Category Archives: Box Office

Global Box Office 2014: Asia Comes to West’s Rescue

MPAA global growth

The Motion Picture Association of America (MPAA) has released its 2014 Theatrical Market Statistics report, providing an overview of global box office and trends. Overall box office grew year-on-year by just 1% but to a record USD $36.4 billion. However, the underlying trends point to a surging Asia coming to the rescue of the stagnating North American and plateauing European markets.

In 2014 box office in North America (US and Canada) was down by 5% to USD $10.4 billion, with admissions down even more by 6% to 1.27 billion. Ticket price rise was just 1% (or USD $0.04), which was below the rate of inflation, possibly abetted by 3D box office being down 2% from the previous year to 14% of the total box office. Significantly, films released by MPAA members (i.e. the big Hollywood studios) increased for the first time in five years to 136 titles, though non-MPAA films were also up.

In interesting demographic trends the proportion of tickets sold to older patrons (40-49 and 50-59 year olds) were at an all time high, while tickets bought by those 60+ year olds (13%) were the highest they’ve been since 2011. But while there is a distinct ‘greying’ of the North american cinema population, MPAA still notes that demographics remained stable for 2013 to 2014, with “12-17, 18-24 year olds and Hispanics especially continuing to oversample in tickets sold versus their proportion of the population.” However, there was a troubling collapse in movie going by the youngest demographics.

While the situation in Europe was not quite as bad, overall box office fell by 3% for the Europe, Middle East & Africa (EMEA) market as a whole. This was mainly down to a decline in major markets such as Germany (-7%) and the UK (-5%), that were not significantly enough offset by slight growth in territories such as France and growth attributable to many new screens in Eastern Europe, Turkey and the Gulf & Middle East.

Despite this slump, EMEA came out slightly ahead of North America with USD $10.6 billion versus USD $10.4 billion. This means that EMEA has outperformed or equalled the North American market for three of the last five years. With strong growth in Eastern Europe and the Middle East in the coming years, North America could see itself permanently relegated to third place in the global box office ranking in the future, though the currently weakening euro will not help.

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How Subsidies Distorted China’s “Record” February Box Office

China box office micro-channel Dragon Blade

Much has been written about how China’s cinema box office ‘overtook’ that of the United States this past February. While we have already covered how much of this is down to skewed arithmetic, often without proper context, it now seems that this “record” may require a large asterisk.

Major subsidies by mobile micro-channel ticket providers means that total box office spend over the Chinese Lunar New Year (also known as Spring Festival) period was over-stated by as much as half a billion yuan (USD $80 million), amounting to over one eighth of total earnings, thus easily wiping out the USD $10 million difference between US and Chinese box office in February.

The question of China’s total box office earnings last month hinges on whether we mean “box office” to be what people paid for their tickets or what cinemas earned from the sale of the same tickets. In most countries the two are more or less the same[1], but in China there is a significant difference due to the role played by third-party micro-channel smartphone ticketing services (the mobile e-commerce platforms commonly known as “electricity suppliers” in Chinese).

Micro-channel mobile ticketing providers such as Gewara, Cat’s Eye (Maoyan) and many others are locked in a fierce price war, offering cinema tickets for as little as CNY ¥9.90 (USD $1.58) or CNY ¥19.90 (USD $3.18), to win customers. These companies buy tickets in bulk and at a slight discount ahead of time directly from the cinemas, who thus have assurances of sold seats.  They then turn around and sell these tickets at a subsidised price to savvy smartphone-owning cinema goers. In addition to a low price, these providers offer assured seat selection and convenience.

China’s Lunar New Year season this past February was a particularly busy time for these micro-channel cinema ticket providers. On New Year’s Day Cat’s Eye sales alone reached CNY ¥100 million (USD $15.95 million), while Public Comment sold 6.5 million individual tickets. The battles on screen in this holiday’s blockbuster “Dragon Blade” were nothing compared to the war going on between the different third party ticket providers.

