Update on the global movie market at the British Screen Advisory Council’s annual conference also claimed that box office remains the major driver of revenues for US studios; older audiences are increasingly important; and physical media remains ahead of digital - for now.
This year’s conference of the British Screen Advisory Council featured an upbeat assessment of the global movie market from leading media analyst Ben Keen.
Speaking at the annual event at London’s Royal Institution, Keen (chief analyst and vp media at IHS) unveiled figures underlining the underlying health of the international film industry - debunking some long held myths in the process.
Production levels are continuing to rise in most parts of the world, in spite of the belief held by many that the international film industry is in crisis.
“What do the numbers show? Globally, production levels are rising almost every year,” Keen said. The US studios have cut back in their output but the independents are making up for the shortfall.
Box office remains key
Meanwhile, box office remains the major driver of revenues for the US studios in spite of anxiety about the “theatrical window” in an era of multiplatform releasing.
In the US, box-office growth may be “relatively flat,” but international box-office, driven by emergent markets like China, has soared.
“We’ve seen rising ticket prices everywhere. We’ve seen the growth of digital and 3D pushing up ticket prices,” Keen said.
Despite the widely held belief that exhibitors are innately conservative, the last 11 years have seen a huge transformation in their practices. A total of 87% of all global screens are now digital and Keen forecast that “celluloid…will be a thing of the past” by the end of 2015.
Keen disputed the often-repeated idea that “the Hollywood majors are ever more dominant,” pointing out that the non-US share of local box office across the world has been “growing solidly”.
“In the key growth markets, particularly countries like India and China, US share is particularly low,” the analyst continued.
“Even in the US market, we have seen the tremendous performance from a range of independent studios actually taking share from the majors.”
In 2013, the six leading independents (led by companies like Lionsgate and The Weinstein Company) took 20% of the US box-office. “The scary thing is that the rest of the independent studios were left with less than 5% of that market,” added Keen.
Another myth Keen set out to scotch was the notion that cinema was “all about the teenage market”. In the UK, for example, 56% of the cinema audience is now aged 35 or over.
Keen cited statistics showing that non-movie “alternative content” is in target to generate $1bn annually in box office by 2017.
Alternative content last year in the UK is reckoned to have generated more than £20m ($33.5m) - a figure that would place it “higher than the number 14 ranked movie”.
Physical remains ahead of digital
In spite of the problems at retail outlets like Blockbuster and HMV, Keen pointed out that global “consumer spending on physical” home entertainment still outstripped spending on digital.
“Transactional spending on film and TV content - 70% of it still went on bits of plastic.”
Keen acknowledged that a “40% hole in revenue” is expected as spending on physical home entertainment declines in the 2012 to 2017 period.
VoD on the rise
The analyst disputed the idea that the ongoing digital revolution is taking place faster in the US than elsewhere.
“The reality is that digital purchase and rental of movies is happening faster internationally…than in the US market. Why? Because there are so many more platforms internationally, particularly on the pay TV side.”
While pointing to the rapid growth of Netflix in the US and internationally, Keen cautioned “there are right now very few other successful examples of similar services out there.”
The hope that SVOD will become a huge new global marketplace is therefore misplaced, at least in the short term. He also noted that streaming subscription services which may have started “with a strong emphasis on movie content” are tending to become much more preoccupied with TV content. An estimated 80% of Netflix US consumption is of TV content, not movies.
UK remains strong
Recent data underlined the continuing strength of the UK in the global film market.
Keen pointed out that the UK is still at number three - behind the US and Japan - in the rankings of the world’s top 25 movie markets as measured by all spending on movies on every platform. This was the position the UK also held in 2008.
The most dramatic changes in these rankings have come from China, which has leapt from 14th in the list to 4th and Russia, which has also risen sharply.