Will Expanding Premium Theaters Save the Cinema Industry? A Data-Driven Analysis

A few days ago, I opened the IMAX booking page for ‘Odyssey’ and was shocked. Even on a weekday, the prime seats were already sold out. Yet, standard screens at the same time were less than half full. It was striking to see such a temperature difference within the same theater. It made me wonder: if premium screens are selling so well, why does the industry keep saying that cinemas as a whole are struggling? Upon checking, I found the numbers to be even more extreme than I thought.

Why Premium Screen Revenue Outpaces Audience Share

Let’s look at the first-half results for 2026 released by the Korean Film Council. Only 4.9% of the total audience in the first half viewed films via special formats like IMAX, SCREENX, or 4DX. However, this 4.9% generated 7.9% of total revenue. That’s a 1.6x difference between audience share and revenue share. Calculating this, the spending per person for premium screens is about 16,246 KRW, compared to the 10,149 KRW average, meaning one premium seat earns over 6,000 KRW more than a standard one.

Megabox’s numbers are even more impressive. As of November 2025, the revenue share of their high-tech special screens reached 14.4%, a twofold increase from the previous year. Seeing that 88% of those who watched the finale of ‘Attack on Titan’ chose MX4D, it seems audiences are beginning to treat premium screens as a default rather than an exception. The 11% year-on-year increase in average ticket prices for the third quarter is also related to this trend.

Thus, premium screens are an attractive card for theaters. The revenue per seat is undeniably higher, and considering that Dolby Cinema’s audience share reached 33.38% by the fourth week of ‘Avatar: Fire and Ash,’ a single blockbuster can fill an entire premium screen. The problem is whether this card can be played indefinitely.

Can Increasing Premium Screens Help When Overall Revenue is Halved?

Let’s pause and look at the big picture. According to the ‘2026 Cinema Market Report’ by RSQUARE Research Center, annual domestic theater revenue in 2025 was approximately 1.047 trillion KRW, a 45% drop from 1.914 trillion KRW in 2019. The number of moviegoers fell from 226 million to 106 million—less than half. The number of released films also dropped 66%, from 1,740 in 2019 to 585 in 2025.

When you overlay these numbers, a strange picture emerges. The pie has been halved, yet the slice representing premium screens keeps growing. It’s not mathematically impossible; if premium revenue grows faster than standard attendance declines, the share of premium screens can increase even if total revenue falls. However, whether this structure can save the entire theater industry is a completely different question.

In reality, the number of theaters themselves is shrinking. The number of CGV locations fell from 199 in 2023 to 196 in 2024, and down to 184 by the third quarter of 2025. Last year alone, 12 locations including those in Suncheon, Mokpo, and Changwon closed. Megabox is currently undergoing rehabilitation, with its direct-managed screens dropping to 300 by the end of H1 2026, down from 308 at the end of 2025, and direct-managed seats decreasing by 7.6%. Lotte Cinema and Megabox are even in the process of a merger. Industry experts suggest that even after the merger, more than 100 locations could disappear due to consolidation.

In short, while premium screen revenue is rising, the theaters meant to house them are disappearing. Trying to solve the problem by increasing screens ignores the fact that the foundation is already shaking.

The Physical Limits of Expansion: Fixed Locations

Geographical analysis shows why building more premium screens isn’t a silver bullet. There are 27 IMAX screens in Korea, and 14 of them are concentrated in the Seoul metropolitan area (5 in Seoul, 8 in Gyeonggi, 1 in Incheon). The remaining 13 are spread across Daejeon, Chungnam, Chungbuk, Gangwon, Daegu, Busan, Ulsan, Gyeongnam, Jeonnam, and Jeonbuk. Many regional metropolitan cities have only one or two IMAX screens.

