Powered by WP Bannerize

Author Archive

postheadericon 3D Ticket Prices Outpaced by 2D, IMAX

For our recently published report, 3D Cinema 2011, we looked at changes in ticket prices in a number of key world cities since our previous report 18 months ago. The table below shows Saturday night ticket prices to a recently released Hollywood movie in a selected cinema in five major cities.

From it we can conclude a number of points.

Tickets in Mexico City were the cheapest, falling between $5 and $8 for standard 2D and 3D performances. The most consistently expensive city was Tokyo where ticket prices were between $23 and $29, although the most expensive tickets of all were found in Moscow where young thrill-seeking audiences are paying almost $30 for an IMAX 3D ticket.

With the exception of Tokyo, 2D ticket prices rose by more than the cost of 3D ticket between May 2010 and August 2011. It looks as though the widespread prediction that 2D ticket prices will catch up with 3D is coming true. In this scenario 3D was an experiment to test how much customers would pay for a ticket.

There are signs that the new point of differentiation is going to be IMAX. In Moscow and London IMAX ticket costs have soared – in Moscow IMAX ticket prices rose by 70% in local currency terms. This also goes some way to explaining the rash of exhibitors currently developing their own giant screen formats.

Price data below is shown in US$ for ease of comparison; however, percentage increases between the two dates are also shown based on local currency to eliminate the distorting effect of US$ weakness over the period.

Cinema Ticket Prices 2010-2011

Source: Dodona Research

postheadericon Italy and Spain Catching Up in Consolidation Stakes

The multiplex business is eminently scalable: refreshments, staff roles and training, not to mention film product, are all duplicated from site to site. Today’s ongoing migration to digital projection may increase this scalability with the promise of centralising some projection functions. There are substantial benefits to building large circuits with centralised offices and enhanced buying power that can conduct large scale marketing campaigns.

Following on from my last post, Coming Soon: the World’s First 10,000 Screen Circuit?, it’s interesting to look at levels of concentration in the major Continental European markets in 2010.

Top 3 Circuits: % Share of Screens

It is notable that Italy and Spain lag Germany and France in terms of the share of screens operated by the top three circuits in each country. Which neatly contextualises the spate of recent consolidation activity in these territories: Cineworld’s purchase of Cinesur (Cineworld’s Spanish Venture: Buy When There’s Blood In The Streets?); Odeon UCI’s acquisition of UGC’s Spanish cinemas and two sites from Coliseo; its purchases of the UGC and Vis Pathe circuits in Italy and, most recently, 51 screens from Giometti in a deal due to close this month. It is Spain and Italy which have offered the greatest opportunity to buy choice assets which can be combined to form larger, more profitable circuits. By our calculations, it looks as though the top three Italian circuits will control a minimum of 20% of Italian screens by the end of 2011, the top three in Spain a quarter of all screens in Spain – nearly the current level in France and Germany.

postheadericon Coming Soon: the World’s First 10,000 Screen Circuit?

A lesser-known Dodona Research publication is a compilation of circuit screen counts across around 60 territories, laid out as a grid. So circuit A has x screens in territory D, y screens in territory J, and z screens in total. It’s a survivor from the rush into international markets of a decade ago. With exhibitors having spent the last few years tidying up sub-scale foreign investments, nowadays our Cinema Exhibitors Database mostly serves as a prospects list for equipment manufacturers.

But it’s not without interest in its original role of measuring market concentration. For example, the three circuits which dominate the US market – Regal, AMC and Cinemark – are vastly larger than their nearest competitors with more than 17,000 screens between them. Fourth-placed Organizacion Ramirez Cinemas, based in Mexico, has 2,337.

Despite their size, however, they are less dominant within their home market than other exhibitors elsewhere. Not just small markets like Finland or Sweden but even the UK which, measured by box office, is currently the fifth largest theatrical market in the world after the United States, Japan, India (if you believe the figures), and France.

After a round of consolidation, the UK’s top three circuits now account for more than 60% of the country’s screens compared to the 40% of US screens owned by Regal, AMC and Cinemark. Both countries show a long term trend towards greater concentration, as the graph below illustrates.

Top 3 Circuits: % Share of Screens

Today Regal has 6,777 screens in the United States. In the UK it took 15 years for the share of the top 3 circuits to go from 40%, where the US is today, to 60%-plus. If the US follows suit, the odds are that its leading circuit will operate over 10,000 screens. If, as seems possible, digital technology makes running big circuits easier and more profitable, this milestone could come even sooner.