Whole Lotte Love! CineAsia honors Won Chun Cha and his pioneering cinema chain

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Cinemas Features

Lotte Cinema, one of South Korea’s leading cinema chains and recipient of this year’s CineAsia “Special Achievement Award,” has a surprising background. It is part of Lotte Group, one of the country’s largest conglomerates, which currently comprises more than 90 business units and employs some 60,000 people. The company group has expanded into multiple countries and today engages in a broad number of industry sectors, including confectionary and candy manufacturing, retail business, construction, IT, fast food, financial services, hospitality, heavy chemicals—and, of course, entertainment.

Getting into the cinema business was an almost inevitable development for Lotte Group that had to occur rather sooner than later.“Lotte Group has traditionally been very strong in retail and distribution. And since one of the keys to successful retailing is the ability to attract consumers, it was natural for the Group to venture into movie exhibition,” explains Lotte Cinema’s CEO, Won Chun Cha. “During the initial stage, Lotte Cinema was a division of Lotte Shopping and opened theatres in Lotte shopping malls. This move triggered an industry-wide trend, as many shopping malls in Korea today host multiplex cinemas.”

Starting out with a handful of theatres exclusively in Lotte shopping malls, Lotte Cinema has of course long since spread out beyond these boundaries and its venues can now be found in a myriad of general commercial establishments outside of the Lotte umbrella. Currently, Lotte Cinema operates 818 screens in 115 theatres across the country.”The theatres are concentrated in Seoul with 173 multiplex screens in total,” adds Cha, but of course there also are cinemas in other larger cities like Busan and Daegu, for example. In 2016, Lotte Cinema sold 65 million admission tickets in Korea, with a slight increase of an estimated two to three percent expected for 2017. As such,Lotte Cinema presently is South Korea’s second-largest exhibitor after market leader CJ CGV. But the company is working on streamlining its operating efficiency. “We have just enhanced the operating efficiency of our theatres by introducing our NOC [Network Operation Center], which controls screenings centrally,” Cha notes.

It is this sort of technological savviness that was an important factor in helping Lotte Cinema earn this year’s CineAsia Special Achievement Award. The company’s tireless pioneering and spearheading of the latest technologies is nothing short of remarkable and perhaps one of its greatest strengths. “To differentiate ourselves from competitors, we are actively adopting new technologies all the time to improve the overall quality of the cinema experience for our audiences. For example, we were the first to introduce services such as the ‘Baro Ticket’ and ‘Baro Popcorn,’” Cha reminds. “Baro,” of course, is a Korean word literally meaning “immediate.” In this context,by utilizing the “Baro Ticket” service, consumers can book their ticket via a cellphone app and only need to present their screen to gain admission. Accordingly, “Baro Popcorn” allows moviegoers to purchase snacks via app and pick them up at concession stands without having to queue. But the biggest technological coup for Lotte Cinema this year without doubt was the introduction in July of the world’s first cinematic LED screen, featuring a brightness ten times more intense than that of conventional screens. (See our sidebar article.)

Apart from becoming an ever more powerful force to be reckoned with in its homeland, Lotte Cinema has also embarked on forging a presence in neighboring countries. The company entered the Vietnamese market in 2008 and by December 2017 had established 150 screens in 33 locations there. “Our Vietnam operation sold a total of eight million tickets in 2016 and we expect about 25 percent year-on-year growth for 2017,” Cha reports. And China has been on the map for Lotte Cinema since 2010, with currently 96 screens in 13 locations. While in 2016 the Chinese venues sold five million admission tickets, year-on-year growth for 2017 is predicted to be somewhat slower than in Vietnam, at around five percent. This probably has something to do with the fact that China boasts a much greater number of competing cinema exhibitors than relatively underdeveloped Vietnam.Furthermore, Lotte Cinema is also planning to enter the Indonesian market sometime in 2018. That expansion certainly makes sense, too, because as Cha observes, “Indonesia has the fourth-largest population in the world and one of the highest untapped potentials for movie exhibitors in the whole of Southeast Asia.”

