News
Lack of 'Sleeper' Hits Deflates '10 Boxoffice
By Robert Marich
Jan. 4, 2011—Boxoffice revenue fell slightly in 2010 and ticket sales were off a bit more, which has prompted a lot of what I view as bogus analysis. Some pundits blame “3D fatigue,” higher ticket prices and audience diversion to video-on-demand. None of these ring true to me. In particular, VOD has never taken off.
Analysis by investment house Merriman Capital tells the real cinema story. A 24-page cinema industry report by Merriman concludes that the main culprit is that 2010 suffered from a dearth of sleeper hits and, in comparison, 2009 had a lot of these surprise films. Further, it is optimistic that box office will rebound in 2011, based on promising sequels and more 3D films in the pipeline.
Here are the figures for 2010. Box Office Mojo calculates that box office declined on a revenue basis by 0.3% to $10.56 billion (some other sources put the decline as greater, such as Variety with a 1.4% dip). Ticket sales (head count) fell 6% to 1.33 billion admissions. The difference is attributable to higher average ticket prices up 6%, largely from proliferation of 3D screens charging higher prices. While the 6% admissions slide is a worry, Variety points out that the major studios released 110 films in 2010, down from 121 in 2009, which is also a factor since fewer major film obviously would lead to less business.
One reason 2009 was strong is its unexpected hits of “The Hangover, The Blind Side, Paul Blart: Mall Cop and Paranormal Activity — with the cumulative box office generated totaling $787.5 million, or about 7.4% of the year’s total domestic box office,” notes the report by Merriman analysts Eric Wold and Greg Scott. “In contrast, 2010 delivered only one true sleeper hit among the top 20 films—Despicable Me with $251 million in box office, or 2.4% of the total.”
“While this is definitely not a scientific analyst that we will place a considerable amount of merit on, but had the four ‘sleeper hits’ of 2009 generated only half of the box office revenues they ended up generating (which would be about $98.4 million — or still considerably higher than the wide-release average of $68.2 million for 2009), then we estimate the 2010 box office would have actually increased by 3.5% instead of declining by 0.3%,” notes the Merriman Capital report. “We believe this demonstrates just how much impact a few ‘sleeper’ box office hits can have on overall results and skew the Y/Y comparisons.”
The Merriman report is optimistic about 2011. “Based on the sequel-driven slate of movies being released in 2011 (along with a number of strong non-sequel contenders) along with an increasing mix of 3D titles and associated 3D-capable screens, we are projecting a domestic box office increase of 5-7% in 2011 — including a 1-2% increase in attendance coupled with a 4-5% increase in average ticket prices.”
The decline in admissions is a worry but not alarming. As Marketing to Moviegoers: Second Edition notes, admissions have consistently been above 1 billion since the 1980s, which is good given movies proliferate on numerous aftermarkets such as DVDs. It could be argued this is really poor performance compared to population growth, but the U.S./Canada market – the “domestic market” – is one of the strongest cinema areas in the world.
For more info, click links below:
www.marketingmovies.net/news/cinema-metric-tickets-or-dollars/
www.marketingmovies.net/news/cinema-revenue-tops-dvd-in-09/
www.marketingmovies.net/chapters/chapter-7-distribution-to-theaters/