According to the annual Theatrical Market Statistics Report for 2014 by the Motion Picture Association of America, Inc. (MPAA) released yesterday, the global box office increased by 1% to a new record of $36.4 billion. Domestic (U.S./Canada) dropped by 5% at $10.4 billion. The Asia Pacific region was up by 12% overall, whereas China’s total of $4.8 billion (first international market to exceed $4 billion) was up a huge 34%, which alone improved the combined global total. Latin America box office increased 2% (but is up 46% from 2010) to $3 billion, Europe, Middle East & Africa (EMEA) decreased 3% ($10.9 to $10.6 billion) from 2013, due to decreases in larger European markets such as Germany (-7%) and the U.K. (-1%).
As far as the infrastructure, total cinema screens increased 6% worldwide in 2014 to over 142,000, due in large part to continued double digit growth in the Asia Pacific region (+15%) now accounting for more than 47.3 thousand screens against 43.2 in US/Canada, 40.4 in EMEA, 11.2 in Latin America. 90% of the world’s cinema screens are now digital, up 7 percentage points from 2013 (83%), 51% (47% in 2013) of which are 3D. In particular, in the US, the majority of screens (84%) are located at venues with 8 or more screens. The number of screens at venues with seven or fewer screens continued to decline, despite an overall increase in the number of screens.
Looking at moviegoing in the domestic market, what is particularly worrying is the drop of admissions: tickets sold (1.27 billion), and average tickets sold per person (3.7) both declined by 6% in 2014 in US and Canada, which is the lowest level in many decades, while the average cinema ticket price increased by only 4 cents (less than 1%) in 2014, less than the rate of inflation in the economy.
Going more in depth, 229.7 million people (68% of of the U.S./Canada population aged 2+, 52% female and 48% male) went to a movie at the cinema at least once in 2014 (“moviegoer”):
- the typical moviegoer bought 5.5 tickets over the course of the year (down from 5.9 tickets in 2013);
- frequent moviegoers (once a month or more) are 11% of the population but accounts for 51% of all tickets sold, a 1.2 million and 3% increase from 2013;
- the number of frequent moviegoers increased (40-49 and 60+) or remained flat (50-59) among 40+ age groups, but fell or remained constant for younger age groups, including the largest frequent-moviegoing age groups (18-24 year olds and 25-39 year olds are 1.7 and 2.7 million less respectively within the last two years);
- per capita attendance declined for all age groups under the age of 40, increased for 40-49 year olds (3.6) and 50-59 year olds (3.1), which also had their share of tickets sold at all times high and remained flat for 60+ year olds compared to 2013, even though the 12-17 year old age group (6.4) had the highest per capita attendance, followed by 18-24 year olds (6.2);
- despite a decline in 2014, Hispanics especially continuing to oversample in tickets sold versus their proportion of the population, while Caucasian and Asian/Other frequent moviegoers increased in 2014 compared to 2013;
- over two-thirds of all frequent moviegoers (73%) own at least four different types of key technology products, compared to 55% of the total adult population;
- California and Texas had more moviegoers and the largest number of frequent moviegoers (5.9 and 4.1 million, respectively).
Other key trends to keep in mind:
- 3D is less appealing than ever but highest grossing films are released also in 3D. The percentage of the population who were 3D moviegoers in 2014 fell for all age groups, with larger declines for age groups below 40 years old and the format comprising 14% of the overall box office, however 9 of the top 10 and 15 of the top 25 films were released in 3D.
- More theatrical releases. Films released in theaters by MPAA member studios increased for the first time in five years, reaching 136 in 2014, a +19% compared to 2013. Total films released and films by non-MPAA member studios also increased from 2013 (up to 707 or 7% and to 571 or 5%, respectively), higher than any other year in the last decade.
- PG-13 films comprised 14 of the top 25 films in release during 2014.
- Total film produced for theatrical release with a budget of $1 million or higher were 481 (+6%), of which 110 (+4% were MPAA member studio films.
- Among the top five grossing films in 2014, Guardians Of The Galaxy, Captain America: The Winter Solider, The Lego Movie (which earned 64% of box office revenue from Caucasian audiences) and Transformers: Age Of Extinction (which drew the most ethnically diverse audience) all attracted majority male audiences. The Hunger Games: Mockingjay Part 1 showed the strongest female attendance of the top 5 films, with 57% of the film’s box office revenue coming from women.
Let’s try to sum everything up.
Compared to the previous year, in 2014 the Asian gross box office increase has offset the decline in US/Canada and Europe resulting in a slight global overall growth. Furthermore, there are now more screens, more concentrated in multiplexes and more digital, and more films were released theatrically, despite domestically considerably less tickets were sold on average, to an older audience and the frequent moviegoers (who are also tech-savvy) now totally sustain the market purchasing the majority of the tickets. The highest grossing films are rated PG-13, released also in 3D and attracted male audiences mainly, deviating slightly from the general moviegoers population. Hispanics are more likely than any other ethnic group to purchase movie tickets, while California, Texas and Florida are the most receptive states.
All in all, it looks like the movie theater is becoming, partially due to competition from other forms of entertainment primarily digital VOD, something appealing to a narrower (32% of the population did not go to the movies at all) and older target population of frequent moviegoers, with more films being released in theaters for less time, while China’s growing appetite for American movies comes at a welcome time for the industry.
There is certainly at this point a need for US distributors and exhibitors to analyze these data carefully and come up with new concepts, strategies and business models for keeping up with the demands of their actual and potential moviegoers. Starting from understanding how to adapt to the digital challenge.