The Korea Herald

ssg
피터빈트

RNR Inc. challenges industry norms with innovative 'Monoplex' theaters

By Yu Ji-soo

Published : May 29, 2023 - 14:58

    • Link copied

RNR Inc. CEO Ray Seok (RNR Inc.) RNR Inc. CEO Ray Seok (RNR Inc.)

Seoul-based content distribution company RNR Inc.’s “Monoplex” is a type of theater where one can watch movies in a designated, personally-optimized space in places such as apartments, hotels, office buildings and more. Monoplex offers a bespoke theater experience which screens movie premieres at the same time as more widely known multiplexes in city centers.

Ever since the outbreak of the COVID-19 pandemic, public interest in Monoplexes has surged, according to the company, as people have become increasingly reluctant to gather in busy spaces, leading to the rising popularity of streaming services which allow people to enjoy films online and outside of theaters.

Those who enjoy small gatherings for watching movies with family, friends and acquaintances are especially keen on using Monoplex, while business owners are eyeing this new viewing model as a profitable business.

Unprecedented business model

"We create theaters within existing spaces and provide one-stop operation solutions for all aspects of moviegoing, from reservation to ticket price calculation and, of course, content distribution. The owner of the space only needs to check the coming and going of viewers and manage the cleaning of the facilities. Because we make use of existing spaces and employees, there is a reduction in infrastructure investment costs as well as operational and maintenance costs. It usually takes 8 to 10 years for multiplexes to collect their investment funds, but with our Monoplex business model, it only takes a year," explained RNR Inc. CEO Ray Seok.

With a rich history encompassing 130 years, cinema is a substantial industry that covers a wide range of processes from production and distribution to screening and viewing. However, in the past decade, all of these processes have rapidly become digitized. With Monoplex, Seok incorporated this trend of digitization and redefined the facility- and device-centered industry dominated by multiplexes to adopt digital and content distribution. He thus brought a new business model not only to Korea but also to the global market.

One might think screening movie premieres at non-multiplex theaters is a difficult business, but no other company before RNR Inc. has succeeded at commercializing it. Many factors are intertwined in the numerous processes involved in this business, from intellectual property and distribution license agreements to reservations and settlements. It is a never-before-seen business model that provides total solutions and even enables profit generation for various stakeholders.

"Our system for screening movie premieres is a special one. Projection equipment such as projectors and servers have encryption functions that allow control of the content. This is a standard Hollywood method, but it's a difficult task. We build hardware, supply content, and develop and deliver operational software. We do everything remotely for you. Any organization or individual who wants to run a Monoplex can own a movie theater with just a click of a mouse,” he added.

Currently, there are 10 Monoplexes in Korea. This month alone, the company launched three theaters. A theater, dubbed DH Cinema, was opened at the community center of DH Xi Gaepo, a landmark apartment complex in Gangnam, southern Seoul, while two others were opened at a resort complex in Jeju Island. More openings are planned in the coming weeks as part of employee welfare at large conglomerates and marketing strategy at large retail outlets.

DH Cinema, a communal movie theater for residents of DH Xi Gaepo Apartments in Gangnam, Seoul. (RNR Inc.) DH Cinema, a communal movie theater for residents of DH Xi Gaepo Apartments in Gangnam, Seoul. (RNR Inc.)

As the economic value of apartments equipped with fancier community facilities is expected to gradually increase here, Monoplexes are also gaining popularity. This is especially true of hotels, where the use of existing spaces can lead to additional revenue, and office spaces, which can be renovated with screens for employees to give presentations or watch movies. On evenings or weekends, they can also be open to the public.

In culturally marginalized areas where there are no theaters that screen premieres, changes can be made in cooperation with local governments. This is possible as Monoplexes can host much smaller audiences, whereas no matter how small a multiplex is, at least 200,000 spectators are required to meet the break-even point. Monoplexes can also be used with a cultural voucher system to promote local cultural welfare.

