Box officerevenues in the US are predicted to pass $10bn for the first time ever in 2006,according to a new report from analysts Dodona Research.

This figurecompares with $8.7bn in ticket revenue for 2003 and is expected to grow to$11bn by 2008. Most of the gains will come from higher ticket prices ratherthan increased attendance.

By 2008, 1.56 billionAmericans are expected to attend cinemas, compared to 1.43 billion in 2003, butthey will be paying $7.05 for the privilege one dollar more than the averageticket price in 2003.

Despite a smalldrop in admissions in 2003 masked by higher ticket prices Americans stillattended cinemas on average of 5.04 times each, the second highest total in the multiplex erabehind 5.27 in 2002. In Canada film-goers visited the cinema on average 3.95times a year.

The report,called Moviegoing 4, noted that people in the older demographic visited theatresrelatively frequently, with 40-49 year-olds going on average 4.6times each in 2002 and the over-60s managing 2.7 visits. After the overbuildingtrend that plagued the exhibition sector in the late 1990s it was widelyexpected that the number of cinema screens in operation would fall backsharply.

However most ofthe nearly 10,000 screens added to the 1995 total of 27,805 were stilloperating by 2000. Of this amount approximately 2,000 screens closed in2001-2002, while 2003 saw the number of screens rise slightly.

Much of theindustry has changed owners since the wave of Chapter 11 filings around theturn of the decade, with the strategies of newer investors focusing mainly onconsolidation.

In 2003 the top10 North American circuits operated a total of 19,836 screens, more than twicethe 9,659 screens they operated in 1996.

While thesecircuits invested heavily in new cinemas over the period, much of this growthcame from big acquisitions, before as well as after the Chapter 11 crisis.

Digitalconversion is taking its time but it expected to take root within the next fiveyears. By way of a cost example, the report said the Regal circuit would haveto spend $600m to update its theatres at a cost of $100,000 per screen.

"In the end,adding value is going to mean turning theatrical exhibition back into a growthbusiness," report author Karsten Grummitt said in a statement. "Stadium seatinghas had its day: digital could be one way to excite consumers again."