2006 U.S. Theatrical Market Statistics. Worldwide Market Research & Analysis
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1 2006 U.S. Theatrical Market Statistics Worldwide Market Research & Analysis
2 2006 Motion Picture Industry Highlights The following document provides context and empirical data with respect to box office in Box Office In 2006, there was a 5.5% increase in total domestic box office, bringing the total box office to $9.49 billion. Global box office reached an all-time high with $25.82 billion in 2006, compared to $23.27 billion in 2005, an 11% increase. U.S. theater admissions grew 3.3% to 1.45 billion tickets, ending a 3-year downward trend. Costs Average theatrical costs remained fairly flat in 2006 at $100.3 million a drop in marketing costs offset an increase in negative costs. Advertising expenditures on the Internet jumped up to 3.7% for MPAA member companies. Page 2
3 2006 Motion Picture Industry Highlights The Movies The number of movies released has been steadily growing, with total releases topping another alltime high of 607 versus 549 in 2005, a growth of 11%. Consistent with past years, PG-13 films comprised the majority of top grossers for the industry, with PG and PG-13 films accounting for 85% of 2006 s top 20 films. Who is Going Research conducted in the summer of 2006 found that people went to movies in the theater more frequently over the prior 12 months than in Likewise, the proportion of people who never go to the movies dropped in African-Americans have the highest admissions per moviegoer with 9.0 movies per year. Satisfaction Research conducted by Nielsen Entertainment/NRG in January 2007 found that an overwhelming 80% of moviegoers who saw at least one movie in 2006 believed the experience was one of time and money well spent, versus the 16% who preferred watching on DVD and the 4% who preferred they had not seen the movie at the theater. Nearly half of these moviegoers plan to buy the last movie they saw, with exactly half of them making this decision immediately after seeing the movie. Page 3
4 U.S. Box Office has rebounded After a dip in 2005, the U.S. box office has climbed up 5.5% to $9.49 billion. U.S. Box Office (Billions) $7.66 $8.41 $9.52 $9.49 $9.54 $8.99 $9.49 Source: MPAA Page 4
5 Worldwide Box Office reaches historic high Worldwide box office also rebounded in 2006 and reached an all-time high of $25.82 billion an 11% increase from the previous year. Worldwide Box Office (Billions) $16.96 $19.77 $20.39 $25.19 $23.27 $ Source: MPAA Page 5 Note: Worldwide box office includes the United States.
6 U.S. Admissions Theater admissions grew 3.3% in the U.S. in 2006, ending a 3-year decline. U.S. Admissions (Billions) Source: MPAA Page 6
7 Admissions per Capita Admissions per capita remained fairly flat with a 0.2% increase. Admissions per Capita Source: MPAA Page 7
8 Industry Comparisons Entertainment Options Movies drew more people than either theme parks or the major professional league sports combined. 1, : Admissions/Attendance Comparison (Millions) NHL 21.0 NFL 17.4 NBA MLB 76.5 Movies Theme Parks Sports Source: MPAA, PricewaterhouseCoopers Sports Page 8
9 U.S. Box Office There were 12.5% more films that grossed more than $50 million at the box office in film even grossed more than $400 million. Further, the number of movies that made $50 to $200 million grew 19% in Number of Films Breaking Benchmarks Year of Release % Change Box Office Range v $400 Million & Over % $200 to $399 Million % $100 to $199 Million % $50 to $99 Million % TOTAL % Source: Nielsen EDI Page 9
