Movie Theaters - US - May 2012

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The market
Total movie theater revenues expected to just keep pace with inflation
Figure 1: Total U.S. movie theater revenues and fan chart forecast of the market with best- and worst-case scenarios, at current prices, 2006-16
Market drivers
Increasing ticket prices deter attendance
Figure 2: U.S. movie theater average ticket prices, 2003-12
Improving the viewing experience through technology may drive attendance
Figure 3: Installed analog, digital, and 3D movie screens, U.S., 2007-11
Leading companies
Regal, AMC, Cinemark, and Carmike account for more than half of U.S. audiences
Figure 4: Share of attendance and screens for top four theater chains, Fiscal Year 2011
The consumer
Movie attendance has yet to rebound from decline
Figure 5: Adults, teens, and kids movie theater attendance, 2010-11 vs. 2008-09
Going to the movies is usually a social activity
Figure 6: Movie theater companionship, January 2012
A majority of moviegoers purchase tickets in person at the theater box office
Figure 7: Most common movie ticket purchase method, January 2012
For many, concessions are vital to the movie experience
Figure 8: Concession and other non-ticket purchases at movie theaters, usually bought vs. sometimes bought, January 2012
At-home viewing is consistently preferred over movie theaters
Figure 9: Preferred movie watching venue, by key demographics, January 2012
Cost, control, crowds, and comfort keeping movie viewers at home
Figure 10: Why a theater is not the preferred venue for watching movies, January 2012
Opportunity to target avid moviegoers through loyalty program membership
Figure 11: Purchases tickets using a theater loyalty club card, by frequency of movie theater attendance, January 2012
What we think
ISSUES IN THE MARKET
What can theaters do to boost attendance?
How can theaters combat the draw of watching movies at home?
How can theaters leverage their spaces to create new revenue streams?
Is interest in 3D declining? What’s next?
INSIGHTS AND OPPORTUNITIES
Make it about more than just the show: highlight the social and experiential aspects
Give the audience some control
Theaters can use spaces for more than just movies
Figure 12: Willing to pay for live musical performances, special presentations at the movie theater, January 2012
Figure 13: AMC Theatre rentals and package tickets website information, April 2012
Figure 14: Level 4 theater, nightclub, lounge, April 2012
Consider selling the time, not the ticket
Increase onscreen advertising time to boost revenues
INSPIRE INSIGHTS
Trend: Rise of the Screenager
Trend: Snack Society
MARKET SIZE AND TRENDS
Total revenues expected to remain flat in face of declining attendance
Market size and forecast
Figure 15: Total U.S. movie theater revenues and forecast, at current prices, 2006-16
Figure 16: Total U.S. movie theater revenues and forecast, at inflation-adjusted prices, 2006-16
Fan chart forecast
Figure 17: Total U.S. movie theater revenues and fan chart forecast of the market with best- and worst-case scenarios, at current prices, 2006-16
COMPETITIVE CONTEXT
Key points
Live entertainment events compete with movie theaters for audiences
Figure 18: Live entertainment participation, July 2011
Alternative venues screen movies—sometimes cheaper, sometimes free
Viewing movies from the comfort of home
Equipment: a majority of households own HDTVs
Figure 19: Household ownership of TVs, home theater equipment, and Blu-ray, January 2012
Services: well-equipped households more likely to have video subscriptions
Figure 20: Household subscription services, and internet connectivity, by home entertainment equipment, January 2012
MARKET DRIVERS
Key points
High ticket prices cited as a reason for declining attendance
Figure 21: U.S. movie theater average ticket prices, 2003-12
Time poverty a real issue cutting into movie industry’s business
Figure 22: Average hours per day spent on all activities, weekends and holidays, 2006-10
Record high youth unemployment likely dampens teens’ spending
Figure 23: Employment-population ratio, 16-24 year olds, July 2002-11, not seasonally adjusted
Innovation and technology a driving force
Figure 24: Installed analog, digital, and 3D movie screens, U.S., 2007-11
Theater-to-video-release window tightened; consumers wait to buy
Simultaneous release even more of a threat to theaters
SEGMENT PERFORMANCE
Increased advertising revenue offsets box office and concessions losses
Figure 25: Total U.S. movie theater sales, by revenue stream, 2009 and 2011
Figure 26: Total U.S. movie theater revenues and forecast, by segment. 2006-16
SEGMENT PERFORMANCE—BOX OFFICE ADMISSIONS
Poor attendance causes admissions decline in 2011, gains expected in 2012
