It's always revealing to parse the Motion Picture Association of America's annual Theatrical Market Statistics Report. The 2011 report (here) shows that the studios are basically getting bailed out by the international boost in moviegoers, while the domestic market is in steady decline. And the bloom is off the 3-D rose; 3-D numbers are down from 2010, when 3-D "Avatar" continued to draw fans. 2011 box office receipts for all films released around the world reached $32.6 billion, an increase of 3% over 2010. Each international region grew its box office with a mix of homegrown and Hollywood product.
The U.S./Canada box office market finished at $10.2 billion, down 4% compared to last year, but up 6% from 5 years ago. 3-D box office was down $400 million in 2011 in comparison to 2010. 2-D box office remained consistent from 2010 to 2011.
Needless to say, Senator Chris Dodd, Chairman and CEO of the MPAA, in a conference call, stressed the potential for more growth overseas, especially India and China. Most dramatic, China's box office grew by 35% in 2011. Dodd called the U.S.'s new deal with China to loosen restrictions on foreign imports, allowing 14 films a year to play in China, "a done deal" that is "good news for us and good news for them as well. China is building 8 screens a day, 75 IMAX theaters this year alone. They're excited about developing their own product as well as coproductions. They want to produce product for sale nationally and globally. It's a great win for us, indies and studios, and foreign productions."
John Fithian, President of the National Association of Theatre Owners (NATO), added that the international growth is part of an exhibition boom. "They love our American movies," he said. Eight countries had record-breaking years driven by a mix of local and Hollywood product. He stressed that the U.S., by comparison, was a more mature, up-and-down, cyclical market. "We needed a few more good movies." He counts "Avatar" and "Alice in Wonderland" as early-year hits not repeated in 2011. "We were down by the end of the year."
Dodd reminded how affordable moviegoing is compared to other forms of entertainment like sports. Frequent moviegoers, half of the population, are steadiest, contributing 50% of the box office. And domestically the most rapidly growing part of our population, Latin Americans, go more often to the movies, seven times a year, than the average moviegoer's less than four. Adults go to the movies more often than younger moviegers, who tend to favor 3-D, while adults over 60 don't go to 3-D movies hardly at all.
With ticket prices slightly higher, admissions still reached their height back in 2002. Fithian stressed long-term gains over the decades--not shown between 2002's box office peak and 2011. Back in the 70s, B.O. attendance was 900 million, said Fithian, the 80s, 1.1 billion; the 90s, 1.3 billion, followed by 1.45 billion. From 2005 to 2011 admissions were flat. 2011 was 1.28 billion, a number Fithian does not expect to see a year from now.
As for 2012, both men cited potential March record-breaker "Hunger Games" ("we're adding screens every minute," said Fithian) and a strong summer slate including "Brave" as promising an attendance uptick. For the first time in ten years all six major studios will do show-and-tells at April's annual theater convention in Las Vegas, CinemaCon. "We're confident for 2012 being an up year domestically and globally," said Dodd. "We think 2012 will recover; it's up 14% year to date with ticket prices stable this year to last. We're confident ticket sales will continue a pattern of growth." (So far in 2012 there has been far more product than last year, which will even out in May.)
Fithian noted that 2012 marks a clear transition point for the conversion from film prints to digital. "We passed the 2/3 domestic mark," he said, "and we're halfway globally. This offers a wider footprint for showing movies in 3-D and greater versatility to show movies in diverse genres to more consumers. Converting technology will help us grow in the near term as we complete this transition." Added Dodd: "Half the world's screens are digital, and 65% in US are, increasing daily."
As for the stresses and strains between studios and exhibitors over VOD: Fithian admitted that last year saw a "public food fight." He says talks are now going on behind closed doors rather than in the media. "We're finding ways to grow the business together and test models in partnership before we roll out radical things," he said." It's about how to grow the pie together."
Dodd explained the 18% decline in the number of MPAA member films produced by noting: "The studios are making larger productions, not getting quantity but larger cost productions. 100 films produce 90% of revenues." Fithian added that while "the studios are producing bigger and fewer films," the bigger films make the best box office returns and the industry as a whole is growing more smaller films. Even exhibitors are getting in the act, with distributor Open Road, backed by theater chains Regal and AMC. And with Summit and Lionsgate's merger, there's a seventh major studio, Fithian suggested. "The studios give us our biggest hits, but we get lots of singles and doubles from others."
GLOBAL BOX OFFICE CLIMB CONTINUES IN 2011
WASHINGTON – The Motion Picture Association of America, Inc. (MPAA) today released its annual Theatrical Market Statistics Report for 2011. The report shows that global box office receipts for all films released around the world reached $32.6 billion, an increase of 3% over 2010, due to ongoing growth of box office in international markets. Each international region experienced box office growth in 2011. Chinese box office grew by 35% in 2011 alone, by far the largest growth in major markets.
“These numbers underscore the impact of movies on the global economy and the vitality of the film-watching experience around the world,” said Senator Chris Dodd, Chairman and CEO of the MPAA. “The bottom line is clear: people in all countries still go to the movies and a trip to the local cinema remains one of the most affordable entertainment options for consumers.”
“The figures on box office reflect only one indicator of an extremely complex, and evolving movie industry,” Dodd said. “We’re working harder and smarter to keep moviegoers coming back for more, whether at the cinema, at home or on the go.”
The U.S./Canada box office market finished at $10.2 billion, down 4% compared to last year, but up 6% from 5 years ago. 3D box office was down $400 million in 2011 in comparison to 2010, which is not surprising given that 2010 included Avatar’s record-breaking 3D box office performance. 2D box office remained consistent from 2010 to 2011.
Cinema ticket sales continue to be fueled by repeated visits by frequent moviegoers – those who go to the movies once a month or more. Frequent moviegoers represent only 10% of the population but purchased half of all tickets sold in 2011.
Globally, cinema screens increased by 3% in 2011. Digital cinema continues its rapid growth so that just over half of the world’s screens are now digital. The number of digital screens in the U.S. nearly doubled in 2011, now comprising 65% of all U.S. screens.
“Global box office continues to grow nicely as new markets develop,” said John Fithian, President of the National Association of Theatre Owners (NATO). “In mature markets such as the United States the business can be more cyclical in the short term, driven by product supply and distribution patterns. In the long term, however, domestic receipts continue to grow. Though 2011 U.S. box office was down 4%, 2012 looks to be another growth year. Box office is up nearly 14% year-to-date so far in 2012, with a strong slate of summer movies coming.”
“Innovation and technology continue to be a driving force for our business,” Dodd said. “People are driven to fill theater seats by the promise of great films and a great, technologically enhanced movie going experience. But online content theft continues to threaten the economic success of our industry – an industry that employs millions of Americans and brings money into the U.S. economy from around the world. We should protect that success, not undermine it by stealing products and cutting the revenue it puts into the U.S. economy.”