Tag Archives: Box Office

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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Chinese Box Office Growth Driven by Women and Millennials

Tiny times 3

The China Film Association and other units launched the “2014 Chinese Film Art Report” and “2014 China Film Industry Report” earlier this week in Beijing.

The reports analyse cinema consumption patterns of domestic Chinese films and finds that they are primarily driven by females, Millennials and repeat viewing, with an astonishing per head spending of several hundred dollars per month at the multiplex. The reports also worries about the “shallow” themes of some of the most popular Chinese films.

With foreign (mainly Hollywood) films restricted in the Mainland market under the 20+14 quota, China’s cinema growth is taking place mainly on the back of domestic films. The government is keen to encourage this growth, which is why it is focusing research efforts on understanding cinema consumption patterns.

These two reports look at 2013 releases, which totalled 311 movies, of which 250 were domestic films(1) and 61 foreign films(2). Out of these 219 were categorized as genre films, such as comedy, romance, and action films, while 31 were categorized as “non-genre”.

It notes that out of 59 films that earned more than one billion yuan at the box office 32 were domestic, with domestic films accounting for 58% of overall takings, the highest number ever for Chinese cinemas.

‘A Great Leap Backward’

The report and articles about it seize upon the youth focus and themes of the most successful films.

It is noteworthy that the themes about the current urban population of the urban youth film themes of love and youth, grow up to become a dark horse, and rescue. The higher box office films “To Youth”, “Tiny Times”, “Chinese Partner,” “Break the Contract”, “That Was Stolen Five Years”, etc., all have a youthful theme. But the report notes that, while a good number of youth films, many of the movie lacks intrinsic emotional power and creative artistic qualities, and themes of these films focus on youth and substance, youth and love, youth and nostalgia, but lack a richer ambiguity.

The article goes on to lambast the “speculative mentality prevailing” in many youth films with the highest market share, saying “the youth theme of this bonanza is shallow excessive consumption.” The sentiment is perhaps understandable as even western media has latched onto what makes films such as “Tiny Times 3″ so popular.

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Here is for example what the BBC had to say about it:

Tiny Times couldn’t be further from Mao’s ascetic communism: it is a wholesale celebration of conspicuous consumption and materialism that has been described as a cross between Sex and the City and The Devil Wears Prada.

The series follows four attractive, fashion-obsessed young women in Shanghai: Lily, Ruby, Lin and Nan Xiang. It chronicles their lives and romances. The actresses look perfect – nicely groomed and slim. There are constant references to sports cars and expensive brands such as Prada and Gucci. The characters are often in opulent surroundings as they enter into relationships with handsome, well-dressed men.

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Daily Cinema Digest – Thursday 24 July 2014

Sex Tape header

The summer isn’t over but already it seems that last rites and post-mortem are being performed on what has been a disappointing box office season, at least in the US. Thank goodness there is China and other emerging markets to cheer up Hollywood, though this is cold comfort for US-based exhibitors. Apparently its men’s fault for staying away in droves.

Less than six weeks before Labor Day, hopes for recovery at the North American summer box office have evaporated. The season is expected to finish down 15 to 20 percent compared with 2013, the worst year-over-year decline in three decades, and revenue will struggle to crack $4 billion, which hasn’t happened in eight years. As a result, analysts predict that the full year is facing a deficit of 4 to 5 percent.

And

Although there have been no Lone Ranger-size debacles, for the first time since 2001 no summer pic will cross $300 million domestically (X-Men: Days of Future Past, Maleficent and Transformers: Age of Extinction hover near $230 million). May kicked off with The Amazing Spider-Man 2 earning $200 million less domestically than 2013′s Iron Man 3; by July 20, the divide had swelled to nearly $690 million as revenue topped out at $2.71 billion, down 20 percent compared with the same period last year.  LINK

Could it be partly because US ticket prices are up compared to Q1 this year (but down compared to Q4’13)?

The average cost of going to the cinema in the U.S. rose to $8.33 in the second quarter of 2014 as the summer season kicked into high gear, according to the National Association of Theater Owners.