Building a premium screen isn’t just about construction. It requires specialized design for screen specifications, sound equipment, and seat spacing, with much higher initial investment costs than standard screens. It’s hard to justify prioritizing premium screen placement in regions with smaller populations like small and medium-sized cities. Consequently, expansion is likely to remain concentrated in major metropolitan commercial areas where audiences already flock, potentially widening the revenue gap for regional theaters—though this is hard to confirm without more detailed regional revenue data.

There is also a physical limit to the number of seats. The capacity of an IMAX or Dolby Cinema screen is fixed, and if one blockbuster occupies that screen for weeks, there is no room for other films. The H1 report also points out that “if a blockbuster occupies a premium screen for a long time, the entry of other films into special screens is delayed.” If the model is just a few blockbusters sharing a limited number of premium seats, the effect of expanding the overall audience base is bound to be limited.

The Real Reasons Audiences Left: Ticket Prices and Lack of Content

If we only talk about premium screens, it’s easy to miss the bigger problem. According to a Consumer Watch survey, 41.0% of consumers cited ‘8,000 to under 10,000 KRW’ as the appropriate ticket price. This is quite a gap from the current 14,000–15,000 KRW for standard screens. Compared to 2019, ticket prices have risen 36.3%, while the consumer price index rose 17.1%, representing a 19.2 percentage point gap.

However, there’s an interesting point. While 45.9% of respondents in the same survey said their OTT usage increased over the past year, the timing of OTT releases wasn’t the biggest reason for reduced theater attendance. A report in a Korean film webzine also diagnoses that “the lack of movies worth seeing is the biggest reason for the decline in theater attendance.” In fact, as the average return on investment for commercial films hit -31%, investment shrank, leading to a 66% drop in new releases. It’s a vicious cycle: fewer releases lead to fewer viewers, which leads to further reduced investment.

To summarize: the reason audiences aren’t returning to theaters isn’t a lack of premium screens, but more fundamental issues of ticket prices and content supply. Premium screens are a means to sell more expensive tickets to people who have already decided to visit the theater, not a way to bring back those who have already left. We shouldn’t confuse the two.

Other Cards Theaters Are Actually Playing

Beyond premium screens, the industry is exploring other alternatives. The RSQUARE report suggests converting some screening rooms into sports facilities or exhibition halls, or airing ‘alternative content’ like sports broadcasts, concerts, or lectures instead of movies. There is an increasing number of cases where idol fans rent out entire theaters for private screenings, and concert live viewings often have higher profit margins than regular movies, even with smaller audiences.

There are also government initiatives. A subscription-based pass that allows viewing four movies for 15,000 KRW a month is under review, and starting in August, 6,000 KRW discount coupons will be available up to four times per person. However, it remains to be seen whether a subscription model will actually increase attendance. While it may lower effective ticket prices, it doesn’t solve the fundamental issue that there are “no movies worth watching.”

Discussions are also underway to legally mandate holdback periods (the time between theatrical release and OTT availability). The theater industry argues for minimal legal protection, while distributors and consumer groups worry about restricted choices. Interestingly, as confirmed by the Consumer Watch survey, the real reason consumers avoid theaters is content and price, not holdback periods. Even if holdback laws are adjusted, the root cause is likely to remain.

It’s Not About the Number of Screens, But How We Use the Space

To borrow words from an RSQUARE Research Center analyst, “The era of quantitative expansion for the theater industry that continued since the 2000s has effectively ended.” The diagnosis is that future competitiveness will depend on space efficiency and the diversification of business models, not the number of screens. If this is true, building more premium screens might just be an extension of the old way of “increasing the number of screens.” The real battleground seems to be about what to fill these spaces with besides movies, and how to address the fundamental issues of ticket prices and content supply.

Of course, this doesn’t mean premium screens are meaningless. There is no reason to refuse a card with high profitability per seat. However, given geographical limitations and the rate at which the overall pie is shrinking, it’s unlikely to solve the entire crisis of the theater industry. The numbers suggest that premium screens are a way to sell better to those who have already come, not a way to bring back those who have left. I’ll be watching to see what the next move is when the second-half results come out.