tighten operations is that they lack sufficient cash. For example, multiplex A spends about 18.5 billion won per month on rent and management fees. Total movie theater sales this month amount to 13,678,646,770 won (as of the 27th). If distributors, producers, and investors take 55% (based on CGV and Lotte), about 6.1 billion won remains. The share going to A is 2 to 3 billion won. This amount is insufficient to cover rent, management fees, or even labor costs.

Multiplex official B said, "There is an emergency in securing cash." He added, "If the COVID-19 situation continues until this fall, the theater industry could face a chain bankruptcy." Multiplex official C said, "It is no exaggeration to say this is the biggest crisis in the film industry," adding, "Even if the COVID-19 situation calms down, it will take considerable time to return to normal."

Last year, annual theater sales accounted for 76% of the total film industry sales in South Korea. If movie theaters falter, the entire film industry could collapse. In fact, as theater sales plummeted, workers in screening, production, distribution, import, and marketing sectors have seen their incomes abruptly cut off. More companies are increasingly relying on bank loans to pay employee salaries. The situation is no different in commercial districts near theaters. Even if they want to solicit customers, there are no pedestrians to respond.

On the 15th, as a cluster infection of the novel coronavirus is occurring in the metropolitan area, a movie theater in Seoul shows a quiet scene. Photo by Jinhyung Kang aymsdream@

As the situation worsened, the Ministry of Culture, Sports and Tourism belatedly began to prepare countermeasures. On the afternoon of the 27th, at the third floor of the National Theater, they met with multiplex representatives to assess the damage caused by COVID-19. Financial support from government budgets and the Film Development Fund, as well as financial support policies, were discussed. There was also a request to include the film industry in the employment retention subsidy targets that apply to travel, tourism accommodation, tourism transportation, and performance businesses.

The Chinese government promised financial support to movie theaters damaged by theater closures. The French National Center for Cinema also postponed social burden payments for theaters and facilitated easier access to loans. Additionally, as an emergency measure, they advanced the delivery of support funds for art film theaters by three months. This contrasts with the Ministry of Culture, Sports and Tourism, which has only deferred the payment of Film Development Fund charges for about two months during the COVID-19 crisis.

The response of the Korea Film Council, which can be called the control tower of the film industry, is even more serious. They have only delivered 5,000 bottles of hand sanitizer to theaters nationwide. Some of these were supported by the Korea Screening Development Association. Although they belatedly set up a dedicated channel to support COVID-19 damage, it has only received criticism for being ineffective. Chairman Oh Seok-geun of the Korea Film Council did not meet with multiplex representatives on the 27th. Instead, he only listened to the difficulties of distributors and producers at the same location at 10 a.m. that day and then left.