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1 IHS TECHNOLOGY Cinema Intelligence Service September 2016 Insight Report technology.ihs.com Global box office continues to post gains over 2015 s record level in first half 2016 Charlotte Jones, Prinicpal Analyst China sold more cinema tickets than North America for the first time Argentina recorded the largest rise in local currency box office ahead of China Healthy 9.1% uplift in cinema attendance during H Total cinema admissions across 20 territories (where data is available) hit 2.24 billion in the first six months of the year equating to a healthy 9.1% rise on the same total in 2015, an impressive result considering 2015 was itself a record year. In particular, seven territories stood out with double digital increases including China, Argentina, Romania and Italy. The overall positive rise in cinema admissions during the first six months was at least partially mitigated by slight declines in five territories (including the major markets of UK and North America) and where the largest drop was recorded by Germany. Territories covered North America, China, Argentina, Norway, Germany, Russia, Colombia, Czech Republic, France, UK, Turkey, South Korea, Australia. Company News Corp (Fox) Disney NBC Universal (Comcast) Symbol NWSA DIS CMCSA Total world box office climbed 6.2% to hit $14.4 billion in US dollar values. The year has been dominated by high profile Studio titles continuing the strong theme from 2015 s record year. In fact, the top ten films of the year to date accounted for 41% of total box office (to late August 2016). This can be further exemplified by the fact seven titles have already grossed over $300m in 2016 to date compared with just three in full year The growing proportion of titles finishing in the top box office tier has, however, come at the expense of the middle ground, with a dearth of titles grossing over $150m as well as a fair few titles failing to reach their potential in In North America, box office registered a 2.3% dip from January to June according to boxofficemojo, which can be further broken down as a 12.4% gain in Q1 mitigated by a 9.2% drop in Q2. The highest grossing month was June with 1.09 billion tickets sold, but representing an 11.9% dip on June The year-to-date tally has since rallied to a 5.1% increase as at late August, itself aided by ongoing ticket price inflation based on the expansion of various premium cinema tiers. The top ten grossing titles of 2016-to-date include three animations led by Disney s Finding Dory, also the most popular title on $478m and with Fox s (DWA) Kung Fu Panda standing just outside the top ten. IHS TECHNOLOGY COPYRIGHT NOTICE AND DISCLAIMER. For internal use of IHS clients only. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions and analyses that are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage, or expense incurred by reliance on information or any statement contained herein. In particular, please note that no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, forecasts, estimates, or assumptions, and, due to various risks and uncertainties, actual events and results may differ materially from forecasts and statements of belief noted herein. This report is not to be construed as legal or financial advice, and use of or reliance on any information in this publication is entirely at client s own risk. IHS and the IHS logo are trademarks of IHS.
2 The Chinese box office registered another buoyant period, with H1 admissions increasing by approximately 29.5% to 722.9m up from 555m in H in turn almost doubling the 374.7m recorded in H (based on data from Entgroup). The total admissions tally in China also exceeded that of North America for the first time, underling the meteoric rise of the Chinese theatrical market. The total percentage uplift however, does represent a slowdown in growth (although still positive) from a much larger 51.0% increase for the same period in The year to date admissions surplus has also taken a further hit following a quiet July The softening of the growth rate is also more noticeable in revenue terms recording a 21.4% uplift in box office revenue terms to yuan 24.5 billion. The continued expansion of screens out to lower tiered cities partially explains the discrepancy as these tend to have different cultural tastes favouring local movies as well as different pricing structures. In 2016, local Chinese hit title The Mermaid became the first title to gross over $500m at the Chinese box office and in doing so eclipsed two previous records set in 2015 for Monster Hunt as the most successful local title of all time and Universal s Furious 7, as the then most successful title of all time. In 2015, there were seven titles which grossed over $200m at the Chinese box office, and to date only three have made that grade so far in 2016, which may go some way to explaining the softening of the growth rate as the market becomes more title driven. Italy was second ranked in terms of admissions uplift, rising 14.0% to 59.3 million, according to data from ANEC. For Italy, this is the highest first half tally from some years, and slightly ahead of the total in 2010, the record year still to beat in the territory. Local films accounted for a