[Cinema in Crisis②] Growing IMAX and Superplex... Screen Quota Holding Back Progress

Competing with Large Screens and Vivid Sound: Upgrading Special Theaters
Mandatory 73-Day Screen Quota for Korean Films Loses Effectiveness
Laser Projector Theaters Standardized Despite Adverse Conditions

The three multiplex chains (CGV, Lotte Cinema, Megabox) have all emphasized their unique features as competition with online video streaming services (OTT) intensifies. They offer large screens and vivid sound that cannot be experienced on TV, computers, or mobile devices. They are competing to launch special theaters that maximize these features.

CGV operates IMAX theaters at about twenty locations including Yongsan I'Park Mall, Gwanggyo, and Incheon. These theaters provide immersive viewing with clear image quality and optimal sound. In addition, CGV runs 4DX (multi-sensory experience theaters) at forty-one locations, ScreenX (theaters with screens expanded to three sides) at thirty-seven locations, and 4DX Screen (theaters combining 4DX and ScreenX) at eight locations.

Lotte Cinema operates Superplex theaters at twelve locations including World Tower, Suwon, and Eunpyeong. These theaters feature screens about three times larger than regular ones, combined with 3D surround sound. They also have Super S (LED screen theaters) at four locations, Super 4D (multi-sensory experience theaters) at nine locations, and Colorium (the world's largest LED screen theater) in Suwon.

Megabox is also making a strong push. They have established Dolby Cinema, which integrates Dolby's latest screen, sound, and seating technologies, at six locations including COEX, Suwon AK Plaza, and Namyangju Hyundai Outlet Space One. MX theaters equipped with Dolby's 3D sound system and Meyer speakers are installed at nine locations.

The share of special theaters is expected to continue growing. Hur Min-hoe, CEO of CGV, stated at the '2023 CGV Film Industry Media Forum' held on the 30th of last month, "As audience standards for movie selection become stricter, we plan to expand special theaters as they provide the optimal experience." In fact, CGV recently renovated the Jukjeon branch and introduced the Shinsegae Gyeonggi branch, where all theaters are special theaters. They judged that demand for differentiated experiences could increase further.

The impact on sales growth is significant. Last year, total sales from special screenings reached 126.4 billion KRW, a 271.2% increase from the previous year. The number of viewers was about 8.65 million, up 252.2%. The increased interest is also reflected in the share of total sales. From 2018 to 2021, it was around 5%, but last year it more than doubled to 10.9%.

However, the risk is high, so expansion cannot be reckless. Above all, high facility investment costs reduce price competitiveness. For example, IMAX tickets cost 19,000 KRW on weekdays and 20,000 KRW on weekends. The IMAX at Yongsan I'Park Mall is even 2,000 KRW more expensive. Viewer satisfaction is relatively high. There is a growing consumer tendency to pay more for the best viewing environment. Blockbusters filmed with top-tier cameras or with many special effects often sell out before release.

A representative example is Christopher Nolan's 'Oppenheimer,' released on the 15th of last month. CGV explained, "During the first week after release, seat occupancy was 26% for regular theaters and 52% for IMAX. Especially, the IMAX at Yongsan I'Park Mall recorded 84% occupancy and ranked first in global IMAX sales during the first weekend from the 18th to 20th of last month."

On the other hand, if special features are not effective, popularity fades. For example, the motion chairs in 4DX theaters are not very comfortable. The backrests are nearly vertical and do not recline, making it uncomfortable to watch regular movies. The seats are connected in groups of four, so if one viewer moves, the other three are affected.

Multiplexes are required to screen Korean films for at least 73 days, reluctantly, due to the screen quota system. Article 19 of the Act on the Promotion of Films and Video states, "The operator of a movie theater must screen Korean films for at least one-fifth of the annual screening days from January 1 to December 31 each year." The screen quota system has long lost its effectiveness. The environment of movie theaters in 2006, when the current screen quota system was implemented, is completely different from today. Seventeen years ago, there were only 321 theaters nationwide (1,880 screens).

Multiplex officials unanimously say, "Since audience satisfaction and the future of movie theaters depend on investment in special theaters, exceptions should be applied." They argue that flexible operation to increase profits will enable further investment in technology and facilities. This is closely related to improving the environment of regular theaters as well.

The three multiplex chains have been replacing lamp projectors with laser projectors since 2015. Seo Ji-myeong, head of CGV's communication team, said, "Including about 200 units purchased from 2020 to last month, we operate about 300 units and plan to add fifty more within the year to raise the share of laser projectors to 40% of all screens." Lee Soo-jung, head of Lotte Cultureworks' communication team, also said, "We will replace thirty more units within the year and renovate existing special theaters, such as the World Tower Superplex which reduced seats to increase comfort, to create a premium viewing environment."