CJ CGV will close its final Los Angeles location in 2025 and withdraw from direct theater operations in the United States.
The company says it acknowledges the structural shift brought by the pandemic and the rise of OTT (online streaming platforms such as Netflix and Disney+) and will reorient toward technology-focused venues.
This move exposes the limits of running overseas company-owned chains and the need to reprioritize resources.
“Pulling Back from the U.S.” — A Korean Multiplex Faces Hard Choices
Overview
This is a turning point.
CGV, South Korea’s largest multiplex chain, entered Los Angeles’ Koreatown in 2010. However, after roughly 15 years the company will end its direct theater operations in the U.S.
In September 2025 the last LA theater will close its doors, and CGV plans to shift weight to global partnerships built around its technologies like 4DX and ScreenX (immersive theater formats that add motion, scent, or wraparound screens).
Consequently, CGV aims to license or jointly operate specialty theaters rather than run company-owned sites in the U.S.
History
It was a gradual expansion.
After opening the first Los Angeles location in 2010, CGV added theaters in Buena Park in 2017 and San Francisco in 2021.
The company tried to adapt by offering reserved seating and recliners—services familiar to Korean audiences—as part of its localization effort.
However, the pandemic and the rapid growth of OTT platforms led to a steep drop in moviegoers and accelerated profitability problems.
Situation Assessment
The crisis is multi-layered.
Industry data suggest U.S. box office receipts in 2025 are roughly 15% of 2019 levels in certain measures, indicating severe contraction.
Meanwhile, long-term audience drift after COVID-19 and a shift to OTT content consumption are reshaping the market.
At the same time, fierce local competition and high operating costs made a sustainable profit model difficult.
Argument for Exit: A Reasonable Decision
Responding to Market Reality
This is a pragmatic call.
Post-pandemic foot traffic has not recovered to pre-2020 levels.
Given the rapid rise of OTT and changing viewing habits, running loss-making company-owned theaters in the U.S. would erode long-term corporate value.
Therefore, rather than continuing to sink funds into a few overseas locations, focusing on core competencies is defensible from an efficiency standpoint.
Validity of a Tech-Centered Strategy
Differentiation is the play.
CGV’s strengths—4DX and ScreenX—enhance the in-theater experience by adding physical effects or expanded visuals.
If those technologies are licensed or operated in partnership with local owners, CGV can reduce operating risk while keeping its brand visible.
This model can improve investment efficiency and free capital for R&D or marketing.
Resource Focus and Financial Stability
It stops the bleeding.
Ending direct operation cuts fixed costs such as rent, staffing, and utilities.
Over time this can strengthen the balance sheet and allow funds to be redeployed into higher-return activities.
Investors and shareholders are likely to see this as a reasonable reallocation of scarce resources.
Argument Against Exit: Cultural Loss and Strategic Missteps
A Gap in Cultural Reach
This is a real loss.
CGV served as a vital venue for Korean films and events in the U.S., especially for Korean-American communities and fans of Korean cinema.
Closure of company-run theaters reduces opportunities for Korean-language screenings with subtitles and for community film events.
That diminishes cultural outreach and local brand presence.
Consequences of Weak Localization
This reflects strategic shortcomings.
Focusing sites in ethnic enclaves provided initial stability but limited long-term growth.
Marketing and service adjustments to attract mainstream American audiences were insufficient, and not enough testing was done to see if Korean-style services fit U.S. habits.
Those lapses contributed to failure to scale.
Not Just the Pandemic’s Fault
This is a structural problem.
While COVID-19 was a major shock, internal issues—cost structure, site selection, and partner management—also compounded the damage.
Those problems accumulated over time and are not solved merely by exiting a market.
Lessons here matter for other companies planning global expansion.
In-Depth Analysis
The causes are multiple.
Site choices concentrated on Korean-American neighborhoods. However, that narrowed the potential audience and stalled long-term growth.
Marketing to mainstream viewers was limited, and the company struggled to show clear advantages over local competitors.
In short, differentiation and local consumer insights were weak.
Financial strain was another major factor.
U.S. theater operation carries high upfront and recurring costs—leases, staffing, and equipment investments add up.
Sustained losses squeeze new investments and eventually force retrenchment.
Reordering investment priorities became inevitable.
CGV’s choice is both pragmatic and painful: it reflects solid business sense but also forfeits cultural touchpoints.
That highlighted line captures the tension between commercial strategy and cultural presence.
Moving to a tech-led partnership model may strengthen competitiveness. However, it remains uncertain whether specialty formats and licensing will attract enough U.S. customers to replace the lost local presence.
Policy and Industry Implications
There are lessons to keep.
Companies expanding abroad must do more than chase market share. They need strategies tailored to local rules, consumer habits, and legal frameworks.
Firms should define realistic payback horizons and financial plans, and governments can discuss measures to support cultural industries abroad.
Conclusion
In short, the exit reflects a mix of external shocks—pandemic and OTT—and internal strategic limits.
CGV will stop direct theater management in the U.S. and pursue global partnerships centered on its theater technologies.
This is a strategic move to cut short-term losses and aim for long-term competitiveness.
However, it leaves unresolved the cultural gap and the need for deeper reflection on localization and future international rollouts.
Key takeaways are these.
First, external shocks combined with internal strategy determine the fate of overseas ventures.
Second, a technology-first approach can reduce operating risks and expand brand reach.
Third, non-financial values—cultural outreach and local adaptation—must still be weighed carefully.
What do you think? Was CGV’s U.S. exit a sensible decision, or a missed chance to build cultural ties?
