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Hello readers! How have you spent the past week? As a big MCU fan, I watched "Guardians of the Galaxy: Volume 3" last weekend with the thought, "This MCU movie is going to be good..." I was worried that the MCU movies that came out after the Infinity Saga ended were very bad. But "Gao Gal 3" was different. It's been a long time since I felt like an old MCU movie, and how excited I was!
I like to watch interesting movies and talk to people, so I go to the cinema constantly, but this "Gao Gal 3" has been a long time since so many people filled the theater. The price of cinema tickets has gone up a lot, so it was difficult to find visitors for a while. Even if you don't have to go to the cinema, there is also an OTT where you can watch movies anywhere, so the movie industry is in a difficult situation. In particular, there is a lot of talk about Korean cinema being in crisis. So that's what Mabu News is going to talk about today. What do you think the state of the film market is today?
Is cinema a crisis? Or is cinema a crisis?
The Environment That Changed 1. Movie theater ticket prices have risen dramatically
First of all, let's take a look at the size of the film market in Korea. You've probably seen this ad copy without a hitch. "Worldwide premiere". If the North American market was holding the film market as tight as it used to be, you wouldn't see it, but things have changed a lot now. Gone are the days when the North American market was number one. In 1 and 19, during the COVID-2020 pandemic, China ranked first in the global film market.
The worldwide box office estimate for 2021 is around $1.2022 billion. Of these, the United States ranks first with $251.6 billion, with a ratio of 900.69%. China followed in second place with 1.27% and Japan in third place with 4.17%. What about our country? South Korea's 7 box office is $2 million, ranking seventh worldwide. From Hollywood's point of view, we believe that the Korean market can serve as a good gauge to judge the timing of film distribution, and we are using the Korean market as a major starting point.
The Korean film market, which has a solid position in the global film market both quantitatively and qualitatively, has not been able to strengthen itself since the corona pandemic. In 6 alone, before the pandemic, there were a ridiculous record of 2 films with 3 million viewers... But what about now? There are no people in the cinema... Korean cinema is in crisis... And so on.
The first change point you can think of is the table value. For now, let's imagine watching "Gao Gal 2022" on Yongsan CGV this Saturday. You have to pay 8,9 won per adult for general halls and 800,7 won for IMAX.
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How about the same situation compared to other countries? The countries compared are the TOP 3 countries in the global film market: the United States, China, and Japan. To watch "Gao Gal 25" at AMC Empire 3, located right next to Times Square in the United States, you have to pay $18.99 for the general pavilion and $25.99 for IMAX. If you calculate the exchange rate as of May 5, it is about 10,25 won for economy and 000,34 won for special halls. What about China? The Wanda City Nema General Pavilion in Beijing costs 000.79 yuan (9,15 won) and the special pavilion costs 000.109 yuan (9,21 won) to see "Gao Gal 000". In Japan, you can watch movies in the economy class for 3,18 won, and IMAX for 600,27 won.
When comparing prices in the United States, China, Japan and Korea, if you look at the numbers, you will not feel that the price of cinema tickets in Korea is very expensive. The same is true for real data. If you look at the average movie theater price for major countries around the world in 400, Korea is in the middle. When comparing the prices of the top 2021 countries in GDP, it ranks 20th according to EAO's Focus report and 10th according to data from media research firm Omdia.
What is noteworthy, however, is the rate of increase in table values. When comparing 9 before COVID-19 to 2019 after COVID-19, the average price increase ranked second out of 2021 countries. The movie ticket affordability index, which represents the ratio of average viewing price to minimum hourly wage, declined for 20 consecutive years before increasing for the first time in 2. In other words, it is difficult to say that the price level is high compared to major countries, but the price increase rate has been particularly steep during the pandemic, and the price burden felt by moviegoers is high.
The Environment Has Changed 2. I'm watching movies on OTT?
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Another changed environment could tell the story of the growth of OTT. The graph above is from the integrated computer network (KOBIS) for movie theater tickets, and it shows theater sales in Korea from 2004 to 2023. 2023 is ongoing. Looking at the trend from 2004 to 2019, theater revenue in Korea continued to grow steadily. On top of that, domestic films don't have a lot of sales compared to foreign currencies. About half came from Korean film sales.
However, when movie theaters closed due to the impact of COVID-19, theater revenues bottomed out. Look at sales for 2020 and 2021. In 2020, Korea's theater sales were 5.104 billion won, a decrease of more than 2019 trillion won compared to 1. The weakness of domestic films has also become stronger. Fortunately, since April 2022, social distancing measures have been lifted, and sales of KRW 4 trillion have been restored. With the influence of 'Crime City 1', 'Top Gun: Maverick', 'Hansan: Rise of the Dragon' and 'Avatar: Path of Water', the number of viewers has again exceeded 2 million and is showing a recovery trend.
