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Cinema Facilities: Market Studies and Statistics

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Topics under Movie Theater

Global Cinema & Movie Theater Industry Analysis 

The global movie theater and cinema industry is a segment of the movie & video distribution sector and refers to establishments providing video movies and screen films. Such venues include video theaters, auditoriums, cinemas, open-air movie theaters, and other establishments that screen films or video movies to the paying public. These venues can be of various types from small-scale, single-screen independent outfits, to chain operators or large multi-screen multiplexes.

A large percentage of the revenue generated from ticket sales is collected by the production companies, and so movie theaters make their profit for the most part in concession sales, which represent their main revenue. Movie screening establishments can also generate revenue through advertisements prior to the feature screening, arcade rooms, and cinema pubs or cafes serving snacks and beverages.

Current Challenges

The global movie theater and cinema industry is being forced to deal with certain obstacles to market growth such as a difficult economic climate due to the financial crisis, and consumer behavior trends impacted by rising prices of movie tickets and gasoline. Movie ticket prices have been climbing over recent years, partly due to the higher number of premium-priced 3-D movies produced.

Consumers discouraged by these high ticket prices and looking to cut corners in the household budget by avoiding unnecessary trips to use less gasoline tend to opt for alternative forms of entertainment, such as video games and Netflix streaming. Baby boomers in particular are attending movie theaters and cinemas less frequently than in the past.

Regional Market Share

India’s cinema exhibition market is recording 10% yearly growth, according to research from NetScribes. Multiplexes are fuelling market growth, with the rising rate of urbanization leading to the construction of more and more multiplexes across urban centers as well as in second and third tier cities. Growth in the sector has also been favorably impacted by tax exemptions, demographics, rising availability of organized retail space and venues such as shopping malls encouraging consumer spending on recreation. Obstacles to movie theater market growth in India’s include alternative modes of entertainment, piracy, entertainment tax exemption uncertainty, having to vie with DTH operators for market share and development delays. Ticket prices vary within the industry depending on the season any particular film is screened in, climbing average ticket prices, shorter movie shelf life in general, where any particular multiplex is located and low screen density. Trends within the Indian movie theater and cinema industry include new single screen theatre formats, transition to digital and 3D cinema, alternate modes of revenues, and PE/VC investments in the multiplex market segment. Multiplex operators dominate the market and the single screen cinema market segment is characterized by fragmentation.

IBIS World research estimates the US movie theater industry’s value at $13 billion, with yearly growth of around -1%. 2011 saw the four leading names in the market generate 56% of overall revenue, with operator consolidation playing a large role. The industry’s level of concentration has risen by 10% over the past five years due to established operators snapping up small and large operators, following completion of Chapter 11 proceedings. AMC, for example merged with Loews Entertainment in 2006. In the same year Cinemark acquired Century Theaters, adding close to 80 theaters with close to 1,000 screens combined spanning 12 western states. The AMC-Loews Entertainment merger represented more than 400 theaters with almost 7,000 screens combined, spanning more than 10 countries, employing 24,000 people and attracting 250 million movie fans yearly.

US cinemagoers are paying record ticket prices, reaching an average of close to $8 in 2010, after a 5% year-on-year increase, according to research figures compiled by the National Association of Theater Owners. Ticket prices are rising mostly due to 3D movie screenings, which mean surcharges of between $2.50 and $4 on every ticket. The Los Angeles Times estimates that the rising popularity of 3D movies has led to the segment generating 20% of box-office revenue.

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Related industries: DVD, Blu Ray, VOD

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