"Rather Watch Netflix" Ticket Prices Raised Three Times... Audience Feels 'Burden'

Movie Ticket Prices Higher Than Netflix Monthly Subscription Fee
Total Operating Losses of Three Major Theater Chains Reach 1 Trillion Won
Alien+ Part 1 and Emergency Declaration Fail to Break Even

Domestic theaters have raised movie ticket prices three times over the past three years. The rate of increase is steep compared to the past.
[Image source=Yonhap News]

[Asia Economy Kim Gun-chan, Intern Reporter] The box office performance of Korean films released during this summer's peak season appears slower compared to previous years. There is a perspective that the rise in movie ticket prices is the underlying reason.

Domestic theaters have raised movie ticket prices three times over the past three years. CGV, the largest multiplex theater chain in Korea, increased the weekend ticket price for general 2D screenings from 12,000 won to 13,000 won in October 2020, an 8.3% hike. After another increase in April last year, CGV decided to raise prices again in April this year, bringing the ticket price to 15,000 won as of August. Other theater chains such as Lotte Cinema and Megabox also raised their ticket prices to 15,000 won in July, matching CGV.

The price hikes since 2020 have been steeper compared to the past. According to data from the Korean Film Council (KOFIC), before COVID-19, movie ticket prices increased by about 5-7%. The ticket price, which was 8,000 won in 2001, rose to 11,000 won in 2016, marking a 3,000 won increase. However, the ticket price that increased to 12,000 won in 2018 surged to 15,000 won within four years.

Moviegoers say they feel burdened by the rising ticket prices. Kim, an office worker who visited a theater with a friend to watch 'Hunt' on the 15th, spent about 40,000 won in total, including 30,000 won for tickets and 10,000 won on popcorn and cola. Kim said, "Because the ticket price is expensive, I hesitate a lot even when buying snacks like popcorn," adding, "It's no longer just a simple movie outing like before, so the expenses are surprisingly high."

A visitor is booking a ticket at a movie theater on the 13th of last month.
As of August, the movie ticket price (weekend rate for a regular 2D screening) reaches 15,000 won. The weekend ticket price for a regular 3D screening is 16,000 won.
[Image source=Yonhap News]

A university student A, who recently watched 'Hansan: Rising Dragon' and 'Hunt' consecutively, said, "I usually watch movies with telecom discounts," but added, "Even with discounts, the prices are high, so I naturally tend to reduce the number of times I watch movies."

There is also an analysis that the way people consume movies has fundamentally changed due to the rapid growth of OTT (Over The Top ? services providing movies, dramas, and various videos over the internet) over the past three years during the COVID-19 pandemic. Since movie ticket prices have surpassed Netflix's monthly subscription fee (Standard plan at 13,500 won), the incentive to go to theaters has diminished. Additionally, movies released in theaters are often made available on OTT platforms shortly after. For example, the still-running films 'Emergency Declaration' and 'Hansan' are scheduled to be released on Coupang Play starting the 29th.

As a result, domestic theater revenues have not significantly increased compared to pre-COVID-19 levels. According to KOFIC data, the cumulative audience in the first half of this year was 44.94 million, with total sales amounting to 225.6 billion won. This is only 48.7% of the 930.7 billion won recorded during the same period in 2019.

While some voices call for lowering ticket prices, the possibility is low given the severe operating losses faced by the theater industry. The combined operating losses of the three major domestic multiplex chains (CGV, Lotte Cinema, Megabox) over the past two years approach 1.0651 trillion won. Last year, CGV and Lotte Cinema posted operating losses of 163.4 billion won and 122.4 billion won, respectively. It is known that ticket sales account for more than half of CGV's revenue.

Hansan and Hunt, which are considered successful hits, have a slower box office pace compared to past summer peak season releases. Emergency Declaration only managed to surpass 2 million viewers, making it unlikely to reach the break-even point of 7 million.
[Image source=Yonhap News]

Under these circumstances, some Korean films have failed to succeed during the summer peak season. Since July, blockbuster films with budgets of hundreds of billions of won have been released at one-week intervals. The first to open, 'Alien+Human' Part 1, attracted only 1.5 million viewers, far short of the break-even point of 7.3 million. 'Emergency Declaration,' boasting a star-studded cast, also only surpassed 2 million viewers, making it unlikely to reach its break-even point of 7 million.

In the past, summer peak seasons saw films like 'A Taxi Driver' (2017, cumulative audience 12.18 million) and 'Along with the Gods: The Two Worlds' (2018, 12.27 million) achieve over 10 million viewers.

The government plans to apply income tax deduction benefits to movie ticket prices to reduce consumers' financial burden. The existing cultural expense income deduction system grants a 30% deduction up to 1 million won for expenses on book purchases, performance tickets, etc., for wage earners with an annual total salary of 70 million won or less. According to the Ministry of Strategy and Finance's tax reform plan announced on the 21st of last month, movie ticket prices have been added to the cultural expense deduction targets. This will apply to expenses incurred from July 1 next year onward.