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Movie Theaters - US - February 2008

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Movie exhibitor revenues rebound but admissions stay flat
Cinema advertising is the fastest-growing segment of theater revenues
Home viewing of movies detracts from box office
More of the same from Hollywood studios
Will stars always matter?
Traditional movie adspend down, but “independent” label spend up
Attention turns to Boomers to grow market
Trend toward larger theater complexes and bigger screens continues
Cost is primary deterrent to theater attendance
Screen size and leaving the house are biggest advantages of cinema
Closest theater is not necessarily most frequented
INSIGHTS AND OPPORTUNITIES
Improving value through pricing structures
Redefining the experience for over-45s
FAST FORWARD TRENDS
Trend: Sense of the Intense
How it impacts the movie theater market
Surround vision and all five senses
Movie clubs
Themed ambience
Trend: Third Place
How it impacts the movie theater market
The local movement
Opportunities in middle America
Trend User-Generated Content
How it impacts the movie theater market
Crowd-Gaming Arrives
How it impacts the movie theater market
Multitasking at the cinema
Filling every seat
Following in the lead of airlines, eBay, and ballparks
Movie theaters as content distributors
MARKET SIZE AND FORECAST
Key points
Figure 1: Movie theater admissions, 2002-07
Figure 2: Total domestic revenues of movie theater operators, 2002-12
COMPETITIVE CONTEXT
Competition from other sources of filmed entertainment
Figure 3: Annual consumption of selected filmed entertainment, hours per person per year, 2002-06
Video-on-demand (VOD) grows
Figure 4: Pay-per-view and video-on-demand usage, by year, 2005-07
Internet downloads aided by growth of broadband
Shrinking window to home broadcast
Better viewing equipment at home
Figure 5: Penetration of HDTV, 2004-07
Figure 6: Sizes of television(s) owed, 2004-07
SEGMENT PERFORMANCE—OVERVIEW
Key points
Ancillary revenues grow faster than box office
Figure 7: U.S. sales and forecast of movie theater sales, at current prices, by segment, 2002-12
Figure 8: Cinema exhibitor sales, by revenue stream, 2005 and 2007
SEGMENT PERFORMANCE—ADMISSIONS
Key points
Box office grows but admissions unlikely to recover
Figure 9: Graph: Movie theater admissions and average ticket prices, 2000-07
Figure 10: Movie theater admissions and average ticket prices, 2002-07
Figure 11: Sales of movie tickets at box office, 2002-12
SEGMENT PERFORMANCE—CONCESSIONS
Key points
Concession revenue grows through price hikes
Figure 12: Average ticket and concession revenue per patron at Regal Cinemas, 2003-07
Concessions become greater part of profit
Figure 13: Sales of theater concessions, 2002-12
SEGMENT PERFORMANCE—CINEMA ADVERTISING
Key points
Cinema advertising positioned for 12-34 year olds
Cinema ads draw new clients in new formats
Cinema advertising may benefit from Hollywood writers’ strike
Figure 14: Sales of cinema advertising, 2002-12
SUPPLY STRUCTURE
Key points
Market share changes hands but stays in the family
Figure 15: Box office share of major media conglomerates, 2003-07
Studios scramble for sequels but see no boost
Figure 16: Movie sequels grossing over $100 million, 2002-07
Star power lower in 18-24s
Figure 17: Factors in movie selection, by age, December 2007
MARKET DRIVERS
Greatest growth potential from aging Boomers
Figure 18: U.S. population and projections and average visits to the movies, by age, 2002-12
Cutbacks in consumer spending
Figure 19: Reaction to rising gas prices, by age, November 2007
Figure 20: Change in aggregate consumer expenditures in a recession period, by category, 2002-03 and 2003-04
LEADING COMPANIES
Key points
Exhibitor snapshot
Figure 21: U.S. box office revenues, by theater exhibitor, 2006 and 2007
Figure 22: Selected statistics for major U.S. theater exhibitors, 2007
Regal Entertainment
AMC Entertainment
Cinemark
Carmike
Flurry of corporate activity
Growth in multiple-screen complexes
Figure 23: Number of movie theaters in the U.S., by screen count, 2003 and 2006
Imax 3D expansion
Digitization of screens
Online ticket sales
Fandango.com
Movietickets.com
INNOVATION AND INNOVATORS
Adult-oriented luxury theaters
Live entertainment
More specialty fare in the line-up for over-40s
Faster concession lines
Guest response systems
ADVERTISING AND PROMOTION
Overview
Figure 24: Media expenditures and total sales for major movie studios, 2006
Marketing costs rise for indies
Figure 25: Average advertising cost of new feature films, MPAA members vs subsidiaries/affiliates, 2002-06
Media selection
Figure 26: Allocation of advertising spend for MPAA member companies, by media, 2002-06
Theater chains increase adspend
Figure 27: Media expenditures, by selected theater chains, 2005 and 2006
Figure 28: Xtreme Clip: Chicago Imax Theater, April 2007
THE CINEMA EXPERIENCE AND SUBSTITUTES
Frequency of usage
Figure 29: Movie viewing, by medium, and use of online trailers and movie websites in the past six months, December 2007
Figure 30: Movie viewing, by medium, and use of online trailers and movie websites in the past six months, by age, December 2007
REASONS WHY ATTENDANCE IS NOT HIGHER
Figure 31: Reasons not to go to the movies, December 2007
Figure 32: Reasons not to go to the movies, by age, December 2007
Figure 33: Reasons not to go to the movies, by household income, December 2007
REASONS TO GO TO MOVIES OVER WATCHING A DVD
Figure 34: Reasons for going to the movies over watching a DVD, December 2007
Figure 35: Reasons for going to the movies over watching a DVD, by gender, December 2007
Figure 36: Reasons for going to the movies over watching a DVD, by age, December 2007