That’s up from $7.96 in the first quarter of the year, when there were fewer 3D tentpoles.
However, it was notably down from the second quarter of 2013, when the average movie ticket price clocked in at $8.38 (the reason for the year-over-year decline could include fewer 3D tickets being bought overall as the appetite for the format wanes).  LINK

 Screen Australia chief executive Graeme Mason

Australia - Federal budget cuts means that Screen Australia has to cut staff by one-tenth and decrease funding for cinema-related projects.

Chief executive Graeme Mason has announced plans to save more than $5 million this financial year, including up to $3 million in development and production investment and another $1 million by cutting staff from 112 to 100.

Faced with a $38 million cut over four years in the May budget, Screen Australia will also reduce what it spends to help a film’s cinema release – so-called ”print and advertising” support – and end direct funding of such industry training organisations as Sydney’s Metro Screen, Melbourne’s Open Channel and Adelaide’s Media Resource Centre.  LINK

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Daily Cinema Digest – Monday 21 July 2014

dcinex logo

EVS is getting out of the digital cinema business (almost). Having launched a digital cinema server business and set up integrator XDC (later renamed dcinex) almost 15 years ago, the manufacturer is returning its focus to its core broadcast equipment business.

No need for lengthy analysis, other than to note that EVS probably held off longer than it wanted too, isn’t seeing very much return on its overall investment and will not quite be rid of the digital cinema connection until it disposes its newly gained Ymagis shares and bonds. The press release tells us that:

Under the agreement, EVS will receive at the closing:

  • EUR 2.1 million in cash
  • 288,851 new Ymagis shares
  • EUR 6.4 million in Ymagis bonds, which have a maximum maturity of 5 years. These bonds are associated with warrants.
  • In total, the approximate aggregate value of the different components (at last closing Ymagis share price of EUR 7.90) represents around EUR 10.8 million for EVS. On March 31, 2014 dcinex was valued at EUR 7.9 million on the EVS balance sheet.

In addition, dcinex will reimburse the currently existing shareholders’ loans. Today, the loan granted by EVS (including interests) amounts to EUR 1.5 million.  LINK

With digital cinema deployment coming to and end in western Europe (still some mopping up in southerns and eastern Europe), Ymagis can now focus on being a pure service company. Given that digital cinema is a small market with tight margins we should expect yet more consolidation.

Cineworld Ashford Kent

Cineworld has introduced allocated seating in UK, which has lead to confusion and criticism from some customers. A poll of 2,000 readers of a local paper in Kent saw 67% vote ‘NO’ to the allocated seating policy and some customers are threatening to cancel their Cineworld Unlimited. The multiplex chain is alone amongst the major operators in the UK in offering a monthly card allowing unlimited* movie viewing.

Critics said problems with the new system include confusion over row and seat numbers, people ignoring rules, arguments and problems with booking tickets online and the website crashing. Yesterday, KentOnline revealed an argument had broken out during a screening of Mrs Brown’s Boys D’Movie in Ashford when a group of five sat in the seats booked by other customers. Little Burton resident Kirsty Poynton said the beginning of the film was interrupted due to the disagreement. She said: “There was an argument between a large group of people at the screening.  LINK

But Cineworld is standing its ground with the new policy and a spokesperson quoted as saying, “The decision to introduce allocated seating was made following extensive consultation with cinema users. Whilst we recognise this has not been a popular decision with some customers, the overall and majority of feedback from customers visiting our cinemas has been positive.” (*Terms and Conditions apply – of course). Read More »

Daily Cinema Digest – Monday 7 July 2014

Lotte Super Plex G Is The World's Largest Cinema Screen

What is the largest cinema screen in the world? According to Guinness World Records it is now in the tallest building in South Korea. So that’s officially official.

The screen of the multiplex cinema which will open at the Lotte Cinema World Tower, boasts its unparalleled size in the industry: With 622 seats — the largest available number of seats for a screen, the Super Plex G is an ultra large theater which looks like a two-storey opera theater in appearance. In its 34 meters wide and 13.8 meter long screen, 34 adults can lie on it together.

