Movie theaters that’stayed up’ to a 70% drop in audience… CGV abandoned Russian business

Input 2021.02.21 06:50

Due to the coronavirus infection (Corona 19), the number of audiences has plunged to 70%. Instead of a new movie, the singer’s performance videos and animations are put on, and business units with little potential for performance improvement are resolving boldly.

According to the distribution industry on the 21st, CJ CGV(079160)Will withdraw from the Russian market after 3 years of entry. Lotte Cinema announced that it would clean up 20 directly-managed stores, and closed four branches. In the case of Megabox, 50 directly managed halls and 6 out of 53 member companies are closed.

CGV has left two theaters operating in Moscow. It sells its shares to ADG Group, a Russian real estate developer that established a joint venture through joint investment. Initially, CGV announced its plans to enter Russia, saying that it will invest about 245 billion won over three years from 2018 and operate 33 theaters by 2020.

CGV, which was aggressively advancing overseas, took a step back because the situation in the domestic film market, which is’Cash Cow (a market where profits are constantly created)’, is difficult.

According to the Korea Film Promotion Committee, the cumulative number of audiences at domestic movie theaters from January to November last year was 58.08 million. It decreased by 71.6% from the same period in 2019. This is the record for the lowest audience since 2004, when the integrated computer network for movie theater tickets was operational. During the same period, the entrance fee sales of movie theaters also decreased by 71.2% to 495 billion won. This is the result of the inability to operate movie theaters normally due to restrictions on business after 9 PM, distance between seats, and ban on eating and drinking in the theater, according to the government’s social distancing measures.

CGV’s consolidated operating loss last year was 3925 billion won and net loss was 7453 billion won. CGV, which operates 119 directly-managed stores and 61 consignment stores, is currently closing eight directly-managed stores. Considering that Korea is also paying 10 billion won per month for rent, it is better to clear up overseas divisions with little growth potential.

A CGV official said, “It is to withdraw from the Russian business, which has a smaller business size compared to Vietnam and Turkey, which have become the number one movie theater in the region, and Indonesia, which is the second place.” Considering the recovery to the% level, we have expectations that the performance of major markets will improve once the corona crisis is over.”

Lotte Cinema, which announced that it would close 20 directly managed halls in November last year, closed the business of Hwanghak, Cheongju, and Geomdan Hall last year and Paju Outlet Hall in January this year. Executives are in a situation where they have returned wages and started retirement and unpaid leave, reducing labor costs as much as possible. Lotte Shopping (023530)Said that Lotte Culture Works, which runs Lotte Cinema, has converted its operating loss into my deficit.

Megabox too J Content Tree (036420)A subsidiary, Megabox Jungang (Megabox), announced that it turned to the red last year. Consolidated operating loss was KRW 68.2 billion and net loss was KRW 66.7 billion.

The three movie theaters are in an atmosphere in which the fan base discovers solid content and uses the screenings to prepare for after vaccination. Popular movies are re-released, live screenings of singer performances, games and sports events, and animations are being held on the screen. It is also because there is no incentive to gather audiences as major distributors postpone the release of new works.

CGV is directed by Christopher Nolan in a special theater that applied 4DX (a screening system that implements special effects such as movement, wind, and scents in addition to 3D reflecting three-dimensional effects) and Screen X (a screening system that uses both the left and right walls as a screen) technology. Movies like’Harry Potter’ and’Harry Potter’ are reruns with many fixed fans.

Lotte Cinema is also looking for a breakthrough through special exhibitions, opera screenings, and broadcasts of professional baseball games. Megabox posted game-related content, animation exhibitions, and live performances of singers on the screen. ‘Song Ga In The Drama’, which contains the live performances of singer Song Ga-in from’Mistrot’, was also released alone.

The three theater companies decided to implement a new movie release support program that pays 1,000 won per audience to the distributor in March. With the easing of quarantine measures, we are looking forward to the situation where the 9 p.m. business restrictions have been lifted.

A Lotte Cinema official said, “As the number of audiences has dropped sharply, we pay attention to discovering various contents that can replace movies, and movie theaters are in a difficult situation because good movies need to be caught in theaters to attract audiences, but they pay additional revenue to publishers to create new works. “I want to attract” he said.