Seoul Metropolitan Police on Tuesday raided the offices of Korea’s three leading multiplex cinema operators and three film distributors.
“The six entities are accused of obstructing the business of the Korean Film Council (KOFIC) by falsely counting the audience numbers for Korean films,” a spokesman for the police is reported to have told Korean media, according to the semi-official Yonhap news agency. The raids were conducted by the force’s anti-corruption and public crime investigation team.
Local media named the companies visited by the police on Tuesday as cinema chains CJ CGV, Megabox and Lotte Cinema, and distributors Showbox, Lotte Entertainment and Kidari.
Distributors and cinema operators electronically transmit ticket sales and revenue numbers to KOFIC’s Korean Box Office Information System (Kobis). Kobis aggregates, analyses and publishes the data online. KOFIC also uses the data to calculate a 3% ticket tax which feeds a “film development fund.”
Korea’s box office was badly hit by the national government’s anti-COVID measures which restricted cinema capacity and concession sales until the end of April 2022. The three exhibitors each posted multi-million-dollar losses in 2020 and 2021, with those at CJ CGV reaching $180 million in 2020. Losses were reduced in 2021 through cost-cutting measures and ticket price increases. But several venues may have closed permanently and some theaters have been converted for other use such as gyms and climbing walls.
To encourage spectators to return to theaters, rather than watch movies online, KOFIC introduced ticket subsidy coupons. In 2020 it said that it would offer 1.3 million coupons with a face value of KRW6,000 ($4.71) each.
Box office this year has staged a partial recovery. According to Kobis data, gross revenues in the first five months of 2023 stand at KRW463 billion ($363 million). That is a 57% improvement compared with 2022. But the figure lags 40% behind the KRW775 billion achieved between January and May 2019.