Figure 28: U.S. and Canadian movie theater box office admissions, 2006-11
Novelty of 3D wearing off, audiences more selective in their 3D viewing
SEGMENT PERFORMANCE—CONCESSIONS
Concessions decline in 2011, slide expected to continue in 2012
Figure 29: U.S. revenue and forecast of movie theater concessions, at current prices, 2006-16
Figure 30: U.S. movie theater concessions per patron, 2006-12
SEGMENT PERFORMANCE—ADVERTISING
Advertising revenue forecast to double from 2006-16
Figure 31: U.S. revenue and forecast of movie theater advertising, at current prices, 2006-16
Newly launched “second screen” may compete for audience attention
LEADING COMPANIES
Overview
Regal Cinemas, AMC, Cinemark, and Carmike are top theaters
Figure 32: Top four theater chains’ operating data, Fiscal Year 2011
Consumers’ visitation habits confirm the top four
Figure 33: Movie theaters visited in the past six months, by adults and teens, 2010-11
Revenues reflect attendance, top theaters account for more than half of total sales
Figure 34: Top four theater chains’ revenue and attendance, Fiscal Year 2011
Regal Entertainment Group
Operations
Figure 35: Regal Entertainment Group U.S. operating data, Fiscal Years 2007-11
Revenues
Figure 36: Regal Entertainment Group U.S. revenue data, Fiscal Years 2009 and 2011
Strategic initiatives
Figure 37: Regal Entertainment Group digital, 3D-capable, and IMAX screens, Fiscal Year 2011
AMC Entertainment Inc.
Operations
Figure 38: AMC Entertainment Inc. U.S. operating data, Fiscal Years 2007-11
Revenues
Figure 39: AMC Entertainment Inc. U.S. revenue data, Fiscal Years 2009 and 2011
Strategic initiatives
Figure 40: AMC Entertainment Inc. digital, 3D-capable, IMAX, ETX, and dine-in theaters and screens, Fiscal Year 2011
Cinemark
Operations
Figure 41: Cinemark U.S. operating data, Fiscal Years 2007-11
Revenues
Figure 42: Cinemark U.S. revenue data, 2009 and 2011
Strategic initiatives
Figure 43: Cinemark digital, 3D-capable, IMAX, XD, NextGen screens, Fiscal Year 2011
Carmike Cinemas
Operations
Figure 44: Carmike Cinemas U.S. operating data, 2007-11
Revenues
Figure 45: Carmike Cinemas U.S. revenue data, 2009 and 2011
Strategic Initiatives
Figure 46: Carmike Cinemas digital, Big D screens, Fiscal Year 2011
INNOVATIONS AND INNOVATORS
Key points
Going beyond the projector: upgrading the theater experience
Tugg lets movie theaters give the people what they want
Figure 47: Tugg website, April 2012
Satellite-based digital delivery to increase efficiency, decrease costs
MARKETING STRATEGIES
Key points
Traditional advertising is for the title event—not for the theater
Websites used to relay show information, promote theater, drive loyalty
Regal Cinemas
Figure 48: Regal Entertainment Group website, April 2012
AMC Theatres
Figure 49: AMC Theatres website, April 2012
Cinemark
Figure 50: Cinemark website, April 2012
Carmike Cinemas
Figure 51: Carmike Cinemas website, April 2012
iPic Theaters web commercial provides audiences with an escape
Figure 52: iPic Theaters web commercial, April 2012
CinéBistro advertising hits the streets with 3D mobile showcase
Figure 53: CinéBistro mobile marketing, September 2011
Muvico partners with area business to increase awareness and drive foot traffic
Figure 54: McDonald’s Muvico tray liner, April 2012
MOVIE THEATER ATTENDANCE TRENDS
Key points
Movie attendance has yet to rebound from decline
Glut of sequels in 2012 predicted to negatively impact attendance
Increasing ticket prices foot some of the blame for decreasing attendance
Figure 55: Adults’ past six month movie attendance and average number of times visited the movies in the last 90 days, January 2006-September 2011
Attendance driven by women, young adults, and affluents
Figure 56: Adults’ past six month movie attendance and average number of times visited the movies in the last 90 days, by key demographics, July 2010-September 2011
People who notice products placed in movies are more likely to attend the cinema
Figure 57: Adults’ past six month movie attendance and average number of times visited the movies in the last 90 days, by movie product placement segmentation, July 2010-September 2011
Teen movie attendance declines significantly
Figure 58: Teens’ past six month movie attendance and number of times visited the movies in the last 90 days, May 2005-June 2011
Still, teens go more than adults, and kids are most likely to attend
Figure 59: Adults’, and teens’ past six month movie attendance and average number of times visited the movies in the last 90 days/kids’ past three month movie attendance and number of times attended the movies in the past three months, 2010-11
Kids go against overall trends; attendance is up among 6-11 year olds
