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Police investigations, “ghost screenings” and political intrigue — it has all the elements of the darkly original films that South Korea is famous for. But the drama in Seoul is centered on the film industry itself, with allegations that the box office performance of hundreds of films has been inflated.
The anti-corruption unit of the Seoul Metropolitan Police Agency has recently raided three multiplex chains — CGV, Megabox and Lotte Cinema — and three distributors. They have referred 69 individuals to prosecutors for possible criminal charges over allegations that cinemas colluded with distributors to exaggerate ticket sales for over 323 films in the past five years.
The police agency has revealed that as many as 2.67 million theater admissions have been forged for films including Emergency Declaration, a 2021 disaster blockbuster, and Hot Blooded, a 2022 crime thriller.
While South Korea’s flourishing film industry has gained international acclaim, with director Bong Joon-ho winning the Academy Award for Best Picture in 2020 for his dark comedy Parasite, its domestic market has been struggling since the pandemic.
In South Korea, the primary box office metric is admissions, not revenue. Consequently, tickets are often given away or sold at low prices to distributors and corporate sponsors to boost attendance figures and box office rankings, resulting in early-morning or late-night “ghost screenings”. This enables producers to surpass the 10 million admissions threshold seen as success in a country with a population of 52 million.
“Sales at theaters dropped during the pandemic and [cinema chains] began to demand many ways of promotions,” said director Goh Young-jae, head of distributor Indie Plug. “As a distributor, it is hard to turn down their requests, given our concern about getting proper screen time.”
“It is an open secret in the industry that theaters and distributors issue and buy lots of promotional tickets to drive initial sales, which is key for a movie’s performance,” said a local film director. “The decades-long practice got worse during the pandemic as theaters struggled to lure the audience.”
Industry executives allege that the police investigation was partly triggered by the unexpected popularity of The Red Herring, a crowd-funded documentary about former justice minister Cho Kuk, who attempted to reform prosecutors’ offices. Police claim that attendance figures were lower than reported for the film’s screenings. “The probe also seems politically motivated,” said Oh Dong-jin, a film critic.
The culture ministry has urged the state-run Korean Film Council, responsible for collecting local box office data, to enhance transparency. Culture minister Park Bo-gyoon stated last month, “The controversy over box office rigging has eroded public confidence in the local film industry. The industry needs to come up with various measures to restore public confidence.”
Promotional screenings account for less than 5 percent of overall admissions, according to the Korean Film Council. “Korean filmmakers are more desperate to attract theater audiences early to break even, so they are incentivized to issue more promotional tickets as part of their viral marketing,” noted an official at the Korean Film Council. “If not, there is no way to make up for their losses with other revenue streams.”
The industry had already faced increasing calls to change the box office metric prior to the police investigation, said Oh. “It is a bit outdated. It is time to adopt the global standard, as the Korean film industry has globalized,” he added.
CGV and Lotte Cinema have stated that they are cooperating with the police investigation and have agreed to cease late-night “ghost screenings”. Megabox declined to comment.
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