The US cinema box office will see sales of over $10 billion by 2006, with the popularity of cinema-going as a leisure activity continuing unabated, according to a new report from cinema analysts Dodona Research.
The US’ box office ticket sales have grown at an average of 5% per year, says the report. This trend looks set to continue over the coming four years. The group also predicts that there will be a 30% improvement in profitability by 2006.
The cinema exhibition industry experienced a series of major bankruptcies in 2000 and 2001 and so the rise in profitability will be welcome news. According to the report, the business failures were the consequence of over-expansion, which spread revenues too thinly and resulted in untenable bank loans. Since 1990 the number of cinema screens has grown at twice the rate of admissions.
Closure have not materialised Despite widespread predictions of screen closures few have yet materialised, says Dodona. Although seven of the largest companies have closed 2,400 screens since 1999, the net reduction in the total number of US screens was just 421 over the same period. “Many non-viable screens are suddenly becoming viable and being reopened by other exhibitors.” said Karsten Grummitt, the report’s author.
Ageing audiences The Moviegoing USA research also shows that the cinema audiences are steadily ageing. Although 16-20 year olds visit the cinema more often on a per capita basis, the 30-39 age group actually accounted for more cinema admissions in 2000 – 220 million compared to 208 million. The same trend is occurring in the UK cinema demographic (see Insight Analysis: British Cinema – Admissions Strong, Profits Weak).
A diverse art Dodona says that contrary to popular wisdom, the market is not showing any evidence of becoming more blockbuster-driven. In fact the box office gross of the top 40 films as a percentage of the total actually declined between 1998 and 2001. As well as being the largest theatrical market in the world, the United States is also one of the most diverse, says the report.
