As major JoongAng Group affiliates including Megabox enter rehabilitation proceedings, anxiety is spreading across the content industry as a whole, from cinemas to broadcasting and drama production. In particular, with growing concerns over disruptions to film revenue settlements centered on Megabox, observers project that the impact could extend not only to distributors and investors but also to related sectors such as cinema food and beverage suppliers.
According to industry sources Sunday, tensions are rising amid the possibility of disruptions in the May film revenue settlement process. Under the settlement structure, which typically operates on a monthly basis, sales generated from May onward may fall within the scope of the rehabilitation proceedings. The film industry is concerned that the recovery seen in cinemas could be halted. In fact, the number of moviegoers in May this year rose 25.1% from a year earlier to 10,677,274, showing a recovery trend. In particular, "Gunche" drew 2.23 million viewers over the month of May, generating 37.5 billion won in revenue. Considering that Megabox holds a market share of about 20%, the May revenue that Showbox, the distributor of "Gunche," is to settle with Megabox is estimated at about 3.6 billion won. Settlement delays are also raised as a possibility for other films including "Super Mario Galaxy," "Michael," and "The Devil Wears Prada 2." There are also observations that disruptions could occur in payments for payment gateway (PG) services, cinema concession (F&B) supplies, and operational services such as cleaning and facility management. In fact, some food and beverage suppliers reportedly considered halting supplies to Megabox but have decided to maintain transactions for the time being.
Some consignment cinema operators and distributors plan to hold meetings soon to discuss response measures. Meanwhile, the Korean Film Council is operating a "Film Industry Damage Report Center" for cinemas, distributors, and production companies experiencing problems such as settlement delays related to the rehabilitation proceedings of Megabox JoongAng.
The industry believes that if settlement delays become prolonged, content supply strategies could turn conservative, including reducing the share of screenings at Megabox or reconsidering release schedules. A more serious problem is that it could throw cold water on a film market that had begun to show signs of recovery. "If the situation becomes prolonged, a vicious cycle of fewer films shown, fewer moviegoers, and worsening cinema revenue cannot be ruled out," an industry official said.
Content production and broadcasting sectors are already being directly affected. SLL's drama "The Rediscovery of Romance" has suspended filming for about a month and entered a period of reorganization, citing script revisions and filming conditions during the rainy season. JTBC also decided to suspend "Han Mun-chul's Blackbox Review" and "Lecture Battle Show: Scammers," which had been scheduled to air on the 24th and 25th.
