[비즈한국] As survival pressure mounts in the multiplex industry, concerns are rising that a 'race to close theaters' could escalate across the cinema sector. CGV announced the closure of three branches in January alone, and scenarios regarding large-scale consolidation following a potential merger between Lotte and Megabox are being discussed. With the entire film industry shaken by a content drought, theaters are being pushed to the brink, to the point where even the government is rushing to prepare countermeasures.
Possibility of Over 100 Closures in Merger Scenario
CJ CGV079160 is accelerating branch closures this year, continuing from last year. CGV announced the closure of three branches this month alone. Following the termination of operations at CGV Daegu Academy and CGV Siheung on January 23, it will close the CGV Daegu Suseong branch on the 31st.
CGV closed 12 branches last year. Regional branches such as Suncheon, Mokpo, Changwon, and Gwangju Terminal shut down in succession, and symbolic theaters like CGV Myeongdong Station Cine Library also ended operations. The number of CGV theaters has been in a downward trend since 2023. The number of CGV locations, which stood at 199 in 2023, fell to 196 in 2024 and further decreased to 184 by the third quarter of 2025.
The situation is similar for other multiplex chains. Megabox announced that it would temporarily suspend operations at its Daejeon branch starting February 1. It also shuttered five branches, including the Seongsu branch, last year. Lotte Cinema ended operations at its Anyang branch on January 11, having closed four branches last year. Lotte Cultureworks, which operates Lotte Cinema, implemented voluntary retirement for employees with over 10 years of service last month. A Lotte Cultureworks official stated, “The voluntary retirement process has been completed,” adding, “There are no additional restructuring plans for this year at the moment.”
However, the industry evaluates that it is difficult to break through the structural downturn solely through these individual corporate-level branch closures and workforce reductions. There is a growing call for fundamental reform and a realignment of the market scale for the entire cinema industry.
In this process, the most significant variable is the merger between Lotte Cinema and Megabox. Industry insiders are discussing a scenario where, if the merger goes through, the combined branch count could be reduced to approximately 131 locations from the current 130 or so for Lotte Cinema and 110 for Megabox. Some forecasts suggest that more than 100 locations—nearly half of the operating branches—could disappear.
The two companies signed a memorandum of understanding (MOU) to pursue a merger in May of last year, but discussions have been deadlocked for a long period due to issues such as stake allocation, financing, and the burden of antitrust reviews by the Korea Fair Trade Commission. However, with recent reports that the domestic private equity firm IMM Credit & Solution (IMM CS) is considering a 400 billion won investment in the merged entity, expectations are growing that the discussions may regain momentum.
Regarding this, an official from Lotte Holdings004990 stated, “While we are reviewing various options regarding investment, nothing has been finalized,” adding, “We have not yet held concrete discussions regarding branch consolidation or other matters following a merger.”
Even Affiliates Are ‘Bypassing Theaters’… Will the Holdback System Save the Cinema Industry?
The industry believes that the acceleration of theater closures is due to the intensifying shift of content toward OTT platforms. As major production and distribution companies prioritize releasing content on OTT platforms over theatrical releases, theaters are suffering from a chronic lack of content. This has led to a 'domino effect' of branch closures caused by an inability to withstand declining audience numbers.
This change is also evident in the strategies of major content production and distribution companies. In the past, when the film division of CJ ENM035760 planned a blockbuster, a theatrical release at affiliate CGV was virtually guaranteed, but recently, projects conceived from the planning stage with OTT releases in mind have become common.
'One Week Before I Die,' released in 2025, drew attention as the first series planned and produced directly by CJ ENM's film division, but it was released through Tving rather than on CGV screens. Since then, even blockbusters with budgets comparable to films, such as 'Study Group' and 'Dear X,' have been scheduled as Tving-exclusive lineups, leading to the assessment that theaters have moved away from the core of the group's content strategy.
Audience viewing habits have also changed. As the perception spreads that movies are released on OTT shortly after their theatrical run, consumer patterns are increasingly shifting toward waiting for the OTT release rather than visiting the theater.
With the acceleration of audience attrition, the National Assembly and the government have stepped in to respond. Political circles are discussing the introduction of a 'hold-back' system, which would mandate a grace period before a film released in theaters can be made available on OTT platforms. An amendment currently proposed in the National Assembly includes provisions to restrict release on other platforms for up to six months after the end of theatrical screenings.
In his New Year’s press conference held on January 21, President Lee Jae-myung mentioned the need for a holdback system, stating, “Overseas, content is only shown on OTT a year after theatrical release, but we have no such regulations. There is no reason for people to go to theaters. Why would they go to a theater when it will be on OTT in a little while?”
A CGV official said, “It is a positive sign that government interest in the cultural industry as a whole, including content, is rising and that discussions on institutional improvements like holdback are ongoing,” adding, “We expect theater visits to increase as the lineup of films for this year appears better than last year.”
Aside from discussions on institutional reform, theaters are also devising their own survival measures in the face of the ongoing content drought. CGV has chosen to upscale its theaters. CGV has recently begun a project to renew the Gold Class at Yongsan I-Park Mall into a ‘Tempur Cinema.’ This is interpreted as an attempt to strengthen the premium theater strategy by upgrading the existing premium seat-focused Gold Class. Tempur Cinema is a premium theater where visitors can watch movies while lying on reclining electric beds, with a ticket price of around 50,000 won per person.
On the other hand, Lotte Cinema has chosen a strategy of increasing audience numbers through price cuts. Lotte Cinema is currently holding events offering discounts of 1,000 to 3,000 won on movie tickets at 14 locations nationwide, including Gwanggyo, Bucheon, Pangyo, and Centum City. A Lotte Cultureworks official stated, “We are operating these as promotional events while considering the situation of each branch,” and added, “Whether to expand the ticket discount policy nationwide has not yet been decided.”