Movie the­aters trans­form­ing them­selves for growth

The Korea Times - - FEATURE - (Yon­hap)

Chu Se­ung-yup and his three friends, all in their early 20s, looked triumphant when they suc­cess­fully fin­ished an es­cape room game at a CGV movie the­ater in Seoul, late Oc­to­ber. The game was what at­tracted them to the cin­ema.

The four friends came to Seoul on Oct. 21 from their home­town of Sun­cheon, 420 kilo­me­ters south of the cap­i­tal city, to visit places fre­quented by young peo­ple, such as pop­u­lar nightlife dis­trict Itae­won and prom­i­nent mu­sic and arts neigh­bor­hood Hong­dae. “We booked a movie at Yongsan CGV be­cause we can play real-life ad­ven­tures and vir­tual re­al­ity games there. Among other things, there are five es­cape rooms with dif­fer­ent themes to choose from. We es­caped a room in only 38 min­utes,” Chu, a 22-year-old salaried worker, told Yon­hap News Agency.

Es­cape rooms are a game where two or more play­ers must solve puz­zles and crack codes against the clock to break out of a vir­tual prison, dun­geon or other the­atri­cal set. The par­tic­i­pants have one hour, though they can leave the room at any time if nec­es­sary.

Kim Ji-hye and Jang So-ra, 24-year-old col­lege stu­dents, ar­rived at the same the­ater on Oct. 21. They chose to have a vir­tual raft­ing ex­pe­ri­ence in the cin­ema’s V Busters zone be­fore see­ing a movie.

“I love to watch movies at my place be­cause I am not in­ter­rupted by any­one. I am a sub­scriber of Net­flix (the world’s largest on­line video stream­ing com­pany) as it al­lows me to see as many movies as pos­si­ble on a monthly ba­sis,” Kim told Yon­hap.

But with friends, it’s in­ter­est­ing to do an es­cape room, play VR games, go bowl­ing, en­joy a karaoke room or comic book cafe in ad­di­tion to see­ing a film, said Kim, who stud­ies biotech­nol­ogy at Chung­buk Na­tional Univer­sity.

Th­ese 20-some­things rep­re­sent chang­ing times for movie the­aters, which used to be a top des­ti­na­tion for dates. CJ CGV, Me­gabox and Lotte Cin­ema, the coun­try’s three ma­jor cin­ema chain op­er­a­tors, are rein­vent­ing them­selves to gen­er­ate growth — or even just to sur­vive — amid tougher com­pe­ti­tion.

“In the past, peo­ple came to the­aters just to see a movie. But to­day, they have nice home the­ater sys­tems or have very easy ac­cess to mul­ti­ple channels such as Net­flix and In­ter­net pro­to­col tele­vi­sion. We have more com­peti­tors than be­fore,” said Cho Sung-jin, di­rec­tor of the strate­gic sup­port divi­sion at CJ CGV. That’s why the com­pany came up with a two-pronged ap­proach to lure cus­tomers to its “Cul­ture­plexes”: one is to pro­vide lux­ury ser­vices and the other is to of­fer a va­ri­ety of en­ter­tain­ment fa­cil­i­ties within the the­ater.

For ex­am­ple, CJ GGV has a cin­ema in Yongsan where cus­tomers can en­joy a film on a bed made by Tem­pur Sealy In­ter­na­tional, Inc. along with snacks and cof­fee. This bed-equipped cin­ema is the first of its kind around the world. CJ CGV strives to pro­vide a plat­form for its cus­tomers that goes be­yond just watch­ing a movie.

“For us, be­ing a Cul­ture­plex means be­ing a mod­ern play­ground where peo­ple can come to ex­pe­ri­ence all dif­fer­ent types of cul­ture — from film, mu­sic, per­for­mances, games, food, drinks and so on,” Cho said.

Smaller ri­vals Lotte Cin­ema and Me­gabox are mak­ing sim­i­lar ef­forts. They are now of­fer­ing premium ser­vices such as a beer bar in­side the cin­ema and a pri­vate cin­ema that can be rented out to a small groups for par­ties or other gath­er­ings.

“As we see a grow­ing num­ber of channels for movies, we are also plan­ning to add VR and other fa­cil­i­ties to the cin­ema in or­der to have cus­tomers stay long be­fore or af­ter their movie times,” a Lotte of­fi­cial said.

In re­cent years, lo­cal movie the­ater firms have wit­nessed their earn­ings slow­ing down or re­main­ing weak. This new trans­for­ma­tion drive is aimed at prop­ping up their bot­tom line in the long term.

South Korea is still a ma­jor movie mar­ket where peo­ple an­nu­ally watch an aver­age of 4.25 movies per per­son at the cin­ema, just af­ter Ice­land’s 4.3 movies. The per-capita movies seen by the aver­age Sin­ga­porean reached 3.9 per year, while the num­ber was 3.7 for Aus­tralia and 3.4 in the United States, the Korean Film Coun­cil said. It cited data from IHS Markit, a Lon­don-based mar­ket re­search firm.

But Korean movie­go­ers, par­tic­u­larly those in their 20s and 30s, in­creas­ingly want fun and thrills be­sides sim­ply gaz­ing at the sil­ver screen for two hours, and this will surely af­fect the­ater prof­its go­ing for­ward. Re­flect­ing such in­dus­try de­vel­op­ments, CJ CGV’s net losses deep­ened to 17 bil­lion won ($15 mil­lion) in the first half of the year from 9.9 bil­lion won a year ear­lier, as a strong won re­sulted in heavy for­eign-ex­change losses.

On the other hand, Me­gabox’s net in­come rose 29 per­cent to 8.48 bil­lion won from 6.55 bil­lion won dur­ing the same pe­riod. Lotte Cin­ema didn’t pro­vide its earn­ings fig­ures for the six-month pe­riod.

As of Fri­day, CJ CGV op­er­ates 486 the­aters, in­clud­ing 334 over­seas. Lotte Cin­ema has 172 the­aters, 53 of them in other coun­tries. Me­gabox runs 100 the­aters in South Korea only.

To se­cure a new growth driver, CJ CGV and Lotte Cin­ema said they are plan­ning to ex­pand their mul­ti­plex cin­e­mas in highly po­ten­tial emerg­ing mar­kets such as Viet­nam and China in com­ing years. Ac­cord­ing to Choi Jun-sung, an an­a­lyst at Sam­sung Se­cu­ri­ties Co., “sub­stan­tive changes” to the com­pa­nies’ ex­ist­ing movie-cen­tered busi­ness mod­els ap­pear to be in­evitable if they want to sur­vive.

Yon­hap

Th­ese file pho­tos show a cou­ple try­ing to com­plete the Mis­sion Race game at CGV In­cheon, west of Seoul. In the game, play­ers have to com­plete 14 mis­sions and pass through a 128-me­ter-long maze cov­ered with mir­rors.

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