Category Archives: Box Office

Why North American Movie Ticket Prices Rose In 2014

Movie Tickets In Popcorn

A week after the investment firm PricewaterhouseCooper released a survey in which found 53% of its 1,000 respondents felt movie tickets cost too much, the National Association of Theatre Owners (NATO) reports that the average cost of a movie ticket in 2014 rose to USD $8.17.

That figure is a 0.50% increase from the USD $8.13 average cost of a movie ticket in 2013. Movie ticket prices roller-coastered in 2014 from quarter-to-quarter but generally stayed above the USD $8 mark. The second quarter saw price levels topping out at USD $8.33 before declining to USD $8.08 during the third quarter before rising once again to USD $8.30 for the last three months of the year. Fourth quarter prices were actually down year-over-year from USD $8.33 in 2013.

We have found these numbers, taken without considering any context or analysis, can be a bit misleading. For instance, many industry-watchers might assume the cost of a movie ticket declined in the fourth quarter of 2014 because exhibitors were lowering prices to attract audiences during a down year in attendance and box office. While that may account for a portion of the decline, it’s also helpful to look at the releases in theatres during the fourth quarter of both years.

In 2013, “Gravity” was doing blockbuster business on its way to Academy Award nominations and Oscar wins. Because the film was shot in 3D and with IMAX in mind, many moviegoers chose to see it in those formats, both of which come with premium ticket prices. On the other hand, in 2014, we had “Interstellar” on its way to doing decent business, which though popular on IMAX was not released in 3D, and “The Hobbit: The Battle of the Five Armies” which performed weaker than expected.

This of course is assuming that the average ticket price is calculated by dividing the period’s box office by its admissions. Historically however, NATO has conducted a survey of its members to determine the average ticket price for a quarter or year.

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Zut Alors! France Discovers Secret to Reversing Cinema Decline

France 4 Euro scheme

While the US grapple with a poor summer box office (BO) most of western Europe seems to have accepted that as a mature cinema market, its countries will see stasis or gradual stagnation only interrupted by the occasional outsize local hit (Italy last year, Ireland this summer). German epitomises this trend, with the recent study of cinema attendance 2009-2013 showing an overall slow decline.

But one European country has challenged the notion that secular decline in the cinema sector is a structural inevitability of changing demographics, technological and economical trends – and it appears to have reversed that decline. Not surprisingly, perhaps, the country in question is France.

France is the only country in the world to take cinema seriously enough to consider the declining cinema attendance a national emergency. Having launched several public initiatives to counter it, the good news is that early indications are that the decline can not just be halted but reversed.

Focus on the Next Generation of Cinema Goers

We have reported earlier on preliminary findings, but these have now been confirmed by the the Centre National du Cinéma (the National Cinema Centre - CNC) in a major report.

On 1 January 2014 French exhibitors introduced a scheme whereby children under the age of 14 would only pay four euro (€4 – USD $5.25) for cinema tickets for every screening of every film for every day. This was a joint public-private effort with the French government doing its part, as noted in an article published a month before the scheme was launched.

This operation, “launching in 2014 but which is intended to continue beyond”, is in the context of the government’s decision to lower on January 1st the VAT on cinema admissions of 7.5% to 5% said Marc-Olivier Sebbag, General Manager of the FNCF (National Federation of French Cinemas).

The VAT reduction desired by the government, is being voted on by MPs. The Minister of Culture Aurélie Filippetti welcomed the “democratization initiative taken by members of the FNCF.”

There was some opposition from distributors at the time – I can’t imagine Disney in particular being thrilled about this – but with buy-in from all cinemas, as well as the Ministry of Culture, there was no way that Hollywood studios would be permitted to obstruct this initiative.

French films 2014 6-14 year olds

The FNCF was clear that the goal was to reverse the declining attendance, though they were prepared to re-appraise the terms and methods, based on how it played out.

For the federation, the goal is, “in a context of declining attendance,” to encourage young people to come “more easily and more frequently to the movies” and build audiences for the future. “This is a population that goes to the movies as a family, we therefore address the more general family audience,” said Marc-Olivier Sebbag.

“We will take stock at the end of the first year and we will see whether it should be adjusted, for example by changing the age or price,” said he said.

With under-14 accounting for eight to nine percent (8%-9%) of total admissions, or 16 million out of 200 million, this was a significant step as average ticket prices for this age group was €5.50, compared to the average cinema ticket price in France of €6.42.

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Cinema Audiences Getting Older, German Study Finds

FFA logo

The German Federal Film Board (FFA - Filmförderungsanstalt) has published its annual reports on cinema attendance and Top 75 films for Germany in 2013.

