Hello, this is <Realworld EXP.>. After quite some time, we'd like to talk about movie theaters. We previously covered movies in issue 23, introducing playable movie marketing strategies to differentiate from OTT platforms. This time, we want to discuss the spatial transformation of movie theaters.
Before diving in, I've prepared some statistical data. According to the Korea Film Council's '2024 First Half Korean Film Industry Report,' movie theater revenue and audience numbers in the first half of 2024 were at 66% and 58% levels respectively compared to the first half of 2019, just before the COVID-19 pandemic. This is almost the same level as 2023, which had recovered from the pandemic's effects, suggesting that fewer people are visiting movie theaters due to the spread of OTT services and other factors. We'll need to watch whether this level will be maintained going forward.
How are movie theaters changing in this situation where movie-watching behavior is evolving? Looking at current trends, they seem to be moving in two directions: strengthening cinematic experiences or providing non-movie experiences.
Enhancing Cinematic Experiences
What makes watching a movie at a theater better than watching via OTT at home? You might think of massive screens, powerful sound systems, and motion chairs that move with the scenes. To provide reasons why movies should be watched in theaters, cinemas are strengthening their movie experiences, particularly by increasing the number of premium theaters.
Lotte Cinema opened 'GwangEum Cinema,' a sound-specialized theater, at their Suwon location in April this year. They say it vividly expresses the grandeur in movies through low-frequency woofer sounds, and looking at audience reviews, there are many positive feedbacks. Following Suwon, Lotte Cinema introduced it at their Hongik University location in May, expanding their GwangEum Cinema theaters.
Megabox also installed their first 4D theater 'MEGA | MX 4D' at the COEX branch in February, and CGV renovated all theaters at their Shinsegae Gyeonggi branch into premium theaters, opening in July. The reason movie theaters are increasing premium theaters seems to be that they can provide richer cinematic experiences compared to regular theaters, and ticket prices are also higher.
However, premium theaters have drawbacks too - they're affected by the supply of content needed for these special theaters. Looking at the aforementioned '2024 First Half Korean Film Industry Report,' revenue and audience numbers for special screenings (3D, 4D, IMAX, etc.) in the first half of 2024 were about half compared to the first half of 2023. This reflects situations like the postponement of anticipated foreign film releases due to last year's Hollywood strikes.
Providing Non-Movie Experiences
Beyond strengthening cinematic experiences, movie theaters are transforming in another direction. They're utilizing their spatial advantages to become places where people spend everyday time, not just places to watch movies.
CGV opened climbing gym 'Peakers' in 2022 and golf driving range 'The Approach' in 2023. Lotte Cinema introduced experiential exhibition space Random Square in 2023, and Megabox launched media art space platform 'Metaground Seongsu' in 2023.
Particularly, Lotte Cinema introduced immersive experience space 'Live Cinema' in June this year. 'Live Cinema' is described as a role-playing experience created together with 'scene stealers (actors)' who help participants successfully complete missions, which feels like an interactive escape room with lots of interaction.
Realworld members also experienced the first theme 'Friendship' of this 'Live Cinema.' According to our members' impressions, the opening direction was good, and they felt the effort to capture the concept of 'entering into a movie from within a movie theater.' This 'Friendship' costs 240,000 won per session, which might be somewhat burdensome for general customers who aren't escape room enthusiasts, but reservation rates seem quite high so far. At the time of writing this article, all weekend sessions in August were sold out.
Movie Theater = Meeting of 'Content' and 'Space'
There's a story often mentioned in marketing lectures: 'People don't want drills, they want holes.' This example applies to content as well. People don't want books, they want text; they don't want CDs, they want music. That's why content has shed its physical form and transformed into e-books, audiobooks, streaming services, etc. Movies wouldn't be any different. We need to understand the essence of the business.
The term 'movie theater' literally consists of 'movie' and 'theater' - content and space combined. The transformation of movie theaters we've examined today is also moving toward focusing on content or utilizing space. Whichever direction it takes, if they provide reasons to come to movie theaters and satisfying experiences, wouldn't people flock back to movie theaters? We'll wrap up this episode cheering for the new transformations of movie theaters. Thank you.