On July 3, a special ceremony was held to commemorate the recognition of the largest screen “Super Plex G” at Lotte Cinema World Tower by the Guinness World Records that confirmed the huge screen has been qualified as the world’s officially biggest screen. LINK

USA: THR asks what is behind the underperforming summer box office in North America, which is down nearly 20% up to the 4th of July holiday. Underperforming titles seem the culprit and no blame apportioned to World Cup (unlike Europe and Latin America).

What’s behind the summer drought? Hollywood studio executives and box office observers blame a lack of mega-grossing tentpoles, a dearth of doubles and triples and no huge animated family film. In other words, a number of films have underwhelmed (or bombed), including Fourth of July R-rated comedy Tammy, which posted a five-day debut of $32.9 million, Melissa McCarthy’s lowest recent opening (as a way of comparison, fellow R-rated comedy Neighbors launched to nearly $50 million in May).

Revenue for Fourth of July weekend hit only $130 million, down 44 percent from last year’s $229.8 million haul. Granted, the holiday fell on a Friday this year, a disadvantage, but revenue managed to reach $160.2 million in 2008, the last time the Fourth was a Friday. One reason for the dramatic downturn is that no big tentpole rolled out, probably because no one wanted to open in the wake of Transformers: Age of Extinction, which debuted June 27. 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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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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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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Dissecting Google’s Box Office Prediction Study

Google's Comparison of 2012 Box Office Index and Film-Related Search Index

Predicting box office receipts for a motion picture release, whether for opening weekend or an entire theatrical run, is anything but an exact science. Leave it to the good folks at Google, those lords of the algorithm, to rely on math rather than fuzzy logic when coming up with a better formula for “tracking”, as the practice of box office prognostication is often referred. Last Thursday Google released a white paper titled “Quantifying Movie Magic with Google Search” which claims it can predict box office grosses for movies four weeks before their release with 94% accuracy.

As a white paper, the document does its job rather effectively and can hardly be faulted; it favorably promotes Google’s products and services through the use of carefully chosen facts and statistics, all in the guise of a well researched report. Its publication served its promotional purpose with industry and technology publications regurgitating Google’s findings in their own reporting. Few, if any, media outlets took the time to read between the lines and highlight the facts being presented from a more circumspect position. That is my intention here.

Don’t get me wrong, adding the kind of user behavior data Google has at its finger tips should most certainly make predicting box office far more accurate. Rather, I would suggest that Google’s narrow study conveniently produced complimentary results that most industry professionals already know or would rightly assume. In Google’s defense, it is their job to continue reminding potential users and customers of its value, even if certain facts can be deduced via common sense and observing overall consumer trends.

For instance, Google states that searching online for information about movies has increased by 56% from 2011 to 2012. We have to take their percentage at face value, but frankly it doesn’t really matter. Of course more moviegoers are searching for info online; (1) newspapers and magazines are disappearing by the day as their subscribers flock to the Internet so there are fewer and fewer places to look up showtimes and reviews, (2) more-and-more people have become Internet users in the same time period, and (3) an influx of smartphones means that more consumers can search for movie information while on-the-go, even if they don’t have a computer at home. Put another way… it’s a big no duh.

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New Yorker Magazine Measures Movie Franchise Profitability

New Yorker Movie Franchise Profitability Infographic

Take a look at the release schedule this summer and you might begin to notice a trend; “Hangover III”, “Iron Man 3″, “Star Trek Into Darkness”, “Monsters University”, “Grown Ups 2″, “Despicable Me 2″ “RED 2″, etc. The number of sequels being pumped out by Hollywood studios is staggering. However are any of these franchises actually profitable?

Last week the New Yorker took a stab at answering that question by publishing an interactive info graphic which displays the financial results of each individual film in 26 different movie franchises. By using adjusted total ticket sales, the magazine was able to compare each franchise by the adjusted gross of each title in the series. As the New Yorker writes

“…with an eye to the bottom line, we created a third ranking that takes a basic view of profitability by calculating the franchise gross as a percentage of the adjusted budge…”

That means visitors can shuffle the order of titles within each franchise, as well as the franchises themselves by gross, per-movie-gross and profitability. This exercise provided answers to age old questions such as whether “Star Wars” or “Star Trek” has earned more.

Have a whack at the chart for yourself and see what lessons you can learn.