2006 u.s. theatrical market statistics -...

Worldwide Market Research & Analysis

2006 2006 U.S. Theatrical U.S. Theatrical

Market StatisticsMarket Statistics

2006 U.S. Theatrical Market Statistics

2006 Motion Picture Industry Highlights

The following document provides context and empirical data with respect to box office in 2006.

Average theatrical costs remained fairly flat in 2006 at $100.3 million – a drop in marketing costs offset an increase in negative costs.

In 2006, there was a 5.5% increase in total domestic box office, bringing the total box office to $9.49 billion.

Global box office reached an all-time high with $25.82 billion in 2006, compared to $23.27 billion in 2005, an 11% increase.

U.S. theater admissions grew 3.3% to 1.45 billion tickets, ending a 3-year downward trend.

Box Office

Costs

Advertising expenditures on the Internet jumped up to 3.7% for MPAA member companies.


2006 Motion Picture Industry Highlights

Research conducted by Nielsen Entertainment/NRG in January 2007 found that an overwhelming 80% of moviegoers who saw at least one movie in 2006 believed the experience was one of time and money well spent, versus the 16% who preferred watching on DVD and the 4% who preferred they had not seen the movie at the theater. Nearly half of these moviegoers plan to buy the last movie they saw, with exactly half of them making this decision immediately after seeing the movie.

Research conducted in the summer of 2006 found that people went to movies in the theater more frequently over the prior 12 months than in 2005. Likewise, the proportion of people who never go to the movies dropped in 2006.

African-Americans have the highest admissions per moviegoer with 9.0 movies per year.

Who is Going

Satisfaction

Consistent with past years, PG-13 films comprised the majority of top grossers for the industry, with PG and PG-13 films accounting for 85% of 2006’s top 20 films.

The number of movies released has been steadily growing, with total releases topping another all-time high of 607 versus 549 in 2005, a growth of 11%.

The Movies


U.S. Box Office has rebounded

After a dip in 2005, the U.S. box office has climbed up 5.5% to $9.49 billion.

$9.54$8.99

$9.49$9.52 $9.49

$8.41$7.66

2000 2001 2002 2003 2004 2005 2006

U.S. Box Office (Billions)

Source: MPAA


Worldwide Box Office reaches historic high

Worldwide box office also rebounded in 2006 and reached an all-time high of $25.82 billion – an 11% increase from the previous year.

$23.27$25.82

$20.39

$25.19

$19.77$16.96

2001 2002 2003 2004 2005 2006

Worldwide Box Office (Billions)

Source: MPAANote: Worldwide box office includes the United States.


U.S. Admissions

Theater admissions grew 3.3% in the U.S. in 2006, ending a 3-year decline.

1.54

1.401.45

1.64

1.57

1.49

1.42

2000 2001 2002 2003 2004 2005 2006

U.S. Admissions (Billions)

Source: MPAA


Admissions per CapitaAdmissions per capita remained fairly flat with a 0.2% increase.

Admissions per Capita

Source: MPAA

5.24.8

5.34.7

5.45.7

4.5 4.4 4.85.2

4.8

1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006


Industry Comparisons – Entertainment Options

Movies drew more people than either theme parks or the major professional league sports combined.

2006: Admissions/Attendance Comparison (Millions)

Source: MPAA, PricewaterhouseCoopers

MLB 76.5

NBA 22.0

NFL 17.4

NHL 21.0

Sports

1,448.5

136.9

341.0

Movies Theme Parks Sports


U.S. Box Office

There were 12.5% more films that grossed more than $50 million at the box office in 2006 – 1 film even grossed more than $400 million. Further, the number of movies that made $50 to $200 million grew 19% in 2006.

Number of Films Breaking Benchmarks

Source: Nielsen EDI

Year of Release % ChangeBox Office Range 2006 2005 2006 v. 2005$400 Million & Over 1 0 100.0%$200 to $399 Million 5 8 -37.5%$100 to $199 Million 12 12 0.0%$50 to $99 Million 45 36 25.0%TOTAL 63 56 12.5%


Films Released in the U.S.The total films released in 2006 increased by 11% from 2005 driven by new film releases, which grew 12%.

Source: MPAA

Feature Films Released in the U.S.

New Releases Reissues

Year MPAA% of Total

All Other Distributors

% of Total

Total New Releases

MPAAAll Other

DistributorsTotal New Reissues

2006 203 34% 396 66% 599 1 7 82005 190 36% 345 64% 535 4 10 142004 199 42% 275 58% 474 1 7 82003 194 42% 265 58% 459 4 10 142002 220 49% 229 51% 449 5 12 17

549466471 482473607

449 474 535420

599459

8 1451 17 14 8

1996 2002 2003 2004 2005 2006

Total New Releases Reissued

Number of Films Released


Top Films & Ratings

In 2006, 13 of the top 20 grossing films were rated PG-13. PG and PG-13 films account for 85% of 2006’s top 20 films.

