[Special Interview] Mixed Movie Ticket Prices in Promotions... What Matters Most Is the Quality of Content (Part 1)

"Price of a Bowl of Gukbap... Not Excessive Compared to Inflation"
"Bigger Issue Is Watching the Same Movie at Different Prices"
"Considering 'Theatrical Movies'... OTT Wait for Non-Blockbusters"
"Screening System That Viewers Can Feel, Investment Matching the Price Needed"

Movie theaters are coming alive thanks to the 'Seoul Spring' craze that swept through last month. However, attendance has not yet returned to pre-COVID-19 levels. Last month, the number of viewers was 7,642,831, which is less than half of the 18,600,679 recorded during the same period in 2019. That year, there was not a single month with fewer than 10 million visitors, but this year there have been six such months. Both Korean films and movie theaters are struggling with severe deficits.

Voices calling for structural reform are pouring in. The fundamental causes they point to vary. Generally, viewers cite increased ticket prices, distributors and producers blame the lack of standards for per-ticket revenue, and theaters point to the ineffective holdback period (the time between a film's release in one distribution channel and its availability in the next). The differences in perspectives are significant, and emotional rifts deepen, causing ongoing friction.

Korean Film Discussion Photo by Yongjun Cho jun21@

Asia Economy held a discussion at CGV headquarters to bridge these gaps and encourage effective government support policies. Participants included Park Ki-yong, Chairman of the Korean Film Council; Kim Jin-sun, President of the Korea Film Theater Industry Association; Yoon Je-kyun, CEO of CJ ENM Studios; Won Dong-yeon, CEO of Realize Pictures; Choi Jeong-hwa, President of the Korean Film Producers Association; and Kang Min-ah, Director of the Video Content Industry Division at the Ministry of Culture, Sports and Tourism. Together, they examined the current state of Korean cinema and theaters and sought solutions to overcome the crisis. The first topic was, "Is it okay to keep raising movie ticket prices repeatedly?"

△Asia Economy: "Many viewers express considerable burden due to the three price increases during the COVID-19 period. Distributors and producers are also dissatisfied because the per-ticket revenue has barely increased. The actual cost paid by viewers remains almost the same, but the perception that prices are expensive has become widespread."

Korean Film Discussion Photo by Yongjun Cho jun21@

△Won Dong-yeon: "It is undeniable that price increases have caused consumer resistance. The days of watching movies weekly out of habit are over. Now, people carefully check comments and ratings beforehand. Suppose a couple goes on a date to watch a movie. Adding coffee, popcorn, and dinner, it costs about 100,000 won, which is comparable to an annual subscription fee for online streaming services (OTT). Producers feel somewhat unfair. When the 'Along with the Gods' series was released, ticket prices were just over 10,000 won. About 4,000 won went to distributors and producers. Now, with a 15,000 won ticket, they should receive about 6,000 won, but in reality, it's less than 5,000 won. The entire film industry is being unfairly criticized. Theaters have not significantly increased profits either. Rather, public perception has worsened. Leaving this as is will not solve the problem. We need to examine whether current ticket prices are justified and find measures."

Wondongyeon, CEO of Realize Pictures Photo by Yongjun Cho jun21@

△Yoon Je-kyun: "This is an unprecedented difficulty. I thought if we found a benchmark, we might have a suitable standard. So, I once sought advice from Hollywood insiders in the U.S. Interestingly, they regarded our situation as trivial. They have overcome greater crises like the Great Depression, World War II, and the popularization of TV and video. What stood out was their underlying belief that movies are an art form for the common people. They insisted that prices could never be the same as those for opera, classical music, or musicals. Instead, they lowered prices to approach audiences like friends. Although this went against the corporate goal of maximizing profits, they looked ahead ten years. There was a consensus that if the hearts of the common people were lost, the film industry would perish. I think this is the awareness we need now. In fact, movies have been a source of hope and comfort whenever common people faced hardship. If we fail to align ourselves, the industry itself could collapse. We must find solutions based on this understanding."

