Experiential 4D cinema company CJ 4Dplex has set new records for gross box office and admissions in 2017 driven by a high for new screens amid the strengthening of longer term partnerships with key exhibitors.
4DX screens grossed $230m in 2017, up from a previously reported $200m in 2016 and $160m in 2015. For 2017, that equates to a 15% increase. Admissions to 4DX screens rose by a larger 26% to 19m, up from 15m in 2016 and in turn 12m in 2015 and nearly doubling over a four year period from the 10m reported back in 2014.
A total of 475 4DX screens were installed worldwide at end 2017, driven by a surge in new installs which equated to 129 in 2017 (up 37%), a slight increase from the 123 new screens recorded in 2016. The milestone came after previously surpassing the 400 screens in September 2017. All in, 4DX screens have now more than doubled since 2015 (223) and more than quadrupled since 2013 (87).
A total of 129 new 4DX sites were opened in 2017 which is the highest on record. Growth is being driven by the expansion of 4DX to new markets (again another recent high to 13 new territories up from seven in 2016) coupled with the forging of stronger relationships with key exhibition partners amid a trend for longer term deals versus singular sites. The trend comes as the wider 4D market has shifted its emphasis from assessing the merit of the technology and revenue upside in a small number of locations to becoming clearly results driven as the market enters a stronger growth phase and 4D more universally accepted as a differential but key technology offering.
The forging of longer term strategic deals will also continue to play a role in maintaining future growth such as the 50-screen deal with Gaumont Pathe cinemas in Europe, itself expanded out from an initial 30 screens. Europe has to date lagged take up of 4D technology versus Asia and Latin America and the large deal is significant for 4D’s wider prospects in the region as well as 4DX’s presence there.
In particular, Europe has been a hotspot for 4DX activity in 2017 with new partnerships forged with Kinepolis, KITAG and Nordisk Film, the latter for a total of nine screens across the region. This equates to a growth rate of 72% year on year in Europe, ahead of Asia with 36%. The largest growth rates were, however, recorded in Africa and North America where screens at least doubled. In 2017, 4DX expanded into 13 new territories including Australia, India and Switzerland.
According to IHS Markit, the total 4D cinema market (without inclusion of immersive motion seating IMS) reached a total of 580 screens in H1 2017, up from 490 screens at end 2016 or an impressive 87% increase year on year from the same period in 2016. For its part, 4DX registered a lower growth rate of 56% in that same phase for a total footprint of 373 according to IHS Markit.
CJ 4Dplex continues to play a crucial role in growing the total 4D cinema market (not including IMS) accounting for 64% of market share as at H1 2017, but down from a previous 76% share one year prior as the wider market has also developed. The other main competitor is Mediamation’s MX4D technology which had been deployed to 193 screens or 33% of the total market in the same timeframe.
The performance metrics for 4DX screens in admissions and revenue clearly show an upward trend, albeit slower than a respective screen growth trajectory, although the impact of new screens will likely not all equate in the same calendar year as it may take time to build awareness. The lower rate could also be impacted by recent expansion out to smaller territories with lower average ticket prices (such as India) and exchange rates may also be a factor. Nonetheless, the average box office per creen average for 4DX reached $480,000 in 2017 down from $578,000 in 2016. Admissions per screen, however have proven more stable hitting 40,000 in 2017 down slightly from 43,353 in 2016.
4D’s core proposal is based on a more immersive and differential experience over regular screens. That continues to be reflected in higher occupancy rates with 4DX’s top five territories all recording over 40% average occupancy led by its recent addition of Norway with 62% in 2017. While the novelty effect will initially provide a boost, the relative stability of admissions per screen and continued growth in total box office will provide a boost for the company as it looks to build on 2017’s result. The strategic outlook therefore remains positive for 4D especially considering the technology adoption is being driven by key exhibitors who have already made strategic investments into other premium formats such as IMAX, exhibitor PLF and latterly 4D. The stable number of titles released in 4D (which averages at 80 but exceeded 100 in 2017) is also helping to underpin growth and future take up. Nonetheless, the total of $230m box office for 4DX equates to under 0.6% of total world box office coming from fewer than 0.3% of the world’s screens, and while a very small proportion statistically there is clear and growing interest and exhibitor investment taken on the per screen results.
4D cinema providers are also looking at opportunities that bridge the fledgling location-based VR market. For its part, CJ 4Dplex has already launched a product line for 4DX VR units including 4DX VR Ride, 4DX VR Racing and the most recent entrant in late 2017 4DX VR Disk, which facilitates 360 degrees of virtual rotation.