Meanwhile back home in Korea, Lotte Cinema in 2014 opened Asia’s so far largest theatre, Lotte Cinema World Tower, in Seoul. That record still stands and is even more impressive for the fact that Lotte Cinema World Tower also contains the currently largest cinema screen in the world, SuperPlexG, which measures an astounding 34 by 13.8 meters. Amazingly, the auditorium is also fitted with 165 speakers supported by Dolby Atmos processors, something which surely ought to be yet some other record of sorts.“Lotte Cinema World Tower has 21 screens and 4,609 seats. The smallest of the auditoriums, Silkroad, is dedicated to Chinese films and comprises 96 seats, while the SuperPlexG auditorium has 628 seats,” Cha elaborates. He adds that the screen’s world-record status was confirmed by the Guinness Book of World Records at its inauguration in 2014. “However,” muses Cha, “our understanding is that China has recently built a larger auditorium.”

But perhaps a few additional words about Lotte Cinema World Tower are in order to emphasize even more clearly what an enormous role the company has played in transforming Korea’s cinematic exhibition landscape. The multiplex venue is located in the555-meter-high, 123-story Lotte World Tower, which is part of a sprawling mall complex. The skyscraper itself presently is not only the tallest building in South Korea but also the fifth-tallest in the world.In 2016, Lotte Cinema World Tower alone sold 3.1 million tickets, with around ten percent growth year-on-year anticipated for 2017. Cha describes the venue as “the unparalleled landmark cinema in Korea…as audiences can enjoy diverse films in our top-class, differentiated specialized screen categories, including Super S, which is the world’s first LED screen, Charlotte, Super 4D, SuperPlexG, CineFamily, CineCouple and Arte. We pride ourselves in being able to offer a truly authentic cinematic experience.”

And things won’t simply rest there, because the company has already announced plans to open five to seven more Super S venues by 2018 so that, Cha declares, “more consumers can enjoy an enhanced movie experience that provides the highest brightness level in the industry, as well as infinite contrast ratio and distortion-free presentation.”He adds that while discussions with Samsung Electronics, the screen’s developer and manufacturer, are still underway, a second LED screen has already been installed in Lotte Cinema Centum City in the southern port city of Busan in time for the recent Busan International Film Festival.“The initial response from the audience [regarding the Super S screen] was very positive. Further expansion [to other locations] will be based on site analysis and efficiency, as well as audience feedback. We are also reviewing the possibility of introducing LED screens in our overseas operations as well,” Cha explains.

Asked about his main career achievements since having been appointed to the position of CEO in 2013, Cha hesitates briefly, then replies, “I believe there are largely three.” The first one, he says, was the grand opening of Lotte Cinema World Tower in 2014. Secondly, the company’s successful entry into the Vietnamese market spilled over into Cha’s tenure,with approximately 100 new screens added and the company’s overall revenue skyrocketing by a staggering 500 percent in those few short years. Third is the crucial strategic partnerships Lotte Cinema established in Korea with global partners such as Paramount Pictures in 2015 and the Globalgate IP Consortium in 2016, which have since become a very important part of its overall business. After another moment of reflection, while brandishing a smirk, Cha continues: “Well, now that I am thinking about it, there is one more achievement that I probably should mention… We have become a major film distributor in Korea by investing and producing seven to eight commercial local movies a year.” There we have it. A true leader like Won Chun Cha does not dwell on what he personally has accomplished, but rather about the achievements of the company as a whole.

So what’s playing in Korea’s movie temples these days? Well, things have changed considerably, according to Cha. From the 1970s to mid-’90s, audience demand for Chinese movies, including from Hong Kong, was very high. However, that preference shifted as the millennium faded out. Up until the late 2000s—and before the recent stellar rise of Korea’s indigenous movie industry—foreign films, particularly Hollywood fare of all genres and descriptions, dominated programming schedules. Then, around 2010, the Korean film industry started to take off like a rocket and today the ratio of Korean titles versus foreign films is approximately equal. Meanwhile, audience interest for movies from other Asian countries is low, so their presence in programming schedules is minimal.

 

“The CineAsia Special Achievement Award is a great honor for Lotte Cinema. I would like to extend my sincere gratitude to all of our partner companies who enabled us to come this far. Lotte Cinema, while continuing its growth in Korea, additionally aims to expand in Vietnam and China, and will also enter new Asian markets. Furthermore, we will continue to concentrate our investments and resources in order to introduce new technologies and services to our audiences. I ask for the continued cooperation and support of our partner companies so that we may carry on this strong positive momentum. Thank you.”—Won Chun-cha