△Choi Jeong-hwa: "Can the large corporations leading the Korean film industry really have such awareness? Can they look ahead ten years? I think it's difficult in a structure that is desperate for immediate results. They can demand 15,000 won for a ticket. The price of sundae soup in Apgujeong-dong is 15,000 won. So, they think a movie ticket is about the price of a meal. The problem is the public perception that it is expensive. I thought this would ease after about six months, but it has lasted longer than expected. Now, it even feels like a standoff. Foreign missionaries once said that Korean fights have an aesthetic. They don't rush to fight to the death but create an atmosphere and find solutions without major clashes. Now, it is time for either side to listen to the other's opinion."

Yoon Je-kyun, CEO of CJ ENM Studios Photo by Jo Yong-jun jun21@

△Won Dong-yeon: "The comparison is wrong. The 15,000 won price for sundae soup in Apgujeong-dong is fixed. Movie ticket prices vary with promotions, sometimes 10,000 or 11,000 won. A viewer paying 15,000 won ends up being the sucker. You don't pay 12,000 won just because you talk nicely to the sundae soup owner. Nowadays, there are also dramatic discounts like 'one plus one.' But these don't apply to all viewers. Such broken trust is hard to restore. Rather than guarding against high prices, it easily instills self-blame like 'I was foolish.' Efforts are needed to avoid giving that impression. If prices will be lowered through promotions anyway, insisting on 15,000 won has little meaning."

△Choi Jeong-hwa: "I agree. Strictly speaking, it's not only theaters that run promotions. Distributors and producers sometimes lead them. They judge that this is necessary to attract more viewers. Perhaps this is a unique characteristic of the film industry. I think we need to gradually improve from now on. Both theaters and distributors/producers."

Choi Jeong-hwa, Representative of the Korean Film Producers Association Photo by Jo Yong-jun jun21@

△Kim Jin-sun: "As you said, movies are a representative cultural activity for the common people. Even now, when OTT is dominant, movies remain an option for leisure activities. I believe theaters have contributed significantly to their popularity. Above all, they have greatly improved poor viewing environments. We can proudly say they are the best anywhere in the world. Various technologies like 4DX (multi-sensory theaters) and ScreenX (theaters with screens expanded to three sides) have been developed to provide new experiences. Throughout this process, there has been almost no support from the government or related industries. The same was true during the pandemic-induced slump. So, can we really say the increased ticket prices are expensive? Compared to the average in OECD countries, Korea's prices are not high. Of course, the three consecutive increases during COVID-19 are controversial. But is 15,000 won an excessive price? If so, what would be an appropriate price? The clear point is that the current price does not cause rejection when compared to inflation levels. Public backlash is largely due to the rapid increases over a short period. The influence of content supporting theaters cannot be excluded either. Films that could not be released during the pandemic have started to flood the market this year. Dissatisfaction arising from films that do not fit the trend or lack quality is being projected onto the increased prices. Psychological factors clearly play a role in price resistance."

△Asia Economy: "Many distributors and producers say the calculation of per-ticket revenue is opaque. In fact, the successful 'Seoul Spring' does not even reach 10,000 won (as of the 4th). With discounts from credit cards, telecom companies, and various events, the baseline has collapsed. Some films have passed the break-even point (BEP) based on viewers but ended up losing money after settlements."

Kim Jin-sun, President of the Korea Film Theater Industry Association Photo by Jo Yong-jun jun21@

△Kim Jin-sun: "The industry has never altered the self-imposed revenue-sharing ratio. Theaters and distributors/producers split revenue equally. One side never takes more profit than the other. I hope there is no misunderstanding. Just as production costs have risen for distributors and producers, theaters have also faced increased burdens for facility maintenance and viewing environment improvements. The only solution was to raise ticket prices. The indiscriminate increase in promotions due to viewer resistance needs to be improved. Of course, theaters are creating opportunities to watch movies at lower prices and will continue to do so. In that context, I want to have various discussions with the industry when new content is released. If the Ministry of Culture, Sports and Tourism or the Korean Film Council provides a platform, we are ready for in-depth discussions."

△Yoon Je-kyun: "What is the recovery solution for the film industry that President Kim Jin-sun envisions?"