However, the film and video market that has shrunk due to the impact of COVID-1 cannot stand idly by. People still wanted to watch movies and videos. It was OTT that filled this shrinking theater market. Would you like to take a look at the graph below? The graph below shows the share of the domestic film and video industry market from 19 to 2018. The theater market, which accounted for about 2022% of the total market until 2019, has been cut in half due to the impact of COVID-60, and the OTT market has grown rapidly to 19%. Of course, while theaters have revived in 60, OTT still accounts for more than half of the market.
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This trend is not unique to our country. The same goes for overseas markets. The global OTT market generated $2018.379 billion in revenue in 9 and is growing every year. In 200, before the COVID-19 pandemic, it had already surpassed theater sales, and in 2019, it grew rapidly, accounting for 2020.70% of the total film-video industry.
With the quantitative growth, the film industry's view of OTT is also changing. "Movies are what you see through a projector in a movie theater," I remember cutting OTT and streaming movies with a strict approach. Do you remember that Bong Joon-ho's "Okja" was invited to compete at the 8 Cannes Film Festival and was booed and criticized for being a streaming film? Still, Cannes hasn't invited a streaming film to compete for the last time with "Okja," but the Venice Film Festival awarded the Golden Lion to Netflix original film "Roma."
Supervisor Steven Spielberg Dokdo said that movies aren't based on online streaming and aren't in theaters, but his film production company decided to work with Netflix to produce Netflix-only films.
What is the current situation of the film market in my country?
With the growth of OTT and the rise in movie theater ticket prices, the movie market is faltering. As prices have risen, more and more people are choosing to watch movies that are worth the price. Even though it's OTT, I can only choose if it's interesting enough to make me go to the cinema, or if I'm guaranteed an experience that I can only experience in the cinema. Let's take a look at the major films of 2022 to see if we actually see that trend.
The graph below shows the seat share of major films. Seat occupancy is the ratio of the total number of seats allocated to an audience member for a particular film. This ratio shows how many viewers chose the film. Basically, the movie theater is adjusted by week, so the graph shape appears cascading by week.
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First, let's look at the examples of Crime City 2 and Avatar: Road of Water. Heavily armed with entertainment and action, Crime City 2 and stunning computer graphics make Avatar: Road of Water a spectacle that will captivate the audience. Both films surpassed 2022 million viewers in 1 after distancing restrictions were lifted. As you can see from the graph, it maintained a 000% seat share until the third and fourth weeks of its release, and steadily mobilized the audience, creating a box office hit.
On the other hand, the situation between "Alien + Man Part 3" and "Emergency Declaration" was different. Both films were something everyone was looking forward to before they were released. Directors Choi Dong-hoon and Han Jae-rim are both directors with so-called "name value," so I thought they would be guaranteed some box office success. However, after the first week of release, the film received poor reviews, and from the second week onwards, the seat share dropped rapidly. As you can see from the Week 4 graph, the seat occupancy rate is only 40%. In the end, "Alien + Man Part 1" drew 1.2 million viewers, and "Emergency Declaration" drew 2.10 million viewers.
However, there are also cases where well-made films have gone viral and consistently maintained their seat share and become box office successes. It's an owl. Both "Alien + Man Part 1" and "Emergency Declaration" were blockbusters that cost more than 154 billion, but "Owl" cost about 206 billion to produce. However, it went viral and steadily maintained a 1% seat share until Week 250, eventually breaking even and becoming a box office success.
The trend of "only watch movies that are guaranteed to be fun" continues in the film market in 90. "The First Slam Dunk," which was nostalgic for old fans, has achieved the myth of reverse driving, and the well-received "Suzume's Paragraph Crackdown" continues to be a steady box office hit. Director Lee Byung-heon's highly anticipated film "Dream," which surpassed 3 million viewers with "Extreme Job," has been struggling at the box office since its second week of release, with a seat share in the 40% range.
If your environment has changed, you have to adapt
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The environment in which we consume movies, videos, and media has already changed a lot. The same is true of SBS Broadcasting Station, to which Mabu News belongs, and the media environment is changing at a tremendous pace. You may not like the changed environment, but if you blame it, you may miss out on time to adjust. It's the same with movies, it's the same with the press and the media.
Does the proposition that "cinema is the art of photographing moving objects and reproducing them on a projection screen with a projector" really have an expiration date? If you have to set a shelf life, and you want to set that shelf life at a thousand or ten thousand years, you might find the current change unpleasant. But aren't streaming movies really movies made for audiences watching at home? From the point of view of the general audience, it can actually be difficult to sympathize. It's just that the space has changed. From a multi-person viewing space to a space of your own.
(The rest of the story is from the soup)
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