South Korean conglomerate Lotte is to separate its film division into a new entity from June this year. It also aims to expand into video.
The hotels to department stores group said that its Lotte Shopping unit would spin off its cinema management and film production and distribution operations with effect from June 1. The new company is to be called Lotte CultureWorks.
The move is intended to increase efficiency of the film businesses and allow them to further expand abroad. That may lead to an IPO, sources close to the company indicate.
Lotte Cinema is already the second largest multiplex operator in South Korea, with a roughly 30% share of all cinema tickets sold, and is the Korean sub-distributor for Hollywood’s Paramount Pictures. Overseas, Lotte has a string of 45 cineplexes in China and Vietnam.
Lotte has purchased land and properties in Indonesia and is widely expected to formally announce its plans to start building cinemas in the most populous and under-screened nations in South East Asia. Local media, recently reporting on the Indonesian president Joko Widodo’s plans to expand the country’s creative economy, said that Lotte is targeting 60 sites in Indonesia.
In its statement announcing the establishment of Lotte CultureWorks, Lotte said that it aims to open 140 cinema complexes in South East Asia by 2022. That would appear to include Vietnam and Indonesia, and the company noted that it is also looking at possible expansion into Myanmar.
In a related announcement, Lotte Cinema said that it plans to launch an Internet-based video streaming service in Korea from June. Details of the service were few, but it pointed to a transactional-VoD model.
“We plan to provide a variety of film content in partnership with various film companies, not just content from Lotte Entertainment,” the company said. The streaming market in Korea is dominated by mobile carriers SK Telecom (with its Oksusu platform), KT (Olleh TV Mobile) and LG Uplus as well as pay-TV services CJ Hello and KT Skylife.
Lotte is currently riding high on the theatrical success of fantasy thriller “Along With The Gods” which has earned $106 million since a late-December release. A sequel was already planned and will be released this summer.