10 Films Released in the U.S. The total films released in 2006 increased by 11% from 2005 driven by new film releases, which grew 12%. Number of Films Released Total New Releases Reissued Feature Films Released in the U.S. New Releases Reissues Year MPAA % of All Other % of Total New All Other Total New MPAA Total Distributors Total Releases Distributors Reissues % % % % % % % % % % Source: MPAA Page 10
11 Top Films & Ratings In 2006, 13 of the top 20 grossing films were rated PG-13. PG and PG-13 films account for 85% of 2006 s top 20 films. Rank Title Source: MPAA, Nielsen EDI 2006 TOP GROSSING FILMS Box Office Distributor (Millions) Rating 1 Pirates of the Caribbean: Dead Man's Chest Buena Vista $423.3 PG-13 2 Cars Buena Vista $244.1 G 3 X-Men: The Last Stand Fox $234.4 PG-13 4 Night at the Museum Fox $218.6 PG-13 5 The Da Vinci Code Sony $217.5 PG 6 Superman Returns Warner Bros. $200.1 PG-13 7 Ice Age: The Meltdown Fox $195.3 PG 8 Happy Feet Warner Bros. $192.1 PG 9 Casino Royale Sony $165.5 PG Over the Hedge Paramount $155.0 PG 11 The Pursuit of Happyness Sony $154.3 PG Talladega Nights: The Ballad of Ricky Bobby Sony $148.2 PG Click Sony $137.4 PG Mission: Impossible 3 Paramount $134.0 PG Borat Fox $127.9 R 16 The Departed Warner Bros. $126.3 R 17 The Devil Wears Prada Fox $124.7 PG The Break-Up Universal $118.8 PG Scary Movie 4 TWC $90.7 PG Dreamgirls Paramount $88.7 PG-13 Includes box office data as of February Top 20 Films by Rating PG-13 65% R 10% 13 films 2 G 5% PG 1 20% 4 Top 20 Grossing Year G PG PG-13 R % 20% 65% 10% % 25% 60% 10% % 25% 55% 15% % 15% 60% 20% % 30% 65% 0% Page 11
12 MPAA Member Companies Average Theatrical Costs Since 2003, average theatrical costs of MPAA member companies were down 5.5% overall. From 2005 to 2006, negative costs were up 3.4% and marketing costs decreased by 4.4%. In absolute numbers, average negative and marketing costs hit their peak in $105.8 $100.5 $99.7 $100.3 $78.2 $30.4 $39.5 $34.8 $36.1 $34.5 Marketing Costs Negative Costs Millions $47.8 $66.3 $65.7 $63.6 $ Source: MPAA Note: MGM data is no longer collected historical figures have been adjusted to reflect this omission. Page 12
13 MPAA Member Subsidiary/Affiliate* Average Theatrical Costs Average theatrical costs for member subsidiaries grew 22.7%. Negative costs were up 28.9% while marketing costs were up 13.2%. $62.0 $45.4 $11.4 $15.1 $40.4 $38.7 $11.4 $15.2 $48.5 $17.8 Marketing Costs Negative Costs Millions $34.0 $46.9 $29.0 $23.5 $ Source: MPAA Page 13 * Subsidiaries include studio classics and specialty divisions such as Fox Searchlight, Miramax, New Line, Sony Pictures Classics, etc.
14 MPAA Member Company Distribution of Advertising Costs by Media The distribution of advertising expenditures among member companies on the Internet grew to 3.7% from 2005 to Source: MPAA % of Total Year Avg $ Network Newspaper Spot TV Internet/ Other Other Trailers (Millions) TV Online Media Non-Media 2006 $ % 21.2% 13.9% 3.7% 4.3% 24.4% 21.6% 2005 $ % 23.1% 12.8% 2.6% 4.4% 22.4% 22.0% 2004 $ % 23.0% 13.2% 2.4% 7.6% 22.2% 18.9% 2003 $ % 23.0% 15.6% 1.4% 4.5% 21.9% 19.5% 2002 $ % 22.8% 17.5% 0.9% 4.6% 21.7% 18.8% Other Media includes: Cable TV Radio Magazines Billboards Other Non-Media includes: Production/Creative Services Exhibitor Services Promotion & Publicity Market Research Page 14 Network TV 21% Spot TV 14% Newspaper 11% Internet/ Online 4% Trailers 4% Other Media 24% Other Non- Media 22% Note: MGM data is no longer collected historical figures have been adjusted to reflect this omission.
