Can distributors compete without theaters?
Looking at the recent blockbuster trend sweeping the Korean box office, it would be easy to conclude that vertical integration is the driving force behind it.
At least, that’s what some in South Korea think. And they are not happy.
“The Admiral: Roaring Currents,” the most successful film in the history of Korean cinema, was, after all, handled by CJ E&M, whose sister company is CGV, the largest multiplex chain in Korea. The other top summer blockbuster for 2014, “The Pirates,” is handled by Lotte Entertainment, which also has a chain of multiplexes.
Local media have accused conglomerate-run corporations of killing off smaller titles. (Lotte Entertainment refused to make its executives available to be interviewed on the issue, citing the negative atmosphere surrounding the debate.)
An exhibition professional who asked to remain anonymous is still bitter about vertical integration and this summer’s trend. “If we had multiplexes, our film would’ve continued on longer. There was no chance to get more people in by word of mouth. By the time word got around, it was off the screens.”
But Yoon In-ho, head of PR at CJ’s film division, is quick to stress that CJ and CGV are two entirely separate subsidiaries. “If vertical integration was key to blockbuster success, all CJ films should do well. But that’s not the case,” says Yoon.
In December 2013, New, a company founded in 2008 with no cinema chain, beat CJ in audience share scores, a fact often mentioned by CJ and CGV.
One company that doesn’t own theaters is refusing to complain: Showbox, which handled “Kundo: Age of the Rampant.” After that film took the top spot at the box office, it was quickly surpassed by “Roaring Currents.”
“You can’t blame your competitors’ circumstances for your performance,” says Kwon Keun-ha, head of PR at Showbox. “If your film is good, it’ll do well.”
Crtics of Korea’s biggest congloms complain they have monopoly power.
Total Number of Screens in Korea: 2616
CGV Screens: 942
Lotte Cinema Screens: 685