Reaching for Skyfall-level ticket sales
About 1.36 billion people are expected to see films this year, compared with 1.29 billion in 2011.
Takings at US theatres are predicted to jump by 6 per cent, to $US10.8 billion, according to Paul Dergarabedian, a box-office analyst for Hollywood.com. Ticket prices have remained the same.
The anticipated rise in attendance would be the industry's biggest yearly increase since 2002.
Lately, studios and publicly traded theatre chains such as Regal Entertainment suffered drops in annual attendance, which resulted in them charging more for admission and concessions.
The expected rise in attendance comes despite a poor summer season, in which studios typically take 40 per cent of their year's revenue. Summer ticket revenue fell 3 per cent and attendance hit a 19-year low.
The July theatre shootings in Colorado kept some people home, though many films were simply mediocre.
But how Americans respond to movies became less important to studios this year.
Look no further than Ice Age: Continental Drift, from 20th Century Fox, to understand why.
US ticket sales for the fourth instalment in the animated series, were $US161 million, a 24 per cent decline from Ice Age: Dawn of the Dinosaurs in 2009, after adjusting for inflation.
Then why is Fox thrilled with its performance and developing a fifth chapter? Because Continental Drift took $US714 million overseas, including $US68 million in China.
Movies are a cyclical business in which a couple of hits - or misses - can whipsaw results. To that end, analysts emphasise that 2012 benefited greatly from just two films: The Hunger Games in March and Skyfall in November.
Backed by a social media marketing campaign, Lionsgate's Hunger Games became the No.3 movie of the year, taking about $US408 million domestically, and a global total of $US686.5 million.
The Avengers, from Disney's Marvel Studios, was the No.1 movie, taking in $US623.4 million in North America, part of a global total of $US1.51 billion — while The Dark Knight Rises, from Warner Bros, was second, taking in $US448.1 million, for a global total of $US1.08 billion.
Skyfall, from Sony and MGM, demonstrated how an ageing franchise can be reinvigorated if new instalments are worth seeing. Skyfall has taken $US280 million in North America and $US694.3 million overseas, making it one of the best-performing James Bond movies, even adjusting for inflation.
Frequently Asked Questions about this Article…
Attendance was expected to climb about 5.6% in North America in 2012 after two years of declines, helped by a slate of new blockbusters (for example, The Hunger Games, Skyfall and other franchise titles). Analysts predicted US box office takings would jump about 6% to roughly US$10.8 billion, showing that strong hit films can quickly lift ticket sales.
The article said about 1.36 billion people were expected to see films in 2012, compared with around 1.29 billion in 2011 — a global increase in moviegoing driven largely by major releases.
According to the article, average ticket prices remained about the same in 2012. However, some studios and publicly traded theatre chains (for example, Regal Entertainment) had reacted to earlier attendance declines by charging more for admission and concessions to offset weaker footfall.
Summer is typically a critical period (about 40% of a studio's annual revenue), but in 2012 summer ticket revenue fell about 3% and attendance hit a 19‑year low. The July theatre shootings in Colorado kept some people away, and many summer films were described as mediocre, all of which hurt seasonal box office returns.
The article highlights that overseas markets can make or break a film’s profitability: for example, Ice Age: Continental Drift earned only US$161 million in the US (a 24% decline versus the prior instalment after inflation) but took US$714 million overseas, including US$68 million in China. That global revenue encouraged the studio to develop a fifth chapter despite weaker US receipts.
The movie business is highly cyclical — a few big hits or big misses can swing results dramatically. The article notes that 2012’s strong box office was heavily influenced by just a couple of films (notably The Hunger Games and Skyfall), illustrating why investors should expect volatility in studio and theatre revenues tied to hit-or-miss releases.
The article names several top performers: The Avengers (Disney/Marvel Studios) earned about US$623.4 million in North America and US$1.51 billion globally; The Dark Knight Rises (Warner Bros) made about US$448.1 million in North America and US$1.08 billion worldwide; The Hunger Games (Lionsgate) took about US$408 million domestically and US$686.5 million globally; Skyfall (Sony and MGM) had about US$280 million in North America and US$694.3 million overseas. These grosses underline how individual blockbusters drive industry results.
Key takeaways from the article: box office revenue can rebound quickly with the right slate of blockbusters; international markets (including China) are increasingly important; summer performance still matters but isn’t the only driver; and theatre chains have tried offsetting attendance declines by raising prices on tickets and concessions. For investors, that means tracking film slates, overseas exposure and attendance trends can be as important as headline box office numbers.
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