Figure 60: Kids’ past three month movie attendance and number of times attended the movies in the past three months, May 2005-June 2011
MOVIE THEATER ATTENDANCE FREQUENCY
Key points
More than half go to the movies at least every two to four months
Figure 61: Frequency of movie theater attendance, January 2012
Frequency generally reflects attendance trends
Figure 62: Frequency of movie theater attendance, by key demographics, January 2012
MOVIE THEATER COMPANIONSHIP
Key points
Going to the movies is usually a social activity
Figure 63: Whom do you go to the movies with? Most often and also go with, January 2012
Women more likely to go with children; men more likely to go solo
Figure 64: Movie theater typical companionship, by gender, January 2012
Younger adults go with friends; older adults go with a spouse
Figure 65: Movie theater typical companionship, by age, January 2012
Among teens, friends replace parents as companions
Figure 66: Teens’ typical movie companionship, by gender and age, April 2010-June 2011
MOVIE TICKET PURCHASE METHODS
Key points
Tickets are most often purchased in person at the theater box office
Figure 67: Movie ticket purchase methods, January 2012
Moviegoers aged 18-34 use a variety of methods to purchase tickets
Figure 68: Movie ticket purchase methods, by age, January 2012
Mid- to upper-income moviegoers more likely to plan ticket purchases in advance
Figure 69: Movie ticket purchase methods, by household income, January 2012
MOVIE TIME AND LOCATION SEARCHING METHODS
Key points
Local print publications and movie theater websites used most often
Figure 70: Movie time and location searching methods, January 2012
Print used most by ages 55+, under-55s more apt to go online
Figure 71: Most typical movie time and location searching methods, by age, January 2012
Most affluent moviegoers use local print and internet ticketing sites
Figure 72: Most typical movie time and location searching methods, by household income, January 2012
CONCESSIONS AND OTHER NON-TICKET PURCHASES AT MOVIE THEATERS
Key points
Popcorn and soft drinks, fruit juice, water purchased most at the movies
Figure 73: Concessions and other non-ticket purchases at movie theaters, January 2012
Movie theater “extras” are often driven by children in the household
Figure 74: Most typical concessions and other non-ticket purchases at movie theaters, by presence of children in household, January 2012
MOVIE THEATER AMENITIES WORTH PAYING EXTRA FOR
Key points
Movie viewing technologies most likely to be worthy of paying extra for
Figure 75: Movie theater amenities worth paying extra for, March 2011 vs. January 2012
Preference for 3D declines
Figure 76: Preference for 3D version of movies, by age, October 2009- September 2011
Men more willing to pay extra for viewing experience
Women show greater interest in convenience and variety of food and beverages
Figure 77: Movie theater amenities worth paying extra for, by gender, January 2012
In general, a willingness to pay extra diminishes with age
Figure 78: Unwilling to pay extra for any theater amenities, by age, January 2012
Most affluent value technology and healthy, higher-quality food choices
Figure 79: Movie theater amenities worth paying extra for, by household income, January 2012
Alcohol purchasers are most willing to pay extra…for everything
Figure 80: Movie theater amenities worth paying extra for, by purchases alcohol, January 2012
PREFERRED MOVIE VENUE AND WHY HOME IS PREFERRED
Key points
Viewing at home is consistently preferred over movie theaters
Figure 81: Preferred movie watching venue, by key demographics, January 2012
Cost, control, crowds, and comfort keeping movie viewers at home
Figure 82: Why a theater is not the preferred venue for watching movies, by movie attendance, January 2012
Mid- to upper-income moviegoers are not immune to pricing pressure
Figure 83: Why a theater is not the preferred venue for watching movies, by household income, January 2012
Home theaters and subscription services compete with theaters
Figure 84: Why a theater is not the preferred venue for watching movies, by home entertainment equipment owned and subscription services, January 2012
Figure 85: Household subscription services, by home entertainment equipment owned, January 2012
IMPACT OF RACE AND HISPANIC ORIGIN
Key points
Movie theater attendance trends
Asians are most likely to have attended; Hispanics average more visits
Figure 86: Past six month movie attendance and average number of times visited the movies in the last 90 days, by race/Hispanic origin, July 2010-September 2011
Figure 87: Perception of movie attendance frequency, by race/Hispanic origin, July 2010-September 2011
Teens of all races go to the movies; non-white teens go with greater frequency