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Exageratting China’s February Box Office Victory Over the U.S.

Dragon Blade

There is an idiom in the English language that states, “Don’t take any wooden nickels”. The phrase sprang up in the United States during the early 20th-century when, during the Great Depression, banks would hand out wooden nickels which could be traded in for prizes. This was practice was designed to attract customers into banks which were seen as unreliable at the time.

The phrase, “Don’t take any wooden nickels” was usually said in parting as a warning not to be duped or cheated by someone who might want to pass off a wooden nickel as legal tender. This same aphorism could also be used to remind us of the circumspect nature required when reviewing specific news media stories, though we already have a more direct recommendation in the saying “Don’t believe everything you read”.

This is certainly true in the rash of articles and posts from media outlets far and wide reporting that motion picture theatrical box office in China during the month of February surpassed that of the United States for the first time ever. While there is no doubt this is true numerically, these news stories were designed to foreshadow the not-so-distant day when China will become the number one movie market in the world, ahead of North America, which presently holds the title. Industry pundits can’t help themselves in writing about every minute step toward this inevitability in their desire to be the first to report when it occurs.

Yet one must look a little deeper than the actual February grosses to understand whether the news is at all significant. There’s an old adage instructing us just how to examine such reports; “Read between the lines”.

For some time now media outlets, specifically trade publications, have been juggling the variables used to report on box office receipts. This leads to a form of what I like to refer to as of “selective exaggeration”. Examples are easy to spot and will usually read something along the lines of, “The debut of ‘Big Blockbuster 2′ sets a new record for the opening of a comedy featuring a talking teddy bear opposite a female lead when bowing on an even numbered Friday on an odd number of screens in November”. These new records take so many categories into account it seems one might have a better shot at a black jack table in Macau than they do of ever coming across a release with comparable attributes.

What many of the news stories about China’s box office triumph did not cover was that February is one of the months with the country’s highest movie attendance thanks to the Lunar New Year holiday. Last February Chinese box office amounted to CNY ¥3.04 billion (USD $482.6 million), compared to CNY ¥4.07 billion (USD $650 million) last month. That’s a noteworthy increase of 35%, keeping the country on track with the 36% growth seen in 2014. The first day of Lunar New Year alone set single-day ticket sales record in China, with theatres raking in CNY ¥360 million (USD $48.9 million), according to the State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT) which tracks such statistics.

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EAO Releases European 2014 Cinema Statistics – Up, But Not Much

EAO Cinema Figures Europe 2014

A week after cinema trade body UNIC released its provisional European Cinema going figures for 2014, the European Audiovisual Observatory (EAO) has released its preliminary cinema figures at the Berlin Film Festival.

The figures show an overall slight upward trend for the EU as a whole, breaking a long pattern of decline, but only slightly and primarily thanks to strong box office in three major territories. Most west European territories reported a decline.

The Observatory estimates that total admissions in the European Union increased marginally by 0.6% to 911 million tickets sold, around 5.4 million more than in 2013 (906 million). The small increase was primarily ensured by a strong year-on-year performance in France and Spain which kept EU admissions from continuing their downward trend of recent years.

As in 2013, two thirds of EU markets experienced a decline in cinema attendance, while admission levels increased in only nine out of the 27 EU territories for which provisional data were available. The year-on-year increase was most pronounced in France (+14.8 million, +7.7%) and Spain (+10.5 million, +13.6%) with cinema attendance in both markets recovering from exceptionally weak results in 2013.

Although both UNIC and EAO figures are provisional, they come to similar conclusions, positing a 0.7% and 0.6% increase respectively for EU countries. UNIC sources its data from UNIC members while EAO data has been “collected with the collaboration of the EFARN (European Film Agency Research Network)” mostly from national film institutes and public audiovisual bodies.

