제 20 호 Unsuccessfulness of Discussion on Lowering Movie Tickets to 7,000 won Every Wednesday
Kicker: ENTERTAINMENT
Unsuccessfulness of Discussion on Lowering Movie Tickets to 7,000 won Every Wednesday
By Yun-Seo Jung, Reporter
Have you seen a movie in a movie theater in the past year? If you have, how many times have you visited the movie theater in a year to see a movie? And are you satisfied with the current movie ticket prices? According to movieprofessionals on the November 1st, "We are looking through expanding the benefits of 'Culture Day' on the last Wednesday of each month, centering on The Korea Cinema Industry Associationand the Korean Film Council.”This means that the three multiplex companies, Megabox, CGV, and Lotte Cinema, take account of extending their offer of half-price 2D movies from 5pm to 9pm on ‘Culture Day’ to every Wednesday.Unfortunately, this discussion ultimately fell through.According to the industry on the 10th, CGV, Megabox, and Lotte Cinema, which are members of The Korea Cinema Industry Association, had follow-up discussions on various ideas, such as lowering the movie ticket price to 7,000 won every Wednesday, but were unable to narrow the differences between stakeholders. However, starting with this discussion, the film industry decided to find several ways to revitalize the stagnant movie market by lowering the burden of movie tickets for audiences.It's a shame that this discussion has been canceled, as a lower movie ticket price was something that many people wanted.
Reasons for increase in movie ticket prices
So, why did movie theater prices increase? The biggest reasons for the increase of movie tickets are COVID-19 and OTT platforms. COVID-19 has reduced the number of people visiting movie theaters, and the rise of OTT platforms has further decreased the number of moviegoers. In fact, theater sales in the Korean film market in 2020 decreased by 73.3% compared to the previous year. Also, in 2021, Korea's theater revenue was 584.5 billion won, a 69.4% decrease from 1.91 trillion won in 2019, before COVID-19. And according to the graph of moviegoers by Lotte Members, the number of moviegoers in 2019 was about 8 million, but in 2020 and 2021, it dropped by almost one-third to about 3 million. Unlike the theater industry, which faced a major crisis due to an outstanding decrease in moviegoers, the OTT platforms were greatly welcomed by people at that time when most people stayed at home. As the OTT platform produces its own variety of original series such as movies and dramas, there was not any reason to go to the movie theater. In fact, according to statistics on the 'OTT service usage by generation' by the Korea Information Society Development Institute (KISDI) at the time, OTT usage rate rose sharply from 41.0% in 2019 and 72.2% in 2020 to 81.7% in 2021. This is interpreted as a result of the rapid increase in OTT use in conjunction with the spread of COVID-19.
In fact, many people have wanted ticket prices to be reduced for a long time, but there are also reasons why companies cannot hastily reduce theater ticket prices in a day.Ticket prices vary depending on individual contracts, but if a ticket generates 15,000 won in sales, the government takes a total of 13% (1,950 won), including 10% VAT and 3% film development fund.The remaining 87% is divided into half (6,450 won) between theaters and distributors.The distributor takes the distribution fee at a separate rate, and the remaining money is shared by the investment company and the production company when the movie exceeds the break-even point (BEP).If the distributor and the investment company are the same, the calculations are different.
A film industry official said, "This discussion has proven to some extent that theaters do not decide prices arbitrarily, so now production companies, investors, distributors, etc. can try various things for each movie being released." And he added, "I think we can start discussions on diversification, such as price system, discount policy, and promotion." It is very unfortunate that this discussion was finally canceled, but hopefully we'll see a more affordable way to watch movies, both for businesses and consumers, in the near future.
Sources :
Sun A Kim. (2022). Changes and Implications of the Korean Online Movie Market after COVID-19. journal of korea contents society, 22(12), 368-378, 10.5392/JKCA.2022.22.12.368
https://www.ajunews.com/view/20220430211639298
