• Exhibitors

South Korean Cinema Operators Raided by Police Over ‘Inflated Figures’

Megabox, CGV and Lotte. (graphics: eat.stretch.explore)

Seoul Metropolitan Police conducted raids on the offices of Korea’s top multiplex cinema operators and film distributors, accusing them of falsely inflating audience numbers for Korean films. The companies targeted in the raids include cinema chains CJ CGV, Megabox, and Lotte Cinema, as well as distributors Showbox, Lotte Entertainment, and Kidari. The distributors and cinema operators transmit ticket sales and revenue data electronically to the Korean Film Council’s (KOFIC) Korean Box Office Information System (Kobis). KOFIC utilizes this data to calculate a 3% ticket tax for a film development fund. The Korean box office suffered significant losses due to COVID-19 restrictions, with cinema capacity and concession sales limited until April 2022. While box office revenues have partially recovered in 2023, they remain 40% lower than the figures achieved in the same period in 2019.

The police raids were conducted by the anti-corruption and public crime investigation team, with the aim of investigating the alleged obstruction of KOFIC’s business by manipulating audience numbers. The companies are accused of providing false data to Kobis, which is responsible for aggregating, analyzing, and publishing box office information. KOFIC uses this data not only to track box office performance but also to calculate a ticket tax that contributes to a film development fund. The cinema industry in Korea has suffered significant losses due to COVID-19 restrictions, leading to closures of some venues and conversions of theaters into other facilities like gyms and climbing walls.

To encourage audiences to return to theaters rather than opt for online viewing, KOFIC introduced ticket subsidy coupons in 2020. However, the box office recovery in 2023 remains slower compared to pre-pandemic levels. While there has been a 57% improvement in box office revenues in the first five months of 2023 compared to 2022, it still lags 40% behind the figures achieved between January and May 2019.

Source : Variety