Figure 88: Teens’ past six month movie attendance and number of times visited the movies in the last 90 days, by race/Hispanic origin, April 2010-June 2011
Movie theater attendance frequency
Figure 89: Frequency of movie theater attendance, by race/Hispanic origin, January 2012
Movie theater companionship
Figure 90: Movie theater typical companionship, by race/Hispanic origin, January 2012
Movie ticket purchase methods
Figure 91: Movie ticket purchase methods, by race/Hispanic origin, January 2012
Movie time and location searching methods
Figure 92: Most typical movie time and location searching methods, by race/Hispanic origin, January 2012
Concessions and other non-ticket purchases at movie theaters
Figure 93: Most typical concessions and other non-ticket purchases at movie theaters, by race/Hispanic origin, January 2012
Movie theater amenities worth paying extra for
Figure 94: Movie theater amenities worthy of paying extra, by race/Hispanic origin, January 2012
Figure 95: Preference for 3D version of movies, by race/Hispanic origin, July 2010-September 2011
Preferred movie venue and why home is preferred
Figure 96: Preferred movie watching venue, by race/Hispanic origin, January 2012
Figure 97: Why a theater is not the preferred venue for watching movies, by race/Hispanic origin, January 2012
CUSTOM CONSUMER GROUPS—ATTENDANCE FREQUENCY
Key points
Movie theater companionship
Figure 98: Whom do you go to the movies with?, by frequency of movie theater attendance, January 2012
Movie ticket purchase methods
Figure 99: Movie ticket purchase methods, by frequency of movie theater attendance, January 2012
Movie time and location searching methods
Figure 100: Movie time and location searching methods, by frequency of movie theater attendance, January 2012
Concessions and other non-ticket purchases at movie theaters
Figure 101: Concessions and other non-ticket purchases at movie theaters, by frequency of movie theater attendance, January 2012
Movie theater amenities worth paying extra for
Figure 102: Movie theater amenities worth paying extra for, by frequency of movie theater attendance, January 2012
Preferred movie venue and why home is preferred
Figure 103: Preferred movie watching venue, by frequency of movie theater attendance, January 2012
Figure 104: Why a theater is not the preferred venue for watching movies, by frequency of movie theater attendance, January 2012
APPENDIX—OTHER USEFUL CONSUMER TABLES
Movie theater attendance trends
Figure 105: Teens’ past six month movie attendance and number of times visited the movies in the last 90 days, by gender and age, April 2010-June 2011
Figure 106: Top ways for teens to spend money, by gender, May 2011
Figure 107: Kids’ past three month movie attendance and number of times attended the movies in the past month, by age, April 2010-June 2011
Movie theater attendance frequency
Figure 108: Frequency of movie theater attendance, men, by age, January 2012
Figure 109: Frequency of movie theater attendance, women, by age, January 2012
Movie theater companionship
Figure 110: Movie theater typical companionship, by household income, January 2012
Figure 111: Movie theater typical companionship, men, by age, January 2012
Figure 112: Movie theater typical companionship, women, by age, January 2012
Figure 113: Movie theater typical companionship, by presence of children in household, January 2012
Movie ticket purchase methods
Figure 114: Movie ticket purchase methods, men, by age, January 2012
Figure 115: Movie ticket purchase methods, women, by age, January 2012
Movie time and location searching methods
Figure 116: Most typical movie time and location searching methods, by gender, January 2012
Figure 117: Most typical movie time and location searching methods, men, by age, January 2012
Figure 118: Most typical movie time and location searching methods, women, by age, January 2012
Concessions and other non-ticket purchases at movie theaters
Figure 119: Most typical concessions and other non-ticket purchases at movie theaters, by gender, January 2012
Figure 120: Most typical concessions and other non-ticket purchases at movie theaters, by gender and marital status, January 2012
Movie theater amenities worthy of paying extra
Figure 121: Movie theater amenities worthy of paying extra, by age, January 2012
Figure 122: Movie theater amenities worthy of paying extra, by region, January 2012
Preferred movie venue and why home is preferred
Figure 123: Preferred movie watching venue, by region, January 2012
Figure 124: Why a theater is not the preferred venue for watching movies, by gender, January 2012
Figure 125: Why a theater is not the preferred venue for watching movies, by age, January 2012
APPENDIX—TRADE ASSOCIATIONS