Sample Book Chapters

Chapter 8 - Exhibition (Theaters)

Chapter extracts in this website represent 4,000 words distilled from the 102,000 words in the print book.
    The cinema business continues to hold its place in the movie distribution cycle, despite encroachment by DVDs, pay-per-view television in its numerous forms, subscription pay TV and film pirates.
No other movie platform captures the collective experience of a group huddled in a darkened auditorium sharing the laughs, the tears and the wide-screen spectacle of cinema. Exhibitors can be viewed a retail store operators and their cinema screens are shelf space.
    Movie theaters are becoming more aggressive in selling advertising to nonfilm companies, a trend that ultimately could cut into film marketing efforts inside theaters. Exhibitors note that the on-screen cinema advertising business is far larger in Europe, which they feel points to growth opportunities in the United States.
    Exhibition is a business with little brand identification or loyalty. Consumers traditionally make a cinema decision primarily by choosing the nearest theater offering a desire movie or the nearest cinema equipped with sought-after amenities such as stadium seating or unobstructed sight lines to the screen.
Large-screen theaters, once confined mostly to museums and institutions, are popping up as part of or adjacent to regular theaters. Typically, one oversized auditorium is equipped as a giant-screen venue and IMAX is leader in the category. Special effects-laden films, sci-fi, fantasy, historical epics and action films are best suited for large screen projection.
    The cinema industry is heavily dependent on a core audience of frequent moviegoers who go to at least one movie per month, or 12 movies per year. In 2003, frequent filmgoers represented 35% of the pool of people going to cinemas but 78% of all ticket sales, according to the Motion Picture Association of America (MPAA).
    The most avid filmgoers are ages 18 to 20, of which 62% were frequent moviegoers in 2003, according to the MPAA. Looking at a broad demographic swath, ages 12-29 represent 30% of the population but an outsized 48% of admissions in 2003, according to the MPAA.
In the 1999-2001 time frame, 13 sizable United States theater chains landed in bankruptcy, a casualty of audience demand for state-of-the-art facilities and over-expansion of theater circuits. They emerged stronger as they either shed unwanted theaters or renegotiated leases to lower payments.
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Copyright © 2005, Elsevier Inc. All rights reserved.
Note: Book passages and tables are updated where appropriate, and some bridge text may be added to smooth transitions in the accompanying excerpt.

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U.S. Box Office $ Billions

Year/BO $ in Billionsup 5.5% to $9.49 billion.

2006- $9.49

2005- $8.99

2004- $9.54

2003- $9.49

2002- $9.52

2001- $8.41

2000- $7.66

Source: MPAA

 

 U.S. Admissions* (millions)

Year/Millions/% ChangePrev. Period Year

2006   1,448.5           3.3%

2005   1,402.7           -8.7%

2004   1,536.1           -2.4%

2003   1,574.0           -4.0%

2002   1,639.3           10.2%

2001   1,487.3           4.7%

2000   1,420.8           -3.0%

1999   1,465.2           -1.0%

1998   1,480.7           6.7%

1997   1,387.7           3.7%

*Admissions are tickets sold.

Note: Admissions presented in billions so 2006 is one billion, four-hundred forty-eight million, five-hundred thousand tickets sold.

Source: MPAA