Source: MPAA, Nielsen EDI

Top 20 GrossingYear G PG PG-13 R2006 5% 20% 65% 10%2005 5% 25% 60% 10%2004 5% 25% 55% 15%2003 5% 15% 60% 20%2002 5% 30% 65% 0%

2006 TOP GROSSING FILMS

Rank Title DistributorBox Office (Millions)

Rating

1 Pirates of the Caribbean: Dead Man's Chest Buena Vista $423.3 PG-132 Cars Buena Vista $244.1 G3 X-Men: The Last Stand Fox $234.4 PG-134 Night at the Museum Fox $218.6 PG-135 The Da Vinci Code Sony $217.5 PG6 Superman Returns Warner Bros. $200.1 PG-137 Ice Age: The Meltdown Fox $195.3 PG8 Happy Feet Warner Bros. $192.1 PG9 Casino Royale Sony $165.5 PG-1310 Over the Hedge Paramount $155.0 PG11 The Pursuit of Happyness Sony $154.3 PG-1312 Talladega Nights: The Ballad of Ricky Bobby Sony $148.2 PG-1313 Click Sony $137.4 PG-1314 Mission: Impossible 3 Paramount $134.0 PG-1315 Borat Fox $127.9 R16 The Departed Warner Bros. $126.3 R17 The Devil Wears Prada Fox $124.7 PG-1318 The Break-Up Universal $118.8 PG-1319 Scary Movie 4 TWC $90.7 PG-1320 Dreamgirls Paramount $88.7 PG-13

PG-1365%

R10%

G5% PG

20%

13 films

2

2006 Top 20 Films by Rating

14

Includes box office data as of February 2007


MPAA Member Companies Average Theatrical Costs

Since 2003, average theatrical costs of MPAA member companies were down 5.5% overall. From 2005 to 2006, negative costs were up 3.4% and marketing costs decreased by 4.4%. In absolute numbers, average negative and marketing costs hit their peak in 2003.

Source: MPAA

$65.7 $63.6 $65.8

$34.8 $36.1 $34.5

$47.8$66.3

$30.4

$39.5

2002 2003 2004 2005 2006

MarketingCostsNegativeCosts

Note: MGM data is no longer collected – historical figures have been adjusted to reflect this omission.

$78.2

$105.8 $100.5 $99.7 $100.3

Mill

ions


MPAA Member Subsidiary/Affiliate* Average Theatrical Costs

Average theatrical costs for member subsidiaries grew 22.7%. Negative costs were up 28.9% while marketing costs were up 13.2%.

Source: MPAA

$29.0$23.5

$30.7

$11.4$15.2

$17.8

$34.0$46.9

$11.4

$15.1

2002 2003 2004 2005 2006

MarketingCostsNegativeCosts

* Subsidiaries include studio “classics” and specialty divisions such as Fox Searchlight, Miramax, New Line, Sony Pictures Classics, etc.

$45.4

$62.0

$40.4 $38.7

$48.5

Mill

ions


MPAA Member Company Distribution of Advertising Costs by Media

The distribution of advertising expenditures among member companies on the Internet grew to 3.7% from 2005 to 2006.

Source: MPAA

% of Total

Year Avg $ (Millions)

NewspaperNetwork

TVSpot TV

Internet/Online

TrailersOther Media

OtherNon-Media

2006 $30.71 10.8% 21.2% 13.9% 3.7% 4.3% 24.4% 21.6%2005 $32.35 12.7% 23.1% 12.8% 2.6% 4.4% 22.4% 22.0%2004 $30.96 12.9% 23.0% 13.2% 2.4% 7.6% 22.2% 18.9%2003 $34.34 14.0% 23.0% 15.6% 1.4% 4.5% 21.9% 19.5%2002 $27.13 13.6% 22.8% 17.5% 0.9% 4.6% 21.7% 18.8%

Other Media includes:• Cable TV• Radio• Magazines• Billboards

Other Non-Media includes:• Production/Creative Services • Exhibitor Services• Promotion & Publicity• Market Research

Spot TV14%

Internet/ Online

4%Trailers

4%

Network TV21%

Newspaper11%

Other Non-Media22%

Other Media24%

Note: MGM data is no longer collected – historical figures have been adjusted to reflect this omission.


Frequency of MoviegoingMoviegoers went to the movies more frequently in 2006 – the % of people who never or infrequently attend movies fell.

28%

25%

28% 28%

24%

35%34%

36% 35% 34%

11%11%13% 13%11%

26%

27%

26%

29%

24%

5%

10%

15%

20%

25%

30%

35%

40%

2002 2003 2004 2005 2006

Frequent Occasional Infrequent Never

Frequency of Moviegoing2002-2006

Frequent = at least once per month (12x/year)

Occasional = at least once in six months (2-11x/year)

Infrequent = less than once in six months Yearly totals represent data from mid-July to mid-July of the following year – not calendar years

Source: MPAA


EthnicityWhile each ethnic group experienced some change in 2006, the total public average admissions per moviegoer stayed static at 7.6 movies per person per year.

