[The Korean Film Crisis] US Recovers to 62%, Japan Nearly 100%... Why Have Korean Theaters Stalled at 46%?

A movie theater in Seoul. Photo by Yonhap News Agency

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Most major theaters around the world have recovered in the post-pandemic era. In Korea, however, the industry remains at rock bottom. In 2025, the total number of moviegoers was 106,088,808-just 46% of the 226,678,228 recorded in 2019, right before the pandemic. During the same period, the United States recovered to 62%, and most European countries surpassed 75%. Japan reached 74% in 2024 and nearly achieved full recovery last year. The pandemic was a global event, and Netflix is available in both Japan and France. Korea's failure to even reach half of its pre-pandemic audience is not merely a delayed recovery.

The absolute figures back this up. From 2013 to 2019, the number of moviegoers in Korea exceeded 200 million for seven consecutive years. However, last year's figure did not even reach the level of 2005, which was 123,307,001. The number of commercial film releases also plummeted, dropping nearly 70% from 100 titles in 2019 to fewer than 30 last year. The Korean theater industry is not in recovery-it is in collapse.

Film organizations such as the Korean Film Producers Association and the Korean Film Industry Workers Union point to the industry's structure as the root cause. Three companies-CGV, Lotte Cinema, and Megabox-control the majority of screens nationwide. These companies also have affiliated distributors and production firms. In the United States, the 1948 Paramount decision banned such vertical integration for over 70 years. Although the consent decree ended in 2020, this long history of separation fostered a robust ecosystem of independent distributors and theaters.

In contrast, Korea has permitted vertical integration and neglected its negative effects for nearly 20 years. When theaters also handle distribution, there is a built-in incentive to prioritize films from their own affiliates. Independent distributors struggle to secure screens, and small and medium-sized production companies face disadvantages in attracting investment.

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The most visible result is the 'seat allocation monopoly.' Screens are overwhelmingly devoted to top-grossing blockbusters. As this practice became the norm, multiplexes essentially turned into exclusive venues for big-budget films. For example, "Avatar: The Way of Water" and "Zootopia 2" together accounted for 85% of all theater seats during a three-week period starting December 17, 2025. Films pushed aside by these blockbusters were quickly withdrawn. As movies disappear from theaters more rapidly, audiences turn to IPTV or OTT platforms instead.

Vertical integration has also undermined the investment environment. Major distributors, which own theater chains as affiliates, leveraged their advantageous position to monopolize everything from fundraising to sourcing new projects. When the pandemic hit their finances, investment dried up. They even reached for funds from the Mother Fund, which was designed to support small and medium-sized production companies. The total production budget for Korean commercial films released last year is estimated to have plummeted by 40% compared to the previous year, reaching only 300 to 350 billion won.

The recently announced 2026 Mother Fund film account notice has not reversed this trend but rather solidified it. For the first time, it allows contributions from large corporate groups subject to cross-shareholding restrictions and permits investments in films released directly through OTT platforms without a theatrical run. In effect, funds meant to support small businesses are now helping large corporations, and government resources intended to promote Korean cinema are being used to benefit global OTT platforms. This structure has been institutionalized through policy.

The "Film Content Consumption Trend Study" published by the Korean Film Council in February 2026 reveals why consumers are avoiding theaters. The top reason was "the burden of ticket prices" (25.1%), followed by "lack of interesting films" (21.5%). While ticket prices have risen, the diversity of films has diminished. Both conditions have prompted audiences to turn away. Kim Seonghun (46), an office worker, said, "These days, it's harder to find a movie I want to see at the theater," adding, "Even in a cinema with six screens, there are often fewer than six movies playing."

France prevents a single film from monopolizing seats through screen concentration limits. The country legally mandates a staggered distribution system from theaters to free TV, ensuring a pathway for investment returns. In Japan, long-run screenings are maintained through self-regulation rather than legislation, and the culture regards concentrating screens on a single hit film as inappropriate-a norm established over decades.

A scene of a movie theater in Seoul. Photo by Yonhap News

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Japan also has vertical integration centered around Toho, Shochiku, and Kadokawa, encompassing production, distribution, and exhibition. However, the way it operates is fundamentally different from Korea. The industry has internalized over decades that maintaining the credibility of theaters as venues is more beneficial in the long run than maximizing short-term box office revenue. Moreover, the average price of a movie ticket in Japan is 2.2 to 2.5 times the cost of an average lunch. In Korea, it is only 1.3 to 1.5 times. While Japanese theaters can be profitable even with fewer viewers per screen, Korean theaters must fill seats to make a profit. The economic foundations of the two industries are fundamentally different.

Critics also point to the government's responsibility for allowing oligopoly and vertical integration to persist for nearly 20 years. Kim Byungin, president of the Korea Scenario Writers Association, remarked, "The methods of supporting the film industry have not changed in nearly 30 years since support began in 1997. The government needs to understand the rapidly changing industry and market environment."

Lee Eun, president of the Korean Film Producers Association, also emphasized, "The failure of the government and major corporations to find fundamental solutions has deepened the Korean film industry's crisis beyond what was experienced during the pandemic. Unless an environment is created where many films can coexist and compete fairly, there will be no way out of this quagmire."

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