According to the UK Film Council's Statistical Yearbook for 2006/07, cinema attendance in the UK fell 5% last year, compared to 2005. Monthly admissions throughout the year fell below 10m on three separate occasions - which has not happened since 2000 - with March, June and August seeing sharp dips.
The year opened positively as the box office reaped in the residual takings of King Kong and The Chronicles Of Narnia. Falls in February and March were saved by April's release of Ice Age: The Meltdown.
June was down as distributors avoided releasing major titles due to the World Cup and Pirates Of The Caribbean: Dead Man's Chest boosted attendance in July - the month saw an average of 3.7m tickets sold per week. Casino Royale's November release impacted the end 2006 positively with weekly admissions at 3.6m throughout the month.
But UK Film Council Head Of Research and Statistics David Steele indicated that a likely increase in admissions in 2007 would save last year's attendance dip.
He said: 'In 2007, admissions are likely to be up with the release of major productions such as the new Harry Potter instalment and could reach 160m.'
And there are still indicators that the UK will remain the world's third largest market, (trailing just the US and Japan).UK revenue is already up 8% year-on-year for the first half of 2007.
The report also found that 2006 box office takings were at $1.55bn (£762m), down 1% on 2005 but up by a whopping 56% in the last 10 years. The top 10 performing UK films worldwide grossed $1.96bn - down 25% on 2005 and British films accounted for 12% of the releases in the US, the same figure as 2005.
British audiences benefited from of a wider array of film choice in 2006 - 505 films were released in the UK, up 8% on 2005 and a whopping 54% compared to 1998. One in five of these was a UK production.
UK Film Council CEO John Woodward said the British film industry was strong and in good health.
'Film remains one of the most popular forms of entertainment [in the UK],' he said. 'Exports are up, UK films are winning top awards and British creative talent including writers, directors and actors are in demand around the world and achieving great success.
'However there are a number of challenges ahead particularly the opportunities offered by the new digital world which requires the film industry to work in new ways; the growing threat of piracy, particular online piracy; and increasing competition from abroad.'