15 Frequency of Moviegoing Moviegoers went to the movies more frequently in 2006 the % of people who never or infrequently attend movies fell. 40% 35% 30% 25% 20% 35% 28% 26% Frequency of Moviegoing % 35% 27% 25% 34% 28% 29% 28% 24% 24% 34% 26% 15% 11% 11% 13% 13% 11% 10% 5% Frequent Occasional Infrequent Never Frequent = at least once per month (12x/year) Occasional = at least once in six months (2-11x/year) Source: MPAA Infrequent = less than once in six months Yearly totals represent data from mid-july to mid-july of the following year not calendar years Page 15
16 Ethnicity While each ethnic group experienced some change in 2006, the total public average admissions per moviegoer stayed static at 7.6 movies per person per year. Admissions per Moviegoer by Ethnicity African- American Other Hispanic Caucasian Total Public Source: MPAA Page 16 Note: Survey is conducted only in English Yearly totals represent data from mid-july to mid-july of the following year not calendar years
17 When they choose to go, Moviegoers like the Experience The vast majority of moviegoers say their overall theater experience is time and money well spent. Satisfaction with theater experience at last movie Source: Nielsen Entertainment/NRG Page 17
18 The Movie-Watching Experience About two-thirds of respondents still feel that the theater offers the ultimate moviewatching experience. Of the segments, younger males are the most likely to prefer the theater experience. What is the ultimate movie-watching experience? Home 37% Home 22% Home 37% Home 31% Home 45% Theater 63% Theater 78% Theater 63% Theater 69% Theater 55% Source: Nielsen Entertainment/NRG TOTAL M<25 M 25+ F<25 F 25+ Page 18
19 The High-Tech Household Those moviegoers who own or subscribe to four or more home technologies were actually more avid moviegoers, seeing an average of three more movies per year than the moviegoer who owned or subscribed to fewer than four. MOVIEGOERS WHO OWN OR SUBSCRIBE TO 4+ TECHNOLOGIES (22%) Avg. Movies/Yr = 10.5 Source: Nielsen Entertainment/NRG Page 19 MOVIEGOERS WHO OWN OR SUBSCRIBE TO <4 TECHNOLOGIES (78%) Avg. Movies/Yr = 7.1
20 Appendix Worldwide Market Research & Analysis
21 Box Office Source: MPAA Box Office Gross % Change vs. Year (Billions) Prev. Period $9, % , % , , , , , , , , , , , , , , , , , , , Page 21
22 Admissions Source: MPAA Admissions % Change vs. Year (Millions) Prev. Period , % , % , , , , , , , , , , , , , , , , , , , Page 22 Note: 1989 to present based on NATO average ticket price
23 Average Annual Admission Price Avg. Annual Admission % Change % Change Year Price (USD) Prev. Period 2006 vs. CPI 2006 $ % - 3.2% % Note: NATO average ticket price based on a survey by Goodman & Company and reflects average price paid for all admissions to movie theaters, inclusive of first run, subsequent runs, senior citizens, children, and all special pricing. Source: MPAA, Bureau of Labor Statistics Page 23
24 Industry Comparisons Entertainment Options Going to the movies remains an affordable outing for most families with admission prices significantly lower than alternative entertainment options. Event 2006: Average National Ticket Price Comparison Admission Price (1 Ticket) * Cost for Admission Family of Price Four (1 Ticket) Cost for Family of Four % Change 2006 vs Football Game $61.60 $ $58.95 $ % Basketball Game $46.00 $ $45.28 $ % Hockey Game $41.20 $ $44.55 $ % Theme Park $34.21 $ $33.57 $ % Baseball Game $22.40 $89.60 $21.17 $ % Movie $6.55 $26.20 $6.41 $ % Source: MPAA, PricewaterhouseCoopers * 2005 data updated by source; 2004 data used for NHL due to cancellation of season. Page 24
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