Noting successes for German titles last year, the two reports also record a significant decline in cinema attendance by young people but also a marked increase by older patrons. The findings are in line and emphasise trends in other developed markets, highlighting the needs to promote youth cinema attendance, while at the same time anchoring older audiences.

Demonstrating the customary German thoroughness and attention to detail, the reports were produced on the basis of the Media*Scope project from the Gesellschaft für Konsumforschung (GfK), whose film-related data FFA has exclusive use of, with the panel including no less than 25,000 participants and representatives of the German population over the age of 10.

The first report ‘Auswertung der Top 75-Filmtitel des Jahres 2013 nach soziodemografischen sowie kino- u. filmspezifischen Informationen’ (Evaluation of the Top 75 Movie Titles of 2013 by socio-demographic and cinema-and film-specific information)(PDF link) looks at the box office performance of German cinemas of the past year. While German box office as a whole declined from euro 1,033 million to euro 1,023 million (down one per cent) and attendance fell by 4% from 135.1 million to 129.7 million, as highlighted in the European Audiovisual Observatory 2013 annual report’s findings, the FFA report accentuates the positive by focusing on the success of German films.

Germany Top 75 Cinema attendance

Of the 75 most popular film of 2013 no less than 22 were German productions, which achieved an attendance record of 25.2 million tickets sold. This is more than twice as much as the 13 German productions that broke into the Top 75 in 2012 and only achieved attendance figures of 11.3 million ticket buyers. Local production “Fack Ju Göthe” is also the first German film since 2008′s “Keinohrhasen” to be the most successful film of the year, whether German or Hollywood. However, total attendance for both the Top 75 and all film were down on 2012. Even if they were up on the prior two years, the recent high-water mark is still 2009 (Avatar).

Germany cinema attendance age group

The report does an excellent job of breaking down cinema attendance for each Top 75 film by age (above), gender, income group, employment status, educational level, household size, day-of-the-week attendance, awareness of film’s genre and enough other categories to make even Nate Silver cry uncle!

It is the second report, however, that makes for more troubling reading: ‘Kinobesucher 2013 – Strukturen und Entwicklungen’ (‘Moviegoers 2013 – structures and trends’) (PDF link).

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Local Films to Blame for Decline in European Box Office in 2013

European Cinema Statistics 2013

The European Audiovisual Observatory (EAO) has released its statistics on European cinema admissions in 2013 ahead of the Cannes Film Festival and they make for grim reading. We have already written about the preliminary figures (Europe’s Cinema Attendance Decline is Greatly Exaggerated), so we will not cover old ground.

It is worth, however, briefly recapping some of the key analysis that still hold true for this data:

  • Decline was mainly due to lack of any major local hits (Italy was an exception);
  • It was a tale of East and West, with former rising while latter fell significantly;
  • Russia overtaking the UK as Europe’s second biggest cinema market is big news;
  • There is a major question about ‘secular decline’.

So what is new about this data and what more can it teach us?

First Quarter Data Is Pointless

EAO makes much of the fact that Q1 of 2014 is an improvement on the first quarter of the year before.

Provisional Q1 figures from 11 EU markets indicate that admissions in the European Union increased in the first three months of this year, compared to Q1 2013. Quarterly admissions increased significantly in 3 out of the 5 big EU markets, namely in France (+18.9%), Italy (+13%) and Spain (+8.7%), outweighing smaller decreases in Germany and the UK. On a cumulative basis admissions in these five markets increased by 5.6%. As these markets represent around 75% of total EU admissions, it can be assumed that total EU admissions increased in the first quarter. This would also be backed up by data from six additional EU Member States which registered a growth in cinema attendance, including the Netherlands (+4.8%), Sweden (+17.9%), Greece (+8.9%) or Slowakia (+49.5%).

This is true but also largely irrelevant. Coming off a disastrous 2013, it would be shocking if this quarter saw even more steep decline. Oscar-contending films and The Lego Movie attracted customers but tell us nothing about the year as a whole will be an improvement on 2013 or not.

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Europe’s Cinema Attendance Decline is Greatly Exagerated

No decline to be seen here – cinemagoers in Romania

It is appropriate that the European Audiovisual Observatory (EAO) should release its cinema admissions report at the Berlin Film Festival rather than Cannes, because it appeared not to make for sunny or cheerful reading.

The headline figure of 4.1 per cent decline for EU cinema attendance and the second lowest attendance since 2000 made news beyond the traditional trade press. So does this spell doom and gloom for European exhibition? A more careful and nuanced reading of the underlying data yields a more mixed picture and even positive sector trends.