△Kim Jin-sun: "First, the holdback period must be respected again. The damage caused by its collapse is immeasurable. Everyone probably feels it. Nowadays, viewers generally prioritize whether a movie is worth watching in theaters. They wait to watch drama genres or lower-budget films on IPTV or OTT. 'Apgujeong (2022),' starring actor Ma Dong-seok, is a representative example. It attracted only 608,639 viewers in theaters but performed well on IPTV. It was popular on OTT for nine weeks. As long as there is a mindset that movies will be available for free on OTT after two months, people may not feel the need to watch non-blockbusters in theaters. In that sense, I want to discuss diversifying ticket prices by content. It seems difficult to access independent or art films at current prices. If distributors and theaters agree on appropriate price ranges in advance, new demand might emerge."

Park Ki-yong, Chairman of the Korea Film Council Photo by Jo Yong-jun jun21@

△Park Ki-yong: "The Korean Film Council is positioned to facilitate cooperation between the industry and the government. Since becoming chairman in January last year, I have consistently advocated the need for support. We strongly requested production promotion funds. As Director Yoon said, movies are an art form for the common people. However, government officials generally respond coldly. They question the justification for support, asking, 'Why should we help?' They understand the symbolic value of movies for common people. So, they ask, 'Why raise ticket prices and then ask for help?' I have heard many say that the industry must show efforts before receiving support. In fact, ticket prices are set autonomously by the industry, not dictated by the government. There could be misunderstandings about the three multiplex companies (CGV, Megabox, Lotte Cinema) colluding. Still, we must not give up on government support. Industry stakeholders, including theaters, must first demonstrate change and effort."

△Kang Min-ah: "Considering inflation and other factors, there are concerns about rising ticket prices. As Chairman Park said, when discussing budgets in the National Assembly or government, ticket prices often come up alongside self-help measures. Personally, I don't think current prices are expensive. But compared to OTT alternatives, there is room to feel that way. Attempts to reach consumer-friendly agreements seem necessary. As President Kim said, diversifying ticket prices and discount promotions could be effective. However, it might be better to slightly lower overall ticket prices and explore various methods."

△Asia Economy: "Recently, the Korea Film Theater Industry Association's plan to introduce a 7,000 won discount every Wednesday was scrapped due to opposition from many producers and distributors. They expressed regret that the plan was implemented without prior consent. There are also tendencies for conflicts to worsen due to lack of dialogue on various issues. Of course, it is difficult to respond to every matter individually. As Director Kang said, it might be better to lower ticket prices first and find ways to coexist."

Kang Mina, Director of Video Content Industry Division, Ministry of Culture, Sports and Tourism Photo by Jo Yongjun jun21@

△Yoon Je-kyun: "Ultimately, the question is how much is appropriate. When movies were first introduced, setting ticket prices was difficult. In the U.S., they used the cost of a meal as a standard. In Korea, the price of a bowl of soup was the benchmark. Although meal contents vary, I think the price common people consider reasonable nowadays is between 10,000 and 12,000 won."

△Won Dong-yeon: "Actually, if a movie is enjoyable, paying 50,000 won is not a waste. Conversely, if it is not, people would complain even if it were free, feeling their time was wasted. Ultimately, content quality is as important as ticket prices. Chungmuro has focused too much on old and convenient planning. They have been complacent, obsessing only over famous actors and directors. The industry must reflect and reconsider. I bring this up because of ticket prices. There seem to be many opinions within the industry that prices are not high, but then they must first earn public trust. For example, theaters must prove the investment effects in screening systems and facilities that viewers can feel justify the 15,000 won price. Distributors and producers must consistently deliver content that meets expectations. If this fluctuates, it will be hard to gain support."

△Park Ki-yong: "Setting different ticket prices for each screening room could be a solution. Policies that differentiate by age or time of day are also worth considering. Especially, if significant discounts are given to teenagers, who will be the future audience of theaters, it could positively impact the film industry. Theaters operate even without viewers. But will they leave them empty or try to attract more people? We are at a crossroads now."

To be continued in 'Ineffective Holdback, How to Counter OTT... (Part 2)'.