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State of the Screens

Box Office Will Plunge 50% Due to Coronavirus Closures, Analyst Predicts

By June 4, 2020No Comments

U.S. movie ticket revenue (YoY growth) according to Box Office Mojo:
1) 
2010 – $10.6B
2) 2011 – $10.2B  (↓ 4%)
3) 2012 – $10.8B  (↑ 7%)
4) 2013 – $10.9B  (↑ 1%)
5) 2014 – $10.4B  (↓ 5%)
6) 2015 – $11.1B  (↑ 7%)
7) 2016 – $11.4B  (↑ 2%)
8) 2017 – $11.1B  (↓ 3%)
9) 2018 – $11.9B  (↑ 7%)
10) 2019 – $11.3B  (↓ 5%)
11) 2020P – $5.5B (↓ 51%)
12) 2021P – $9.7B (↑ 76%)

Big question #1: Who buys movie tickets, and when will they return to theatres?

Movie tickets sold by age group (h/t: Matthew Ball):
1) 25-39 – 25%
2)
 60+ – 15%
3)
 40-49 – 15%
4)
 18-24 – 13%
5)
 50-59 – 11%
6)
 12-17 – 11%
7)
 2-11 – 10%

Share that said attending a big event “will scare me for a long time” according to Performance Research & Full Circle Research:
1) March – 44%
2) May – 60%

Upcoming major releases, according to LightShed Partners:
1) Tenet (Warner Bros – 7/17)
2) Mulan (Disney – 7/24)
3) The SpongeBob Movie (Paramount – 8/7)
4) The Wonder Woman, 1984 (Warner Bros – 8/14)
5) The New Mutants (Disney/Fox – 8/28)

Quick math on the potential impact for major releases:
1) Indoor movie theatres – 5,500
2) Individual movie screens – 40,613
3) Seats/screen – 150 – 750 (≈ 615)
4) Total seats in all theatres – ≈ 25M
5) Average ticket price – $9.15
6) Tickets needed for $1B – 109M
7) Tickets sold per seat for $1B – 4
8) Tickets sold per seat w/ 25% reduction – 6
9) Tickets sold per seat w/ 50% reduction – 9

Big question #2: How much would consumers be willing to pay to watch first-run releases at home?

The price consumers are willing to pay to watch first-run releases at home according to Performance Research & Full Circle Research:
1) $10 – 47%
2) $20 – 20%
3) Free – 19%
4) 
$30 – 6%
5) 
$40+ – 6%
6) Other – 2%

Big question #3: How much revenue do movie theatres generate from concessions?

Typical markup (% of total) for movie theatre popcorn according to The Hustle:
1) Cost (COGS) – $0.90 (11%)
2) Markup (gross profit) – $7.10 (89%)
3) Retail price – $8.00

Movie theatre inflation since 1929:
1) Ticket prices – ↑ 108%
2) Popcorn – ↑ 1,188%

Share of revenue that movie theatres share with studios:
1) Ticket sales – 70%
2) Concessions – 0%

More #1: Why Is Comcast Declaring War on Movie Theaters? Simple — They Want Wall Street To Value Them Like A Tech Titan

More #2: AMC Theatres Won’t Play Universal Movies in Wake of ‘Trolls World Tour’ Dispute

More #3: Korean Box Office Has Yet to Find Post-Coronavirus New Normal

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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