There is no arguing with the data itself and Screen did a good job of highlighting what it was that was dragging down the market:

The cumulative admissions drop in the EU was driven by the significant decline in four out of the five largest EU markets:

Spain (-15.2m; -16%)
France (-10.8m; -5.3%)
UK (-7m; -4%)
Germany (-5.4m; -4%).

Only Italy withstood the general downward trend with admissions estimated to have grown by 6.6% to 106.7 million tickets sold.

It should come as no surprise that with Spain mired deep in recession caused by a massive property bubble, spending priorities for tickets to those multiplexes that were part of the over-building problem, were not high on people’s agenda.

Cyprus saw an even bigger drop of nearly a quarter (-24.4 per cent), though Greece was surprisingly only down by nine per cent, which is less than Sweden’s -9.6 per cent, despite the Nordic major having weather the Great Recession much better than any southern European country. So why did Sweden do worse than Greece?

This statistic shows that it was not so much a bad year for European cinemas as for Euro cinema, ie films made in European countries. Italy’s Sole a catinelle from Medusa earned a staggering $69,903,094, which was nearly three times as much as the second biggest film of the year (Frozen – $26m) earned.

It was the lack of a Skyfall-size domestic hit that dragged down UK, while the highest placed French film only came 7th. In Germany Fack Ju Gohte came second the The Hobbit 2 while in Spain the highest place local film was a miserable 16th place for Mama. So don’t blame audiences, instead blame directors, producers and distributors.

A Continent of Two Halves

More than anything, the report served to highlight the differences between what Donald Rumsfeld memorably termed Old Europe (West) and New Europe (Central and East). It was in New Europe that, with the significant exception of Poland, it was a story of growth that transcended the popularity of local productions – though these helped.

This fact was reflected in local news headlines related to the EAO report, such as ‘Turkish people break movie attendance record‘ and ‘Romania sees 13.8% jump in cinema admissions, second highest increase in Europe‘. Bulgaria saw the highest increase in admissions(+16.7 percent) followed by Romania and then Lithuania (+6.8 percent).

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2013 – Bad Year for Film; Great Year for Exhibitor Share Price

It may seem paradoxical, but while 2013 was a bad year for films in terms of growth, it was an excellent year for cinemas. Even with a strong summer at the box office, 2013 was flat or even down compared to the previous year in most western countries. Only emerging markets like China showed strong and significant growth on the back of their multiplex expansions.

It would seem logical that this trend would be reflected in the share price of listed exhibitors, but analysis by has found that major exhibitors in the four largest English-speaking territories (USA, Canada, UK and Australia) had one of their best years ever in terms of share price. We will examine this, as well as looking at the possible causes and outlook.

We first have to preface the analysis by noting that it is difficult to make a completely accurate like-for-like comparison. While the majority of the largest exhibitors in the US and Canada are publicly traded (Regal, Cinemark and Cineplex are, while AMC is privately owned by China’s Dalian Wanda Group), the same is not the case in UK, where only one of the Big Three is listed (Cinemaworld; Odeon-UCI and Vue are privately held), whereas in Australia the multiplex chains are privately owned (Hoyts) or have complicated joint ownership or subsidiary status (Village and Greater Union/Event Cinemas).

Even so, it is still possible to get a good idea of how markets value exhibitors and why 2013 was a good year for them, as we will see.

USA and Canada

2013 was a flat year in terms of box office growth. Statistics from BoxOfficeMojo tell us that overall gross was $10.925 billion, compared to $10.823 billion the previous year. While up by $100m year-on-year, this “growth” is effectively cancelled out by inflation. The underlying ticket sales are likely to show a decline when the official statistics are published by the MPAA. Projecting an annualized rate The Numbers sees attendance fall from 1.36bn to 1.19bn between 2012 and 2103.

This decline is in-line with what was predicted ahead of CinemaCon last year. Reported in Deadline:

“Bond analysis firm Fitch Ratings forecasts a “modest” decline in 2013 ticket sales and long-term challenges that should “cause concern” for lenders. Studios will find it “difficult to replicate” the success they had last year with hits including The Avengers and The Dark Knight Rises, analysts Shawn Gannon, Rolando Larrondo and Mike Simonton conclude. In addition the 3D market is “starting to mature.””

All-in-all you would think that it would have been good to short stocks in exhibitors, but you would have been wrong.

Screenshot 2014-02-14 15.07.12

Regal Cinemas went from strength to strength as the share price rose from just under $14 per share in January 2013 to close to $20 per share at the start of 2014, before slipping down closer to $19 recently.

