The nation's leading cinema corporation CJ CGV is facing complaints that it has reduced consumer benefits following the overhaul and transfer of its web and application service systems. CGV stated that the reduction in preferential policies was not the case, attributing the issues to "errors that arose during the service overhaul."
According to industry sources on the 17th, CGV recently restructured its user interface (UI) and user experience (UX) as well as the reservation process. It has also presented a blueprint to transform into a complex cultural space beyond just films. At that time, CGV noted, "We will continue to respond quickly to changing environments through a more sophisticated and faster operating system and will make efforts to improve customer satisfaction."
To this end, it made the unprecedented decision to close all its locations nationwide, but after the overhaul, opinions emerged, mainly in film specialty communities, that CGV had reduced the benefits it provided to consumers.
A 1% equivalent amount was accrued for payments made through Naver Pay, but this has disappeared with the recent overhaul, and CGV has reduced the validity period for CJ Points earned through writing reviews from the previous 24 months to 1 month.
Additionally, complaints have been raised that the points that were previously doubled for viewing the exhibition 'Arthouse Special Exhibition', centered around specific themes or films, have been abolished, as well as the benefit of giving VIP customers participating in film stage greetings a ticket price discount of half.
Some have voiced concerns that CGV reduced consumer benefits due to a decline in financial stability. In fact, CGV's liability ratio is 400%, and its current ratio is 42%, indicating that liabilities far exceed capital and that there is insufficient capacity to repay short-term debt. Last year, it closed four theaters citing cost reduction and profitability, and so far this year, it has also shut down the Songpa and Yeonsu stations, as well as the Gwangju Terminal location.
Although performance has been relatively decent, it is struggling in the domestic market. CGV recorded consolidated revenue of 1.9579 trillion won and an operating profit of 75.9 billion won last year, achieving profitability for two consecutive years. Compared to 2023, revenue increased by 412.1 billion won (26.7%) and operating profit rose by 26.8 billion won (54.6%). In the first quarter of this year, it performed well overseas, exceeding 10 billion won in operating profit in Vietnam and China.
However, domestic revenue last year was recorded at 758.8 billion won, a decrease of 14.5 billion won (1.9%) compared to 2023, resulting in an operating loss of 7.6 billion won.
CGV stated, "The benefits previously provided have not been reduced." A representative from CGV mentioned, "Some functions or benefits have been delayed in implementation during the overhaul process," adding, "We are aware of the confusion in online communities and social media (SNS), and the relevant departments are currently working hard to improve the errors."
An industry representative explained, "It is true that multiplexes, including CGV, are facing a crisis, but consumer benefits are not a significant factor in cost reductions or financial restructuring," adding, "As CJ is a corporation that has invested in cultural content businesses such as films for many years, it is expected to devise strategies to maintain its relationship with consumers in the long term."