CMG's Annual Report on Today's Cinema

The 'Industry's' Condition

The production and distribution of motion pictures and television programing is one of our nation's most important and valuable cultural and economic resources - bar none.  The 'industry' supports over 1.9 million domestic jobs that will pay out over $110 billion in wages for 2013 - with an average salary of  $84,000 (75% above the average salary nationwide).

The 'industry' supports over 108,000 businesses located in every state in the country, and is one of the most highly competitive around the world - one of the few industries that consistently generates a positive balance of trade in very country where it operates.  In fact, the 'industry's' trade surplus is larger than each of the surpluses in the telecommunications, management and consulting, legal, medical, computer, and insurance services sectors - and should exceed $18 billion this year.

Global Box Office

The worldwide cinema box office for 2012 totaled $34.7 billion, of which, $10.8 was domestic (U.S. and Canada) and $23.9 billion international. As expected, the Chinese box office experienced the most growth (36% at $2.7 billion) and became the largest international market, surpassing Japan.

The international market is where the growth for cinema will continue. Over the last five years the international market has grown by 32%  while the domestic box office grew by 13%. I anticipate that the international box office (currently making up 69% of the total) will continue to accelerate and by decade's end be at 75% of the total.

The top five international box office markets for 2012 were: China - $2.7b, Japan - $2.4b, United Kingdom - $1.7b, France - $1.7b, India - $1.4b.  Globally there are approximately 130,000 cinema screens of which 42,803 are located in the U.S. and Canada (33%).

Domestic Market (U.S. & Canada)

Domestically, admissions reached 1.36 billion (or 4.1 per capita) for 2012 and it is anticipated that 2013 will exceed that figure by 3-4% due solely to increased attendance, as average ticket prices remain static.  Over 225 million people went to the movies last year, about 68% of the population, with broader demographic shares remaining constant. Notable exceptions are 12-24 year olds and Hispanics, which continue to oversample in moviegoing vs. other groups.

The admission price for a family of four averaged $31.84 last year exclusive of concessions, well below the cost of other out-of-home entertainment. Average cost for a family of four attending an NFL Game - $313.52, NHL Game - $244.04, NBA Game - $208.96, Theme Park -$199.00.

Demographically moviegoers can be grouped by age or ethnicity. For 2012, 61% of moviegoers fell into the 12-39 age group, with 25-39 year olds representing the largest group with 25% of total admissions. Ethnically, Caucasians (as would be expected) make up the largest group of moviegoers with 56% of the total. However, Hispanics were at 29% (much greater than their share relative to the overall population), while in contract, African Americans only accounted for 1% of moviegoers. Gender wise, female admissions totaled 51% vs. 49% for males.

There were 677 movies released by Hollywood last year of which 36 were in 3D format (down from 45 in 2011). As in the past, the box office is skewed toward the high-impact, action movie. The top 25 movies (3.7% of movies released) totaled $5.37 billion or 49% of the total box office gross, with the top 5 films (The Avengers, Dark Knight Rises, Hunger Games, Skyfall, and Twilight: Breaking Dawn II) grossing $2.1 billion or 19% of the total.

Summary

I expect the trends to continue. Globally, Hollywood has a very bright future as the demand for expensive, well marketed super-hero and action films will remain strong as more cinemas are built, particularly in the Asia/Pacific region. Domestically, the box office will remain strong and steady even in the face of more competition from the internet and in-home entertainment sources.

Jim Lavorato