very healthy 37% of the total led by the Medusa title Quo vado? released back in January. Other territories in Western Europe also registered a strong first half including Spain (10%), Sweden (9.6%) and France (5.5%). However, there were also negative results in two major territories namely UK (-4.8%) and Germany (-13.9%). For Germany, the decline was also the largest of all the international territories analysed here. The fall came despite positive associations of other industry markers including a first half high for 3D admissions as a share of total (22%) plus market share of local titles was also on a par with the previous year. In Norway, total admissions surged 12.7% to 5.8 million compared with the same period in 2015 and potentially put the territory on track for a record 13 million in full year The uplift as the third largest globally has been attributed to the success of high profile US blockbusters rather than a stand out local hit. In Eastern Europe, there were positive gains posted in all four territories analysed here led by 12.0% in Czech Republic, and closely followed by the 11.6% rise in Romania, 9.6% in Poland and 9.0% in Russia. The continued strong performance of US franchise titles in 2016 appears to be the common factor throughout the region. In Russia, local films maintained a 23% share of the total box office (from 22% the previous year) as local title The Crew finished third overall behind both Zootopia and Deadpool. Mexico was fourth ranked on an incremental attendance basis; a total of 167m tickets were sold, up 12.1% on 2015 s respective total. Box office revenue rose by a lesser 6.2% to pesos 7,632 million, due to ticket price deflation. The driver of growing attendance continues to be new screens springing up although local films claimed 7.5% of the total box office during the period from 37 film releases, up from a 5.7% market share in full year Colombia and Argentina posted higher admissions over 2015 with 6.2% and 5.0% gains respectively. For Argentina, the territory is on track to record a new high after breaking the 50m barrier for the first time in At the same time, the very high levels of inflation continued into 2016 as box office in local currency reported a larger 34.3% hike to pesos 2.0 billion. South Korea was one of five territories to record a deficit in the admissions tally during the first six months of 2016 with a 0.5% drop to 94.6 million tickets sold. Conversely revenues rose 6.9% to $732.7m due to ticket price inflation. In Asia, Hong Kong recorded a 3.6% rise in box office to HK$ 1,020 million. Hollywood was the driving force with eight tentpole titles in the top ten overall. The leading title was Captain America: Civil War, although The Mermaid (regarded as local origin) also featured in the top ten overall. 2
3 In Australia, total box office from January to July rose by a healthy 4.6% to A$654.5 million according to data received by the Motion Picture Distributors Association of Australia. The 2016 increase is more impressive still considering the large 14.9% rise in total ticket sales for The increase therefore continues the pattern of growth for the Australian market for a second consecutive year following the previous period of negative growth rates some years prior. Box office revenue H ranked by % change Argentina China Sweden Romania Italy Czech Republic Colombia Russia Mexico Australia Hong Kong Portugal North America South Korea Switzerland Turkey UK Germany Source: IHS Cinema admissions H ranked by % change China Italy Norway Mexico Czech Republic Romania Spain Sweden Poland Russia Colombia France Argentina Portugal Switzerland South Korea North America UK Turkey Germany -20 Source: IHS 3
4 H1 cinema admissions % change France 000s 101, , Germany 000s 66,800 57, UK 000s 83,138 79, Italy 000s 51,265 58, Spain 000s 40,000 44, Portugal 000s 6,598 6, Norway 000s 5,148 5, Sweden 000s 7,952 8, Switzerland 000s 7,063 7, Czech Republic 000s 6,332 7, Poland 000s 21,540 23, Romania 000s 5,450 6, Russia 000s 102, , Turkey 000s 34,165 31, North America 000s 659, , Mexico 000s 149, , Argentina 000s 24,947 26, Colombia 000s 30,398 32, China 000s 556, , South Korea 000s 95,070 94, Total 2,055,347 2,241, Note: USA estimated based on average prices Source: IHS from national film bodies H1 box office revenue 2016 (local currency) local % change Germany Euro m UK m Italy Euro m Portugal Euro m Switzerland Eur m Sweden Skr m Romania Lev m Czech Republic Ckr m Turkey Lira m Russia Ruble m 26, , North America $ m 5, , Mexico peso m 7, , Argentina peso m 1, , Colombia peso m 258, , Australia A $m China Yuan m 20, , South Korea won m 762, , Hong Kong HK$ m , Source: IHS from national film bodies 4
5 H1 box office revenue 2016 ($) local % change Germany $ m UK $ m Italy $ m Portugal $ m Switzerland $ m Sweden $ m Romania $ m Czech Republic $ m Russia $ m Turkey $ m North America $ m 5, , Mexico $ m Argentina $ m Colombia $ m Australia $ m China $ m 3, , South Korea $ m Hong Kong $ m Total $ m 13,597 14, Note: Data based on 2015 average annual exchange rates Source: IHS from national film bodies 5
6 IHS Customer Care: Americas: IHS CARE ( ) Europe, Middle East, and Africa: +44 (0) Asia and the Pacific Rim:
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