Factors in movie selection
Figure 37: Factors in movie selection, December 2007
Figure 38: Factors in movie selection, by age, December 2007
AWARENESS AND ENJOYMENT OF FILMS AT THE THEATER
Figure 39: Attitudes toward movie-going, December 2007
Figure 40: Attitudes toward movie going, by age, December 2007
THEATER SELECTION
Factors in theater preference
Figure 41: Reasons for going to a theater other than the closest, December 2007
Figure 42: Reasons for going to a theater other than the closest, by gender, December 2007
Figure 43: Reasons for going to a theater other than the closest, by age, December 2007
ATTITUDES TOWARD PRICING AND CONCESSIONS
Figure 44: Attitudes toward pricing and concessions, December 2007
Figure 45: Attitudes toward pricing and concessions, by age, December 2007
THE MOVIE THEATER AS ADVERTISING FORUM
Figure 46: Attitudes toward advertisement at the theater, 2005 and 2007
Figure 47: Attitudes toward advertisements at the theater, by age, May 2006-June 2007
TAKING THE KIDS TO THE MOVIES
Figure 48: Reasons to go to the movies over watching a DVD, by presence of children in household, December 2007
Figure 49: Factors in movie selection, by presence of children in household, December 2007
Figure 50: Impact of children on movie choice, by age, December 2007
Figure 51: Attitudes toward movie going, by presence of children in household, December 2007
Figure 52: Attitudes toward movie theaters, by presence of children in household, December 2007
Figure 53: Attitudes of parents toward childcare at the cinema, by age, December 2007
CUSTOM CONSUMER GROUPS
Frequency of movie attendance
Figure 54: Movie viewing, by medium, and interest in movie-related media in the past six months, by frequency of movie attendance, December 2007
Figure 55: Reasons not to go to the movies, by frequency of movie attendance, December 2007
Figure 56: Reasons for going to the movies over watching a DVD, by frequency of movie attendance, December 2007
Figure 57: Factors in movie selection, by frequency of movie attendance, December 2007
Figure 58: Attitudes toward movie going, by frequency of movie attendance, December 2007
Figure 59: Reasons for going to a theater other than the closest, by frequency of movie attendance, December 2007
Figure 60: Attitudes toward movie theaters, by frequency of movie attendance, December 2007
Age and ethnicity
Figure 61: Movie viewing, by medium, and use of online trailers and websites, by age and race/ethnicity, December 2007
Figure 62: Reasons not to go to the movies, by age and race/ethnicity, December 2007
Figure 63: Reasons for going to the movies over watching a DVD, by age and race/ethnicity, December 2007
Figure 64: Factors in movie selection, by age and race/ethnicity, December 2007
Figure 65: Attitudes toward movie going, by age and race/ethnicity, December 2007
Figure 66: Reasons for going to a theater other than the closest, by age and race/ethnicity, December 2007
Figure 67: Attitudes toward movie theaters, by age and race/ethnicity, December 2007
CLUSTER ANALYSIS—THREE TYPES OF MOVIE CONSUMERS
Insights
Cluster 1—Movie fanatics
Cluster 2— Infrequent movie viewers, but open to all formats
Cluster 3—Homebody TV movie watchers
Figure 68: Movie theater user clusters, December 2007
Figure 69: Viewing frequency, by movie theater user clusters, December 2007
Figure 70: Reasons to go to movie theaters other than the one closest, by movie theater user clusters, December 2007
Figure 71: Reasons for going to the theater instead of watching a movie on DVD, by movie theater user clusters, December 2007
Figure 72: statements agreed with, by movie theater user clusters, December 2007
Figure 73: statements regarding movie theaters agreed with, by movie theater user clusters, December 2007
Figure 74: movie theater user clusters, by gender, December 2007
Figure 75: movie theater user clusters, by age, December 2007
Figure 76: movie theater user clusters, by race, December 2007
Figure 77: movie theater user clusters, by Hispanic origin, December 2007
Methodology
APPENDIX: ADDITIONAL RESULTS BY GENDER
Figure 78: Movie viewing, by medium, and use of online trailers and websites, by gender, December 2007
Figure 79: Attitudes toward movie going, by gender, December 2007
Figure 80: Attitudes toward movie theaters, by gender, December 2007
Figure 81: Reasons not to go to the movies, by gender, December 2007
Figure 82: Factors in movie selection, by gender, December 2007
APPENDIX: RESULTS BY RACE AND ETHNICITY
Figure 83: Movie viewing, by medium, and use of online trailers and websites in the past six months, by race/ethnicity, December 2007
Figure 84: Reasons not to go to the movies, by race/ethnicity, December 2007
Figure 85: Reasons for going to the movies over watching a DVD, by race/ethnicity, December 2007
Figure 86: Factors in movie selection, by race/ethnicity, December 2007
Figure 87: Attitudes toward movie going, by race/ethnicity, December 2007
Figure 88: Reasons for going to a theater other than the closest, by race/ethnicity, December 2007
APPENDIX: OTHER USEFUL CONSUMER TABLES
Figure 89: Movie viewing, by medium, and use of online trailers and websites in the past six months, by household income, December 2007
Figure 90: Reasons for going to the movies over watching a DVD, by household income, December 2007
Figure 91: Factors in movie selection, by household income, December 2007
Figure 92: Attitudes toward movie going, by household income, December 2007
Figure 93: Reasons for going to a theater other than the closest, by household income, December 2007
Figure 94: Attitudes toward movie theaters, by household income, December 2007
APPENDIX: TRADE ASSOCIATIONS

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