7.87.3

9.8

7.07.6 7.68.0

7.1

8.89.0

African-American

Other Hispanic Caucasian Total Public

Admissions per Moviegoer by Ethnicity

Note: Survey is conducted only in English

Yearly totals represent data from mid-July to mid-July of the following year – not calendar yearsSource: MPAA

2006

2005 20

06

2005

200620

05

2005

2006

2005

2006


When they choose to go, Moviegoers like the Experience

The vast majority of moviegoers say their overall theater experience is time and money well spent.

Satisfaction with theater experience at last movie

Source: Nielsen Entertainment/NRG


The Movie-Watching ExperienceAbout two-thirds of respondents still feel that the theater offers the ultimate movie-watching experience. Of the segments, younger males are the most likely to prefer the theater experience.

What is the ultimate movie-watching experience?


Theater63%

Theater78% Theater

63%

Theater69% Theater

55%

Home37%

Home22% Home

37%

Home31% Home

45%

TOTAL M<25 M 25+ F<25 F 25+


The High-Tech Household

Those moviegoers who own or subscribe to four or more home technologies were actually more avid moviegoers, seeing an average of three more movies per year than the moviegoer who owned or subscribed to fewer than four.


MOVIEGOERS WHO OWN OR SUBSCRIBE TO 4+ TECHNOLOGIES (22%)

Avg. Movies/Yr = 10.5

MOVIEGOERS WHO OWN OR SUBSCRIBE TO <4 TECHNOLOGIES (78%)

Avg. Movies/Yr = 7.1

Worldwide Market Research & Analysis

AppendixAppendix


Box Office

Source: MPAA

Box Office GrossYear (Billions) Prev. Period 20062006 $9,487.8 5.5% -2005 8,991.2 -5.7 5.5%2004 9,539.2 0.5 -0.52003 9,488.5 -0.3 0.02002 9,519.6 13.2 -0.32001 8,412.5 9.8 12.82000 7,660.7 2.9 23.91999 7,448.0 7.2 27.41998 6,949.0 9.2 36.51997 6,365.9 7.7 49.01996 5,911.5 7.6 60.51995 5,493.5 1.8 72.71994 5,396.2 4.7 75.81993 5,154.2 5.8 84.11992 4,871.0 1.4 94.81991 4,803.2 -4.4 97.51990 5,021.8 -0.2 88.91989 5,033.4 12.9 88.51988 4,458.4 4.8 112.81987 4,252.9 12.6 123.11986 3,778.0 0.8 151.1

% Change vs.


Admissions

Source: MPAA

Admissions Year (Millions) Prev. Period 20062006 1,448.5 3.3% -2005 1,402.7 -8.7 3.3%2004 1,536.1 -2.4 -5.72003 1,574.0 -4.0 -8.02002 1,639.3 10.2 -11.62001 1,487.3 4.7 -2.62000 1,420.8 -3.0 1.91999 1,465.2 -1.0 -1.11998 1,480.7 6.7 -2.21997 1,387.7 3.7 4.41996 1,338.6 6.0 8.21995 1,262.6 -2.3 14.71994 1,291.7 3.8 12.11993 1,244.0 6.0 16.41992 1,173.2 2.9 23.51991 1,140.6 -4.0 27.01990 1,188.6 -5.9 21.91989 1,262.8 16.4 14.71988 1,084.8 -0.3 33.51987 1,088.5 7.0 33.11986 1,017.2 -3.7 42.4

% Change vs.

Note: 1989 to present based on NATO average ticket price


Average Annual Admission Price

Source: MPAA, Bureau of Labor Statistics

Note: NATO average ticket price based on a survey by Goodman & Company and reflects average price paid for all admissions to movie theaters, inclusive of first run, subsequent runs, senior citizens, children, and all special pricing.

Year Prev. Period 2006 vs.2006 $6.55 2.2% - 3.2%2005 6.41 3.2 2.2% 3.42004 6.21 3.0 5.5 3.32003 6.03 3.8 8.7 1.92002 5.81 2.7 12.7 2.42001 5.66 4.9 15.8 1.62000 5.39 6.1 21.5 3.41999 5.08 8.3 28.9 2.71998 4.69 2.3 39.6 1.61997 4.59 3.9 42.8 1.71996 4.42 -- 48.3 3.3

% Change CPI

% ChangeAvg. Annual Admission Price (USD)


Industry Comparisons – Entertainment Options

Going to the movies remains an affordable outing for most families – with admission prices significantly lower than alternative entertainment options.

2006: Average National Ticket Price Comparison

Source: MPAA, PricewaterhouseCoopers

2006 2005*

Event

Admission Price

(1 Ticket)

Cost for Family of

Four

Admission Price

(1 Ticket)

Cost for Family of

Four

% Change 2006 vs.

2005Football Game $61.60 $246.40 $58.95 $235.80 4%Basketball Game $46.00 $184.00 $45.28 $181.12 2%Hockey Game $41.20 $164.80 $44.55 $178.20 -8%Theme Park $34.21 $136.84 $33.57 $134.28 2%Baseball Game $22.40 $89.60 $21.17 $84.68 6%Movie $6.55 $26.20 $6.41 $25.64 2%

* 2005 data updated by source; 2004 data used for NHL due to cancellation of ’04-’05 season.

2006 u.s. theatrical market statistics -...

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