Growth potential in overseas markets

This year, RNR Inc. is knocking on the door of the US market -- the birthplace of cinema -- with Monoplex at its forefront. Seok has already negotiated with major Hollywood studios to secure various content. Since its establishment, his business has been aimed at globalization. The size of Korea’s movie market makes up just 4.5 percent of the global market -- thus, the main source of profit must inevitably come from abroad.

"When I was an elementary school student who didn't know English, products at the supermarket with the ‘Made in Korea’ label always caught my attention. After learning the meaning of the phrase, I wanted to become the embodiment of it -- someone proudly made in Korea. Although I’ve worked in the film industry for 20 years, everything has always been centered around the US, from production companies to hardware. I want to write history in the global film industry by giving ‘Made in Korea’ a new meaning," Seok explained.

Since its establishment in 2014, RNR Inc. has become the nation's leading company in multiplex hardware supply, digitalization and maintenance services. It manages more than 1,600 out of the 3,000 total theaters in Korea and has also pulled success in China, Vietnam, Indonesia and Myanmar. This was the first phase of RNR Inc.’s business project -- Monoplex is the second. The next mid-to-long-term third phase is the Cine Marketplace project, which will manage the intellectual property of movies based on the distribution network of Monoplex content in the global market and enable fractional investments through blockchain.

Because small-scale films are not IP-managed, Cine Marketplace will serve to manage the release and monetization of them through the Monoplex distribution network. Seok believes in the potential success of this business because all movies have a fandom, no matter how big or small. Therefore, RNR Inc. is also planning to produce film merchandise and set up fractional investments. The IP fractional investment business will be operated in collaboration with ST Owners, a token securities partner of KB Securities.

"Ultimately, our goal is to establish ourselves in the global market as a content distribution platform. We will develop and export our Made-in-Korea projects, Monoplex and Cine Marketplace, into online and offline content platforms. The installation of Korea's distribution platforms around the world will boost the export of Korean content to other countries. I hope the government, which is currently pushing to promote the exportation of content, will also direct attention to overseas expansion of distribution platforms along with production support,” said Seok.

‘Korean version of Disney’

Seok started his career at the film division of CJ ENM, Korea’s entertainment juggernaut, in the early 2000s when the nation’s film industry started booming, led by major conglomerates such as CJ, Lotte and Orion. In particular, at a time when cinema infrastructure was transitioning from film to digital, he worked with major Hollywood studios such as Disney, Warner Bros., Universal, Paramount, Sony and Fox as a hands-on employee in digital transformation.

Until he left CJ in 2010, he could gain insight into the screening industry as he worked at CJ’s multiplex theater brand CGV, while learning about the distribution industry as he worked with Hollywood distributors. After a four-year stint in Hollywood, Seok returned to Korea and borrowed 50 million won ($37,664) to start his own business.

"I didn't even get paid for the first year as I was trying to create a profit indicator for the company. Now, as of last year, it has grown into a company with 52 executives and employees and 15 billion won in sales. I believe that doing business with an understanding of both hardware and software as well as the flow and ecosystem of screening premieres including steps such as distribution and screening, can be credited for these achievements so far,” he said.

The CEO's ultimate goal is to create a new content ecosystem. In the past decade, the global content market has undergone rapid changes. Streaming media services have grown rapidly and had already surpassed the movie theater box office in 2019, before the COVID-19 pandemic. During the pandemic, the box office plummeted 70 percent in just a year, apparently notifying the arrival of the streaming era. However, major streaming service Netflix's stock price also plunged 70 percent relative to its highest point in just half a year due to the growth limit of streaming media. Though offline and online platforms exchange such indicators with each other, neither platform is likely to successfully monopolize consumers’ time.

"A new ecosystem will be created where offline and online platforms can coexist. It will not simply consist of unilaterally delivering content, but it will serve as a form of interaction with the fandom economy. Disney, the most successful company in this industry, is in fact an outdated system. The ecosystem of content creation and consumption must continually change. In the past, the big fish ate the small fish, but now the fast fish eat the slow fish. In this changing ecosystem, RNR Inc. is moving quickly and flexibly with our services, Monoplex and Cine Marketplace, to become a new Disney in a different way than Disney itself,” Seok said.