[Reporter’s Notebook] Multiplexes Reject Low-Margin, High-Volume Sales While Flooding the Market with Free Tickets

36,200 Free Admission Tickets Issued for "Ungnami"
About 20% of Viewers Entered Theaters for Free
Significant Decline in Health, Hygiene, and Service Standards

Last month, the number of movie theater visitors was 6,421,297. This is about one-quarter of the figure in February 2019 (22,277,733). This month is no different. As of the 27th, the number stands at 6,919,061, far below the same period in 2019 (12,551,538).

The frequent mention of ticket prices is cited as the main cause of the sharp decline. The three major multiplex operators in Korea?CGV, Lotte Cinema, and Megabox?each raised ticket prices by 1,000 won three times during the COVID-19 pandemic. However, they failed to cover the targeted operating losses. The accessibility for viewers decreased, only reducing the deficit margin.

The multiplexes plan to maintain their policy. Kim Jin-seon, president of the Korea Film Council, stated, "We have a mission to produce high-quality films, and we should repay that with good theatrical content," adding, "We do not want to engage in low-margin, high-volume sales of cultural products."

Ironically, the current promoters of low-margin, high-volume sales are the multiplexes themselves. They propose free admission tickets to distributors and producers, making them bear half the cost. They persuade that the increased reservation rates become a catalyst for box office success.

The problem is that the proportion of these incentives continues to grow. For example, for the film "Ungnami," which was released on the 22nd, 36,200 free admission tickets were issued. Among the cumulative 184,816 viewers as of the 27th, about 20% entered the theaters for free.

The dominant view is that the free ticket issuance was possible because the distributor was CGV. A producer representative, Mr. A, pointed out, "It seems they expected viewers to at least buy popcorn at the theater," criticizing, "Rather than producing quality films, this behavior actually devalues them." He added, "If viewers who paid their own money, trusting the high reservation rates, are disappointed with the film, the theater's resurgence could be further delayed." The CGV Golden Egg index (viewer satisfaction) for "Ungnami" is 74%, the lowest among all films screened at CGV.

Multiplexes are well aware that the excessive issuance of free tickets is a short-sighted marketing strategy. However, they are preoccupied with putting out fires by applying various discount events to other films as well. The majority of beneficiaries are enthusiasts who are already highly interested in movies. This is far from sufficient to encourage the release of films from distributors and producers who have become very cautious. Due to a shortage of part-time workers, multiplexes have seen a significant decline in health and hygiene standards as well as service quality. Currently, the only way to regain the popular base from before the pandemic is through price competitiveness.