Screenshot 2014-02-14 15.15.21

Meanwhile competitor Cinemark started the year below $27 and ended it above $33, before currently landing just above $30. Not as strong as Regal’s growth, but still significant.

Screenshot 2014-02-14 15.12.09

North of the border, Cineplex pulled off the most impressive stock market feat of them all by increasing from C$32 to coming within a whisker of C$45 before declining to just over C$40.

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New Chinese Box Office Records Come As No Surprise

Monkey King and Dad Posters

Thanks to a quota on foreign films limiting the number of imported titles to 34, movie studios have often struggled to get their movies released in China. Apparently there is no quota on box office bragadocio and Hollywood has been able to easily export its affinity for trumpeting their latest movie grosses.

Ironically, the Chinese have turned news of their country’s latest theatrical grosses into one of their own exportable goods. When China set a new single-day box office record by earning CNY ¥248 million (USD $41 million) on January 31st, it made headlines around the world. I get it; touting box office grosses helps promote specific movies. However, there actually happens to be good reason this week to take notice of China’s grosses, which I’ll get to in a moment.

This past weekend marked the start of the Chinese New Year, also known as Lunar New Year, a 15-day holiday that has grown into one of the country’s biggest movie going periods. This has been especially true in 2014. Based on box office alone the year of the horse has already been quite prosperous for the China’s homegrown movies, and presumably, its theatre operators.

Over the holiday weekend “The Monkey King”, starring Donnie Yen took in CNY ¥279 million (USD $46 million) in its first three days of release. Also opening with a bang was “Dad, Where Are We Going?”, and based on its CNY ¥205 million (USD $34 million) debut, I’d have to say the answer to that question is… the bank.

These grosses not only put “The Monkey King” and “Dad, Where Are We Going?” at the top of China’s box office, but were also enough to place them in first and second place on the worldwide chart. Thus the reason for the global fuss being made over the news.

Directed by Hong Kong filmmaker Poi Soi Cheang “The Monkey King” is a big 3D epic adapted from Wu Chen-en’s beloved Journey to the West tales and it was widely expected to attract a big audience. So was “Dad, Where Are We Going?” which is based on a hit reality television show featuring celebrity fathers and their families. It’s first day gross of CNY ¥90 million (USD $15 million) is yet another record breaker; highest single-day gross for a 2D Chinese-language title. Because setting just one record in a weekend is so year of the snake (2013).

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Does Re-Releasing Oscar Nominees in Cinemas Work?

12 Years A Slave

The nominations for the 86th Academy Awards (Oscars, to you and me) have been announced, insta-shared, tweeted, analysed, commented and blogged. The front runners that were all released in the fall will not be out on DVD or Blu-ray for at least a month: Gravity (25 February), 12 Years a Slave (4 March) and American Hustle (18 March), incidentally the same day as Disney’s Frozen. So will it drive people who have not seen them yet to want to catch them on the big screen? For the purpose of this article we will primarily look at North America, as many Oscar contenders such as 12 Years A Slave or Wolf of Wall Street have only just opened overseas.

American Hustle, which has taken over $100m in the US (and Canada) domestic market, is currently doing best with its number two position in the charts behind Lone Survivor and ahead of Frozen. But the film has been going steadily down, as witnessed by this chart from With over 2,600 screens still playing it, there is thus no need to “re-release” the film as it has not gone out of circulation.

12 Years a Slave, which has done extraordinarily well given its tough subject matter, taking in over $39m in the US box office, is currently 22nd in the charts. The film had a classic and steady week-by-week growth in the number of screens showing it: 19 – 123 – 410 – 1,144 – 1,411 – 1,474 (peak) – 1,165 – 1,082 – 497 – 301 – 154 – 151 – 114 and would seem to have largely run its course, as witnessed by the daily chart (same source again).

Gravity is more interesting, sitting three slots below 12 Years in 25th position. It has been out longer than the two above films and largely disappeared from circulation, though at 155 screens it is still ahead of 12 Years a Slave. Gravity displays what is typical for modern blockbusters in terms of spectacular opening ($256m in US to date) and then trailing off, though with more longevity (counted in weeks, not months) than others. It too seems to have largely run its course.

So it is interesting to note that Gravity is getting the biggest push. As reported in The Wrap,

“Warner Bros. will re-release “Gravity” nationwide on Friday, Jan. 17, one day after the Oscar nominations are announced. The exact number of theaters for the re-release will be determined next week, the studio said — though it’s expected to be more robust than a typical limited release. And there will be competition, as it was already shaping up as a crowded weekend.”

