Admissions in Italy slipped by just 1.92% in 2003, but the drop has worried industry observers as it comes in spite of the fact that 182 new screens were built in the country last year.
According to data released by Cinetel, which monitors around 75% of cinemas nationwide, Italian cinemas recorded 87.4m admissions in 2003 compared to 89.1m in 2002.
A report published by Il Giornale dello Spettacolo, the Italian trade owned by national entertainment body AGIS, suggested that admissions failed to take off because new screens are being built in the wrong places.
Other reasons cited by Il Giornale dello Spettacolo include "the too short" theatrical distribution season, which is still concentrated between September and May, and the fact that "there is an irrational policy which sees a multitude of titles released within a few weeks, and lengthy periods without any releases at all."
The report also highlights the fact that while there were four Italian titles in the year's top 10, other local films failed to make a mark at the box office whatsoever.
Gianantonio Furlan, head of the national exhibitors' association's Gruppo Multicinema, said the situation can be resolved through greater collaboration between producers, distributors and exhibitors.
"We need massive investments to build new cinemas and to reinforce specialised, small, centrally-located cinemas," Furlan said.
He added: "We also have to make sure that cinemas receive all the prints they need, that the market is spread out over 12 months, that Italian film production continues to grow and that the most popular titles aren't just released at Christmas."
Cinetel's top 10 grosses of 2003.
Lord of the Rings: The Two Towers (NZ)- Euros 20.615 m
Finding Nemo (US)- Euros 17.186 m
Pirates Of The Caribbean (US) - Euros 16.928 m
Natale In India - (It) Euros 16.017 m.
Matrix Reloaded - (US) Euros 14.542 m
Bruce Almighty - (US) Euros 14.129 m
Il Paradiso All'improvviso - (It) Euros 11.489 m
Facing Windows - (It) Euros 10.807 m
Matrix Revolutions - (US) Euros 10.924 m
Remember Me - (It) Euros 10.276 m