Market Insight

Admissions rally in leading box office markets, as local films claim top spots

February 03, 2014

Charlotte Jones Charlotte Jones Associate Director – Research and Analysis, Cinema, IHS Markit
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Cinema admissions in select key box office territories recorded strong annual gains in 2013, as the popularity of local films plus, for some territories, lower average ticket prices, had an impact.

Italy

Following two consecutive years of decline, cinema admissions in Italy rebounded with a 6.6 per cent increase to 97.3m in 2013 according to data from Cinetel, which tracks approximately 90 per cent of the market. The relatively strong annual uplift was not matched in revenue terms however as box office rose marginally by 1.4 per cent to Euro 618.4m ($791.4m). The lower rise in box office values was the result of a 4.8 per cent fall in average ticket prices, which was partly due to fewer admissions to higher priced 3D films in 2013, but the average price for 2D was also lower year on year. The proportion of total box office attributable to 3D films hit just 10 per cent in 2013, down from 18 per cent in 2012, even though the number of 3D releases was stable.

The traditional dip during the hot summer months still persists in the territory but 2013 signalled some improvement as total admissions for May, June, July and August rose 33 per cent compared with the same result in 2012. Moreover, the combined total for the four months equated to 22 per cent of the annual box office in 2013, up from a 16 per cent share in 2012. The largest year on year increase in admissions can also be traced back to multiplex sites with between five and seven screens. But admissions for cinemas with one screen, or between two and four screens were actually stable with 2012.

The number of screens converted to digital rose sharply during the year to 73.8 per cent of total screens up from just over half, one year prior, mainly down to thre agreement of a local VPF by distributors. The industry expects a further 400 screens to upgrade over the next couple of months, but there are lingering doubts over funding the upgrade for a number of screens with potential closures mooted. However, the increase in digital screens has also been linked to a substantial increase in the number of new films released in 2013 to 453 from 364 in 2012, or a total of 89 additional films in circulation.

Following the joint industry initiative to release new first run films on Thursdays, admissions rose by 25 per cent on that day of the week, and this is also thought to have helped encourage higher audience attendance overall. Local films also played a strong role in boosting admissions as they accounted for 31.0 per cent of the total up from 26.5 per cent in 2012, but still registering below the most recent high of 38.0 per cent in 2011. There were seven Italian films in the top 20 overall including leading title ‘Sole a Cantelle’ distributed by Medusa Film with 8.0m tickets sold, ahead of Despicable Me 2 with 2.3m tickets sold. The boost in admissions comes in contrast to other European cinema markets which registered an overall drop in ticket sales such as France (-5.2 per cent), Portugal (-9.4 per cent) and the UK (-4.0 per cent).

South Korea

Total film industry revenue in Korea, including box office revenue, film exports and ancillary markets (such as IPTV, DVD sales) reached 1.88 trillion won ($1,669m) in 2013, a new industry record, according to data from KOFIC. Box office revenue, as the major contributor and accounting for 83 per cent of the pie, rose 6.5 per cent to 1.55 trillion won ($1,377m), also a new high. Film exports recorded the largest gain, up 57 per cent to $59m, while ancillary markets also reported a 24.5 per cent increase to $246.2m.

Cinema admissions were 9.5 per cent higher year on year with 213.5m tickets sold, which was again a new recent high and helped push the level of average cinemagoing per capita well over the four times average frequency for 2013 (4.37 average per head). The admissions increase was notably strong in 2013, and follows similarl healthy 22 per cent and eight per cent increases in 2012 and 2011 respectively. As a result the total market has risen by just under one third since 2010 with an additional 66.5m tickets sold in 2013 (over 2010). Admissions also recorded a larger uplift than in box office revenue terms, but that was due to a decline in average prices (down 2.7 per cent) marking the third consecutive year of ticket price deflation in the territory.

3D as a proportion of the total box office is typically lower than average in South Korea compared with other international territories but 2013’s share dropped further still. As a result, 3D accounted for 5.8 per cent of revenues or just 3.5 per of total attendance, a very low proportion relative to the rest of the world.

Local films were again a positive influence accounting for 59.7 per cent of total box office, which was stable on the previous year (58.8 per cent). Hollywood films, meanwhile, accounted for 36 per cent of the market with the remaining 4.6 per cent derived from other international films. A total of nine of the top ten films of the year were Korean, led by Miracle in Cell No.7 which grossed 91.4bn won, as the third most successful local film of all time.

Russia

Total cinema admissions rose 9.7 per cent to 187.6m in Russia in 2013, recovering from the small 1.2 per cent drop the previous year. Total box office revenue increased by 10.6 per cent to $1.37bn in 2013, according to data from Kinobusiness.

Of the 350 feature films released theatrically in 2013, only 85 received a limited distribution on fewer than 30 screens, a direct result of more digital screens. There are now over 3,000 digital screens in Russia as at Q4 2013, of which over three quarters are also 3D enabled. The proportion of screens upgraded to digital cinema in Russia reached 74.7 per cent in 2013, up from 54.8 per cent the previous year, according to IHS.

In terms of the local film industry, there were 59 local titles released , down from 72 the previous year, which accounted for 19 per cent of the total box office. Top performing film was local war drama Stalingrad released by distributor WDSSPR and the only movie to gross over $50m. A total of 44 titles grossed over the $10m mark, which is a new record for the territory.

Japan

Total admissions rose by just 0.5 per cent in Japan to 155.9m in 2013, according to data reported by the Motion Pictures Producers Association of Japan (EIREN). This follows a 7.2 per cent increase in 2012 and also still some way below the level attained before the tsunami and resulting devastation of March 2011. Box office revenue, meanwhile, fell slightly by 0.5 per cent to 194bn yen ($2.43bn) driven by a 1.0 per cent fall in average ticket prices to 1,246 yen ($15.6). As a result, average ticket prices are now lower in local currency values than in 2010.

There were a total of 1,117 total films released in 2013, the first time the number of releases has exceeded the 1,000 mark. This is part of a steadily rising trend over the past four years from 716 in 2009 and 983 in 2012. The major influence appears to be higher numbers of local films both produced and released, steadily rising from 408 in 2010 to 591 in 2013. Local titles typically have a major influence on the Japanese market and 2013 was no exception as their combined market share hit 60.6 per cent, a clear majority, but down slightly from a larger 63.7 per cent in 2012. The top film of the year was local title The Wind Rises, the only title to gross over $100m as well as being the first local title to finish top of the box office since 2009.

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