UNIC represents exhibitors and trade bodies in 36 territories, but only published provisional data for 24. It did not yet have data for Belgium, Bulgaria, Cyprus, Greece, Hungary, Iceland, Malta (EAO also not), Montenegro, Macedonia, Romania or Slovenia, for which EAO has provisional data. Neither UNIC nor EAO covers Serbia, Bosnia, Belarus, Ukraine or Moldova. The omission of several Central and Eastern European territories from the UNIC figures misses out on some of the larger growth markets, as noted by EAO:

Apart from France and Spain, year-on-year growth in cinema attendance was only achieved in six Central and Eastern European member states, led by Poland (+11.2%), the Slovak Republic (+10.8%), Romania (+10.5%), Hungary (+8.4%) and the Czech Republic (+4.5%) as well as Belgium (+0.8%).

There were also some minor discrepancies between UNIC and EAO data for some contries reported by both, notably Germany, though this had to do with FFA only releasing its data on 9 February. For Sweden, for example, UNIC has +0.8% growth in BO but -1.7% decline in admissions, whereas EAO has +0.5% BO and -1.9% admissions. There is also a larger discrepancy when it comes to Russia’s BO and admissions, which UNIC sees as stronger than EOA does.

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UNIC 2014 European Cinema Statistics – It’s a Funny Thing

UNIC European BO 2014

The legendary Speaker of the US House of Representative Tip O’Neil famously said that “all politics is local.” The same can be said for European cinema statistics.

With US in the doldrums and China booming in 2014, the just released UNIC Update on Cinema Exhibition in 2014 highlights a fragmented continent and mixed fortunes at the box office. Not all the data is in yet and the full figures will only be confirmed by UNIC in the spring, but there is enough to make for interesting reading.

As has been the case in recent years, cinema-going across UNIC territories varied significantly in 2014, primarily due to the moderate performance of international films and some very strong local titles in certain countries. Total admissions for EU countries (where data was available) increased by 0,7 per cent compared to 2013, while total admissions for all UNIC territories (incl. EEA, Russia, Turkey) increased by 1,6 per cent.

Where local box office performed strongly in Western Europe it was typically on the back of local comedies, such as France’s “Qu’est-ce qu’on a fait au bon dieu?” and Spain’s “8 Apellidos Vascos”.

However, in Russia, Eastern Europe and Turkey the good box office was the result of a combination of strong domestic titles (all top five titles in Turkey were local films) and the growth in the total number of screens and expansion of the exhibition business as a whole.

French cinema exhibitors – riding on a wave of successful local films – reached beyond the 200 million visitors’ mark and increased admissions by 7,7 per cent. Poland (BO +9,3 per cent/ admissions +11,9 per cent) and Turkey (BO +29,5 per cent / admissions +21,8 per cent) enjoyed equally positive results based on successful local films and have in recent years developed into resilient growth markets. Spain, after enduring consolidation for several years, increased its admissions by 13,6 per cent and box office by 3,0 per cent.

But it many Western European territories even a strong local title like Denmark’s “Fasandræberne” were not enough to lift the markets into positive year-on-year growth territory.

The UK (BO -2,4 per cent / admissions -4,9 per cent) and Germany (BO -4,6 per cent / admissions -6,4 per cent – preliminary figures) experienced decreases in box office and admissions. Several Scandinavian countries also experienced moderate market performance despite some strong local titles (DK: BO -6,3 per cent / admissions -10,6 per cent; FIN: BO -3,3 per cent / admissions -5,1 per cent; NO: BO -1,2 per cent / admissions -6,1 per cent). Italy, due to a comparatively positive year in 2013, experienced a decline in box office (-7,1 per cent) and admissions (-6,1 per cent).

Ireland and UK were telling examples where the success of “Mrs. Brown’s Boy D’Movie” in the former and “The Inbetweeners 2″ during the summer and “Paddington” during the Christmas holiday for the latter were not enough to save the box office from a telling decline.

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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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