CJ CGV will expand investment in outdoor advertising and 4DPLEX next year. The company plans to generate additional revenue and target overseas markets to improve results, offsetting sluggish audience demand and a decline in screens.
According to ChosunBiz reporting compiled on the 16th, CGV plans to increase headcount and budget for its outdoor advertising business next year compared with this year. Outdoor advertising refers to media that uses exterior spaces of buildings with heavy foot traffic, such as shopping malls and sports stadiums.
CJ 4DPLEX, a subsidiary in which CGV holds 90% equity, also plans to increase headcount and research and development spending next year to expand its presence in overseas markets and strengthen its technological competitiveness. The move is seen as a strategy to reduce reliance on movie theaters while securing differentiated global competitiveness.
CGV is refining its business strategy to overcome the slump in Korea's film industry, including a shortage of blockbusters and declining audience numbers. At the end of 2021, it merged with the advertising institutional sector of CJ OliveNetworks to launch a screen advertising business. The following year, it expanded into areas such as outdoor advertising and began diversifying revenue.
Through that business, it posted 137.6 billion won in revenue and 18.5 billion won in operating profit in 2022, and 157.4 billion won in revenue and 27.8 billion won in operating profit in 2023.
Last year, revenue fell to 156.3 billion won and operating profit stayed at 28.6 billion won, slowing its growth. However, within CGV, the view is that growth potential is sufficient, and outdoor advertising is being evaluated as a core business for the future. Outdoor advertising accounts for half of advertising business revenue, and various corporations regard it as a channel to expose their products and services.
An official said, "We see greater growth potential than other advertising methods, with the outdoor advertising market alone reaching 1.2 trillion won," adding, "As digital technology advances, it has become easier to combine outdoor media with digital, establishing it as a new type of advertising platform, so we are allocating resources."
Through its subsidiary CJ 4DPLEX, established in 2010, CGV is growing 4DX and ScreenX as next-generation core businesses. These are technologies that implement multisensory experiences and multi-faceted screening spaces, aiming to provide audiences with a movie experience distinct from the past. By introducing special environment equipment into theaters, seats move according to the scenes, or scents matching the film's content are released.
CJ 4DPLEX has set up local subsidiaries in the United States, Japan and China. It increased its overseas market share by partnering with the U.S. theater chain corporations Cinemark in 2023 in Europe and this year in the United States. Although it posted a 2.5 billion won deficit in the first half of this year, ending its run of surpluses since 2022, it is said to be planning to increase headcount and research and development spending to further advance its technology and theaters.
CJ 4DPLEX invested 6 billion won in research and development in just the first half of this year. That is about three times the 2022 level (2.3 billion won), and the plan is to continue aggressive investment to strengthen technological competitiveness. It also sketched out a blueprint to grow revenue to 740 billion won by 2030.
A CGV representative said, "It is premature to speak hastily about next year's business direction," but noted, "We do have plans to expand special auditoriums with 4DX screen technology through CJ 4DPLEX." The person added, "There is a broad framework to expand our proprietary technology overseas," and "We will also achieve management efficiency by improving the structure of our domestic business."