South Korean Cinema Adapts to Declining Ticket Sales with Space Efficiency and Diversification
The South Korean movie theater industry is undergoing a significant transformation, shifting away from a model reliant on expanding screen numbers and ticket sales. This change is driven by a post-pandemic recession and evolving entertainment consumption habits, according to a recent report.
Decline in Sales and Viewership
Annual sales for domestic movie theaters in 2025 are projected to reach approximately KRW 1.047 trillion, a 45% decrease from the KRW 1.914 trillion recorded in 2019. During the same period, the number of moviegoers has nearly halved, falling from 226 million to 106 million.1
Content Shortage and its Impact
A lack of compelling content is a major contributing factor to the industry’s struggles. The average return on investment for commercial films decreased by -31% in 2023, leading to a 66% reduction in the number of films released annually, from 1,740 in 2019 to 585 in 2025. This decline in releases has created a vicious cycle, discouraging investment and further reducing audience attendance. The rise of over-the-top (OTT) streaming services, alongside alternative entertainment options like musicals and sports events, has similarly accelerated the crisis.
Divergent Strategies of Major Multiplexes
The three major multiplex companies – CJ CGV, Lotte Cinema, and Megabox – have adopted distinct strategies to navigate the challenging market conditions.
CJ CGV
CJ CGV has faced difficulties due to fixed costs, reporting an operating loss of 5.6 billion won as of the third quarter of 2025. The company is currently undergoing intensive restructuring, including voluntary retirement programs.
Lotte Cinema
Lotte Cinema has taken a proactive approach by closing 10 branches and remodeling remaining locations to improve space efficiency. Despite an overall decrease in sales, Lotte Cinema achieved an operating profit of 8.2 billion won.
Megabox
Megabox has focused on a premium strategy, expanding special technology theaters like Dolby Cinema and strengthening exclusive content offerings to attract a higher-paying audience. This approach has resulted in increased sales and operating profit.
Strategies for Overcoming the Recession
The report highlights the importance of providing viewing experiences that cannot be replicated by OTT platforms. Key strategies include expanding special technology theaters such as 4DX, ScreenX, and Dolby Cinema, and diversifying revenue streams by repurposing theater space for alternative uses. These alternative uses include sports facilities, exhibition halls, and screening non-film content like sports broadcasts, concerts, and lectures.
Government Initiatives and Concerns
The government is considering the introduction of a subscription pass allowing viewers to watch four movies for 15,000 won per month. However, the report raises concerns about the complexity of profit distribution between theaters, distributors, and production companies, and questions whether the pass will be effective without improvements in content quality.
The Future of the Korean Cinema Industry
Choi Gyu-jeong, a senior researcher at R Square Research Center, stated that the era of quantitative expansion for the Korean theater industry is over. Future success will depend on “efficient reorganization of space” and “diversification of profit models,” focusing on how to effectively utilize theater space and attract audiences with innovative offerings.1