Sharp Decline in Audiences Due to COVID-19 and the Rise of OTT Platforms
"Focusing on Technology Business Over Theaters"
CJ CGV has withdrawn from the North American theater business after 15 years, following the closure of its Los Angeles (LA) location. With audience numbers declining since the COVID-19 pandemic and the rise of OTT platforms pushing operations to their limit, the company has decided to shift its focus from theaters to its subsidiary 4DX's premium theater technology business.
Recently, CGV USA announced on its website, "After much consideration, we have made the difficult decision to permanently close the CGV LA location," and stated that the final day of operations was September 21 (local time).
CGV entered the North American market in 2010, opening the LA location in June of that year with three screens and 600 seats. The company expanded its business by opening the Buena Park location (eight screens, 1,187 seats) in 2017 and a large-scale San Francisco location (14 screens) in 2021.
However, as a result of the COVID-19 pandemic, audience numbers plummeted, leading to the closure of the San Francisco location in February 2023 and the Buena Park location in March of this year. With the closure of the LA location, CGV has now completely exited the North American theater market.
A CGV representative explained, "We have shifted our strategy to strengthen our premium theater technology business, such as ScreenX and 4DX, rather than expanding our theater operations," adding, "This is part of a process to realign our global business strategy."
In fact, CJ 4DX has been achieving strong results in the North American market. From January to June this year, box office revenue from 4DX and ScreenX theaters reached 55 million dollars (approximately 76.2 billion won), up 47% compared to the same period last year. In particular, 4DX generated 35 million dollars (48.5 billion won), an increase of 51%, marking an all-time high.
Globally, 4DX operates a total of 1,212 theaters, including 772 4DX screens and 439 ScreenX screens. A CGV representative stated, "We are accelerating our growth through partnerships with global theater chains such as AMC."
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