🎬 Lotte Cinema and Megabox to Merge – Why Now?

Two of Korea's biggest cinema chains, Lotte Cinema and Megabox, have announced a surprise merger. But behind this business deal lies a much deeper story about survival in a changing entertainment landscape. This post dives into the “why” behind the merger, and what it means for moviegoers and the industry as a whole.

🎞 A Personal Memory, A Sudden Shift

Growing up, going to the movies meant going to Megabox with friends. The scent of popcorn, the buzz of new posters, the dark excitement of the screening room—it was more than just entertainment.
And now, Megabox is merging with Lotte Cinema. Surprised? So was I.

📉 The Prolonged Slump in Multiplex Theaters

The COVID-19 pandemic devastated the global film industry.

In South Korea, annual theater attendance dropped from 220 million in 2019 to just 59 million in 2020, a staggering 73% plunge.
While there’s been some recovery, the numbers have not returned to pre-pandemic levels.

This left theater operators with high fixed costs and shrinking revenues—a dangerous imbalance for any large-scale business.

📺 The Rise of OTT and Changing Viewing Habits

Streaming platforms like Netflix, Disney+, and local services rapidly gained ground during the pandemic.
Audiences shifted from theaters to living rooms, and the change stuck.

As a result:

Only blockbuster films could fill seats.
Mid-budget and indie films struggled to break even at the box office.
Operators without strong content production arms—like Megabox and Lotte—were hit especially hard.

🏢 CGV's Market Dominance

CGV currently holds over 50% of the market, operating about 1,300 screens nationwide.
Megabox (approx. 500 screens) and Lotte Cinema (1,100 screens) found it increasingly hard to compete.

From screen count to content distribution to marketing, CGV had the upper hand.
Which led to a simple realization: "To compete with No.1, No.2 and No.3 must unite."

🎥 Vertical Integration and Content Strategy

Lotte Cinema and Megabox are backed by their respective content arms: Lotte Entertainment and Plus M Entertainment.
A merger brings these together, allowing for:

Full vertical integration from production → investment → distribution → screening.
Greater control over domestic content, and a better chance of competing with Hollywood blockbusters.

In a streaming-first world, this kind of synergy is no longer optional—it’s critical for survival.

🤝 Strategic Purpose Behind the Merger

The merger is not just about expansion—it’s about survival.

Declining ticket sales.
A shift toward digital viewing habits.
Increasing investment pressure.
And widening gaps with CGV in infrastructure and market power.

Lotte Cultureworks (86.37% owned by Lotte Shopping) and Megabox Central (95.98% owned by CJ’s Contentree JoongAng) signed an MOU in May 2025 to merge their theater operations and content arms.

📊 Market Shake-up and Future Landscape

Post-merger, the two companies will operate 1,682 screens, surpassing CGV’s 1,346.
This would make them the largest theater chain in Korea by screen count.

More importantly, their combined content distribution capabilities could give them a competitive edge in both domestic and overseas markets.

⚠️ Concerns and Challenges Ahead

Some worry that the merger could create a new kind of monopoly, limiting diversity in film choices.
There’s also the potential for branch closures or layoffs in overlapping regions.
The merger is still subject to Korea’s Fair Trade Commission approval, which could take months.

🎯 What This Means for Us

This merger may breathe new life into Korea’s movie industry, but it also raises important questions:
Will ticket prices rise?
Will programming become more standardized?
Can indie films still find a place on the big screen?

One thing is certain:
In an era where content is everywhere, the real challenge for theaters is to give us a reason to keep coming back.

Minconomy

이 블로그 검색