Even Blockbuster Movies Struggle to Make Profits... "Are You Still Paying Full Price for Movie Tickets?" [Heotdari Economy]

⑤Movie Ticket Price Raised 4 Times, Weekend Price 15,000 Won
High Online Booking Rate with Various Discounts Applied
Half of Audience Books Tickets Under 10,000 Won
Blockbuster 'Seoul-ui Bom' Average Ticket Price 9,718 Won

Editor's NoteMany people thought it was a smart economic activity to get something better, but it often turned out to be a misstep. When consumers are deceived by corporate marketing or blinded by momentary gains and make wrong decisions, they end up being the ones who suffer. We aim to examine economic activities where people have made 'missteps' by misjudging everyday situations and messing things up.

[Image source=Yonhap News]

“Movie ticket prices are so expensive that I’m afraid to go to the theater.”

Movie ticket prices averaged 9,500 won in 2018 but rose to 15,000 won by 2023, five years later. The three multiplex chains (CGV, Lotte Cinema, Megabox) raised ticket prices three times during the COVID-19 pandemic. Including the 2018 increase, ticket prices have gone up four times in five years. Watching an IMAX 3D movie on a giant screen costs 25,000 won.

Competition Among Telecom, Card Companies, and Theaters for Discounts

If you are paying full price to watch movies at theaters, it’s worth reconsidering. Many consumers already buy movie tickets at prices lower than the official rates. Tickets are cheaper during weekdays, early morning, and late-night showings, and telecom company partnership discounts are quite beneficial. You can also use card company discounts or theater-specific promotions like 'Movie Sadagu' to buy tickets without paying the full price. Choi Yeo-jin (22, female), a moviegoer met at a theater in Ichon-dong, Yongsan-gu, Seoul, said, “I mainly use movie promotional preview events held on weekdays. I rarely buy tickets on-site because there are no discounts, and I prefer to book online to get discounts.”

[Image source=Yonhap News]

An employee working at a ticket booth in a theater in Gangnam-gu, Seoul, said, “There are kiosks available, and many customers book online to get discounts, so on-site ticket purchases are almost nonexistent.” They added, “On-site, we mostly handle inquiries about cancellations and payments, as well as complaints related to parking tickets.”

Actual Ticket Prices Below 10,000 Won... Burden on Distributors and Producers

As various discount methods have increased, the rise in movie ticket prices has not kept pace with the average increase in actual ticket prices paid by viewers. Analysis shows that more than half of the audience, 54.5%, watched movies for less than 10,000 won. Looking at the distribution of movie ticket prices in 2022, the largest share, 11.1%, watched movies at around 6,000 won. Next were 10,000 to 11,000 won at 10.98%, and 9,000 to 10,000 won at 10.25%.

Even though movie ticket prices have risen significantly, the average amount actually paid per customer has not changed much. While weekend 2D movie ticket prices rose from an average of 10,000 won in 2018 to 15,000 won in 2023, the increase in average spending per customer was only about 2,400 won, roughly half of the ticket price increase. The average spending per customer for 'Spring in Seoul,' which surpassed 10 million viewers last year, was 9,718 won, less than 10,000 won. Considering that weekend movie ticket prices are 15,000 won, there is a difference of more than 5,000 won.

Theaters and investment distributors split the average spending per customer revenue roughly in half, and the investment distributors then share it with the production companies. Although there is audience backlash against the sharp rise in ticket prices, the average spending per customer does not increase accordingly due to discount tickets, causing distributors and producers to suffer from the dual challenges of price resistance and declining profits.

A representative from a film production company lamented, “Due to excessive discount competition and distribution of free tickets, the actual returns are not substantial,” and added, “We need to consider ways to increase the average spending per customer in the long term.” They also said, “Production costs such as actor fees and labor costs have increased, making it difficult to generate large profits by screening movies in theaters.”