Multiplexes Facing New Release Drought, Willing to Cut Their Own Flesh

Providing Subsidies for Next Month's Movie Releases as an Incentive
A Signal to Break the Vicious Cycle... May Lead to Rate Adjustments

A movie theater in Seoul city is less crowded than usual on the 7th, one day before the government’s implementation of raising the social distancing level to 2.5 in the metropolitan area. Photo by Moon Honam munonam@

Multiplexes suffering from a drought of new releases are ultimately cutting their own profits to encourage screenings.

The Korea Exhibition Theater Association announced on the 18th that CGV, Lotte Cinema, and Megabox will provide additional support funds beyond the screening fees (the distributor's share of ticket sales) for movies released next month. The release support fund is 1,000 won per viewer for directly operated theaters and 500 won for consigned theaters. Regardless of whether the film is Korean or foreign, additional support funds will be settled and paid based on the number of viewers for up to two weeks after release.

This is an incentive to revitalize new releases. Recently, distributors have been postponing releases to avoid the impact of the COVID-19 pandemic. There are no medium to large-scale works to be screened in theaters, causing some to suspend operations. Over the past weekend (15th?17th), only 87,287 viewers visited theaters. Except for "Wonder Woman 1984" (15,450 viewers), no film attracted more than 10,000 viewers.

This support could be a signal to break the vicious cycle. It lowers the break-even point for released films and alleviates the burden of attracting audiences. The Korea Exhibition Theater Association stated, "We plan to provide support next month and decide on further actions after gathering industry opinions."

Some in the theater industry worry that this support might accelerate adjustments to the revenue-sharing ratio. Theaters and distributors have traditionally split ticket revenue at a ratio of 45:50 in the metropolitan area and 50:50 in other regions. However, with the rise of streaming platforms like Netflix, demands for adjusting the revenue-sharing ratio have increased as more platforms seek new releases.

Lee Chang-moo, chairman of the Korea Exhibition Theater Association, said, "This is a meaningful decision made by the three multiplex companies for the normalization of the Korean film market," adding, "Now is the time for the distribution industry to respond with releases." He emphasized, "All stakeholders must unite with one heart and mind to overcome the crisis and normalize the domestic film industry."

This content was produced with the assistance of AI translation services.