The North American cinema market set a new record for box office in 2016, grossing $11.36bn for US and Canada combined, according to box office tracking specialist comScore. The total gross was an increase of 2.1% over 2015, which itself was a record year. The market (and record revenues) in 2015 was driven by Star Wars: The Force Awakens (which grossed $936.7m) but 2016 was notable for a more even spread of the leading films. Nine films took over $300m at the box office compared to six in 2015 and three in 2014.
In 2016, the year’s highest grossing film was Disney’s Finding Dory, which earned $486.3m over its run, whereas the second-placed film was the new Star Wars offering Rogue One, despite only being on release for two weeks during 2016, pulling in $477.3m. The Top 10 films accounted for 32.4% of overall box office.
Disney is the undisputed leader of 2016, with four of the top 5 films and six of the Top 10. The studio took a 26.4% market share, followed by Warner Bros with 16.8% and Fox with 12.9%. Disney’s success is built on the back of a successful slate of franchises from their stable of well-known producers: LucasFilm, Pixar, Marvel and Disney itself. Warner’s success in second is also down to a succession of franchises (DC Comics) and production labels (New Line), and with the promising Fantastic Beasts also laying the foundations for the future.
In contrast to the USA’s good year, China saw an end to its period of very high (some would say unsustainably high) growth, with annual growth of just 3.7% to reach 45.7bn yuan ($6.58bn). This is more redolent of growth rates in mature markets, such as the USA, not markets where screen growth is still at very high levels. China is now the largest cinema screen market in the world, after the building of around 10,000 screens during 2016, finishing with 41,179 screens according to official data from the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT). Admissions actually increased by 8.7% to 1.37bn tickets, and the lower box office growth rate was the result of lower average ticket prices as the new screens ventured into towns and cities where ticket prices have to be less than the major population centres.
Imported films took a 41.7% market share in 2016 (earning 19.1bn yuan), compared to 38.4% in 2015 (17bn yuan), a good result in a poor year, and actually China let in more than the quota allows during the year in an attempt to shore up the year-end box office. The quota rules are being evaluated this year as part of a new World Trade Organisation deal.
The record year at the US box office is something out of the ordinary, given that the year following a record year often takes a step backward. One of the most notable factors is the spaced out nature of the films at the top of the market, From Deadpool in February to Rogue One in December, building on a trend that we identified last year in a research study. The traditional calm periods of the box office year are less prominent in today’s market, with an aim to maximise admissions across the year rather than at certain times only. Also of note is the fact that four out of the Top 10 movies in North America were animated titles aimed at families, compared to three in 2015 and two in 2014.
For China, the result is not welcome and not widely predicted a year ago, including by IHS. The slowdown has a number of possible explanations, and can be seen as something of a perfect storm of conditions and factors at a time when the Chinese consumer spending is slowing down. We summarised them in a study in September 2016 as:
If screen growth is to continue into cities and markets where screens do not yet exist, and there is still growth to come, then admissions and box office needs to be higher. However, the extremely high growth rates of the past decade are not sustainable in the long term, a point we have made several times in the past, so the future balance sits somewhere between the past and the present.