The Korea Herald


COVID-19 decimates theaters, Netflix takes over

By Lim Jang-won

Published : Jan. 1, 2021 - 16:01

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An empty movie theater in central Seoul. (Yonhap) An empty movie theater in central Seoul. (Yonhap)

Coming in at 226 million, the number of theatergoers in Korea in 2019 was a record high. Five movies surpassed 10 million ticket sales and the main concern was the monopolization of screens by CJ and Disney (mainly Marvel) movies. A PwC report predicted in 2019 that the number of theatergoers would increase at an average of 4% per annum for the global movie market until 2023.

That all changed with the onset of the COVID-19 pandemic, making 2020 a year that the movie industry would rather forget.

Sitting apart and wearing a mask in theaters became the norm while purchasing tickets and popcorn was done through automated kiosks. Late-night movies became a thing of the past as social distancing measures forced theaters in the capital area to close before 9 p.m. This led to a more than 70% drop in the number of part-time workers and 15% decrease in the number of regular workers employed by movie theaters.

The number of monthly theatergoers plummeted from 16.8 million in January to 7.3 million in February and continued to drop with the spread of the virus. The highest-selling movie in 2020 was “The Man Standing Next,” released in January, at just 4.75 million tickets sold. Had the film been released in 2019, that figure would have placed the film out of the running for a spot in the top 10. April marked the lowest number of theatergoers since such records began to be kept in 2004, with 962,572 tickets sold at the height of the first wave of COVID-19 infections.

The government issued film vouchers worth 6,000 won -- equivalent to about a 50% discount on regular-priced tickets -- to encourage people to go to the movies, but that was not enough to bring people back to theaters.

The size of the movie market is projected to be around 913 billion won ($837 million) for 2020, compared to 2.5 trillion won in 2019, according to a Korean Film Council report on Dec. 15. The state-run agency estimated that approximately 60 million tickets total will be sold in 2020, a 73.7% drop compared to the previous year.

As a result, the three major local movie multiplex chains -- CGV, Megabox and Lotte Cinema -- all raised the price of movie tickets, as ticket sales continued to decline. At the same time, the multiplexes closed down many theaters, with CGV announcing the closure of over 35 of its 119 theaters nationwide over a three-year period.

As movie releases were delayed due to the virus, the movies that were available in theaters changed drastically compared to previous years. The number of screenings for independent and arthouse movies rose from 415,699 to 514,814 and the number of re-releases totaled 250 compared to 95 the previous year. Also, the share of Korean films screened reached 69.6 percent.
Netflix (Netflix) Netflix (Netflix)

The pandemic also accelerated a transition to OTT platforms such as Netflix. OTT platforms were already expected to surpass cinemas in 2020, with PwC predicting that the global OTT market would surpass the theater market without knowing of the pandemic to come.

In 2017, Netflix created its first original content in Korea, the film “Okja” directed by Bong Joon-ho. Netflix invested 60 billion won in making the movie and decided to release it simultaneously on Netflix and in the theaters. Major local theater chains boycotted the movie, making it available only in small theaters. In October 2019, Megabox, decided to show its first Netflix original movie and continued to screen other Netflix originals.

“Time to Hunt,” which was originally set for theatrical release in February, was released on Netflix in April, creating much controversy and earning the displeasure of multiplex operators.

However, as the pandemic continued, “The Call,” “What Happened to Mr. Cha” and “Space Sweepers,” originally made for theatrical releases, decided to premiere on Netflix, and multiplex operators, despite being unhappy with the move, understood the issues that filmmakers face. The advantages of being able to show the movie in 190 countries worldwide and make a profit regardless of ticket sales were tempting for many in the film industry.

“With a blockbuster movie like ‘Space Sweeper’ going to Netflix, many moviemakers will recognize Netflix as a viable option,” said culture critic Ha Jae-geun. “COVID-19 has accelerated the transition process.”

Although PwC expects theaters to recover to pre-COVID-19 levels by 2024, it also predicts that the subscription video on demand (SVOD) market will be double that of theaters by 2024.

By Lim Jang-won (