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Why China’s Box Office Growth Is Bad News For Hollywood

Hollywood Box Office In China

Spectacular figures showing a 27% year-over-year growth of the 2013 box office in China (PRC) hide several far more troubling numbers for Hollywood studios trying to maintain a hold on the world’s second biggest cinema market. Even before official box office data was confirmed by last year’s merged regulator, General Administration of Press, Publication, Radio, Film and Television, provisional numbers from local market researchers Ent Group, Artisan Gateway and movie website MTime had been reported and analyzed by Variety, Hollywood Reporter and Screen International.

Top-line figures for the Chinese movie market paint one of robust growth, which is particularly welcome to Hollywood at a time when box office takings in established markets such as the United Kingdom and France have not just slowed but gone into reverse. Takings increased from RMB 17.07bn (USD $2.74 billion) to RMB 21.6bn (USD 3.57 billion), representing a growth of 27%. This was partly driven by a growth in the number of screens increasing by over 5,000 to 18,200 representing a 38% year-over-year rise. (The figures have since been confirmed by SGAPRFT)

Yet this is where the good news ends for Hollywood studios and other foreign film distributors:

  • Only three of the Top 10 films this year were Hollywood releases (compared to six in 2012), with the highest grossing Hollywood film being Marvel/Disney’s “Iron Man 3″, earning RMB 753 million (USD $123 million), compared to last year’s top Hollywood title, the “Titanic 3D” re-release, which took RMB 944 million (USD $156.51 million).
  • Hollywood’s total share of PRC box office shrank to 41.3% in 2013 from 52% the year before as local titles dominated with 58.7% of the market.
  • Chinese films enjoyed a year-over-year growth of 54.3%, whereas Hollywood titles had negligible growth from RMB 8.8 billion (USD $1.45 billion) to RMB 8.92 billion (USD $1.47), despite the increasing number of multiplexes and screens.

Stop to consider that for a moment the spectacular rise of 27% was almost entirely down to local films getting more viewers. All those thousands of extra screens in brand new multiplexes did not garner more millions for Hollywood studios. On a comparative per-screen basis, Hollywood films thus declined in China during 2013. Yes, it really is almost as bad as in France and the UK. After the optimism of 2012, which was the first year that PRC allowed 14 additional ‘premium format’ (3D and IMAX) foreign titles to be released on top of the previous annual quota of 20 films, there were further blows for Hollywood this year.

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Homegrown Movies Help Asian Box Office Surge To Record Levels

China, Japan and South Korea

I wonder if senior management at the big three Detroit automakers during the late 1970s and early 1980s experienced the same sense of pending anxiety that many Hollywood studio executives must presently feel. You see, as the media and certain members of the industry spent this past summer lamenting over a string of underperforming blockbusters like “After Earth”, “The Lone Ranger” and “White House Down”, a threat to Hollywood’s long dominance of the worldwide movie market continued its steady growth. What’s more, this threat comes from the very international territory Hollywood has recently courted as an emerging market; a region which has already proven how effective it is at disrupting American industrial supremacy.

This time however, the ongoing business success of one country may not have to suffer as other countries gain market share in the same industry. Bear with me for a moment while I use an arguably exaggerated analogy to detail the current surging Asian box office.

Starting in 1890 and running all the way through the 1960s, the United States was the largest automobile producer in the world. By the 1970s the U.S. automotive industry was ruled by GM, Ford and Chrysler, a group of companies that came to be known as The Big Three. However, after a series of setbacks in the 1970s starting with the 1973 oil crisis, U.S. automakers began to see their market share decline as car buyers shifted to smaller, cheaper and better engineered vehicles built overseas, mostly in Japan and South Korea.

Offerings from companies such as Toyota, Honda, Nissan and eventually Hyundai outsold those from The Big Three to such an extent that by 1981 Japanese automakers were sending cars to the U.S. under a voluntary restraint agreement.

China, which has recently become Hollywood’s new best friend, didn’t export cars to the U.S. so much as they did… well, just about everything else. I’ll spare you the details of what foreign imports did to the U.S. textile industry. Can anyone even remember the last time they wore a piece of clothing with “Made In U.S.A.” on the label?

When we correlate such recent historical cases with the motion picture industry the similarities are easy to spot. Releases from six Hollywood studios earn a lion’s share of the worldwide box office. However, most of the movies Hollywood has been manufacturing lately are big, expensive retreads of previous versions of the same product. For decades, only Hollywood entities could churn out slick and shiny movies with a high production value. The advent of digital technology though, has lowered the cost of film production and distribution to such an extent that producers all over the globe can manufacture product that equals what is being made in Hollywood. These new movies are smaller, less expensive and offer fresh narratives.

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