Korean Film Industry Faces Mixed Fortunes in Third Quarter, ‘Zombie Daughter’ Drives Rare Success
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The Korean film industry experienced a turbulent third quarter, marked by significant disparities in performance. While some major players struggled with declining profits amid a prolonged slump in domestic theater attendance, others, notably NEW, capitalized on box office hits like “Zombie Daughter” to achieve substantial gains.
CJ CGV Grapples with Domestic Slump
According to data released by the Financial Supervisory Service’s Electronic Disclosure System on Thursday, CJ CGV, heavily reliant on the Korean theater market, saw its operating profit plummet approximately 30% in the third quarter. The company reported consolidated sales of 583.1 billion won and an operating profit of 23.3 billion won. Although sales increased by 6.6% year-over-year, operating profit fell by 27.2%.
The challenges were particularly acute within Korea itself, where CJ CGV recorded 196.2 billion won in sales but suffered a 5.6 billion won operating loss. Despite government efforts to stimulate demand through movie consumption coupons, branch closures, voluntary retirements, and departmental mergers, the company was unable to avoid deficits.
Culture Works and Megabox Show Resilience
Culture Works, operator of Lotte Cinema, reported sales of 127.8 billion won and an operating profit of 8.2 billion won – a decrease of 2.1% and 8.4%, respectively, compared to the same period last year. However, analysts noted the results were relatively encouraging, considering the strong performance of the film “Pilot” in the same quarter last year and the company’s profitability in the first quarter of the year.
Megabox demonstrated strong performance across most sectors, excluding distribution and investment, generating sales of 78.4 billion won – a 4.3% year-over-year increase. Operating profit soared 219% to 1.9 billion won.
‘Zombie Daughter’ Propels NEW to Profitability
NEW emerged as a clear winner in the third quarter, largely due to the success of its distributed film, “Zombie Daughter,” released in July. The company’s third-quarter sales reached 54.5 billion won, a 10% increase year-over-year, with operating profit turning positive at 3.9 billion won. Remarkably, cumulative sales through the third quarter totaled 117.3 billion won, surpassing NEW’s entire annual sales for the previous year (113.2 billion won).
Showbox experienced a 256.1% increase in sales, reaching 17.3 billion won (4.7 billion won from movies and 12.6 billion won from planning and production), driven by the success of its planning and production division and copyright revenue from hits like “Lobby” and “Soju War.” However, the company continued to report an operating loss of 1.2 billion won, double that of the same period last year.
CJ ENM is showing signs of recovery, with third-quarter sales rising significantly to 372.9 billion won (a 48.2% year-over-year increase) and operating profit reaching 6.8 billion won. This positive trend is attributed to pre-sales of director Park Chan-wook’s film “There’s No Choice,” released in September, as well as growth in sectors beyond film, such as the expansion of its Fifth Season lineup.
Cautious Optimism for the Fourth Quarter
Industry sentiment regarding the fourth quarter remains divided. “Except for CJ ENM and NEW, all of them suffered net losses for the period,” one market official stated, predicting a continued slow recovery. However, another official expressed optimism, citing the potential of upcoming releases like “Wicked: For Good,” “Zootopia 2,” and “Avatar: Fire and Ash.” They added that businesses involved in more than just investment and distribution could anticipate a performance rebound.
The Korean film industry’s path to recovery remains uncertain, but the contrasting fortunes of the third quarter highlight the critical importance of successful content and diversified revenue streams.
