Teenagers and young adults are buying fewer cinema tickets while older folks are going to the movies more often.
While the overall volume of theatrical releases is escalating year-on-year, the Hollywood studios collectively have slashed their output.
However the top 50 titles continue to take a dominant share of the BO, meaning it is harder than ever for hundreds of independent films to secure and hold screens.
These are among the key findings of an extensive study of cinemagoing in the US and UK released this week by UK-based researcher Stephen Follows.
Given the similarity in markets, it’s fair to extrapolate at least some of those trends to the Australian cinema industry.
Echoing European exhibitors’ worries about the decline in younger moviegoers, Wallis Cinemas consultant Bob Parr tells IF: “I am concerned in the drop-off in youth attendance because we need the habit of going to the movies to start young. They are the most distracted of demographics because of electronic games, internet, streaming etc.
“We must try new things of course, and not give up, but perhaps we have to go harder to get them when they are in their twenties.
“The older demographic is increasing but could grow a lot more if there were more titles aimed at them. They will go once a week but often find there is nothing for them to see.”
Hoyts CEO Damian Keogh observes that moviegoing among teens and young adult held up well last year but there was a dip in family audiences.
Keogh tells IF: “As cinema operators we are facing the most significant challenges we’ve had in some time including digital disruption; most of our cinemas being in shopping centres which are being affected by online shopping; and ticket discounting.
“If as an industry we think we can rest on our laurels and young people will continue to go to the cinema without offering them a great experience we are sadly mistaken.”
BO stats for 2017 are yet to be released by the Motion Picture Distributors Association of Australia (MPDAA) but there will be a slight drop on the record 2016 total of $1.259 billion.
However MPDAA general manager Lori Flekser points out the rolling average of grosses for 2015-2017 is ahead of the previous three years. She says: “Cinemagoing is still one of the most popular forms of entertainment in this country and, despite economic flux and in the face of ever increasing leisure options, remains resilient.”
The MPDAA’s research shows 61 per cent of Australians go to the cinema more than 5-10 times a year and, since 2016, the average number of visits per year has risen, driven by those people who go frequently (once a month or fortnightly or more).
The organisation does not survey ticket buying by people aged under 17 but it finds that 77 per cent of 18 to 29-year-olds go more than 5-10 times a year.
Overall, Hoyts increased its market share and total grosses last year thanks to hefty investment in new builds and refurbishment. That’s despite the market decline which Keogh estimates at about 6 per cent as a rolling 52-week average through yesterday.
The industry-wide declines were most marked in WA (down 11.5 per cent) and South Australia (10 per cent) but less pronounced in NSW (6 per cent) and Victoria (2.7 per cent).
Keogh predicts increased competition as the major chains plus Palace and Reading continue to add screens over the next five years, resulting in a 10 per cent-15 per cent jump in the overall number of screens.
Follows’ study revealed young people represent a smaller share of cinema audiences. In the US, cinemagoers aged between 12 and 24 bought 34 per cent of tickets in 2009 but by 2016 this had declined to 29 per cent. Similarly in the UK, 15 to 24-year-olds bought 35 per cent of tickets in 2011, which fell to 29 per cent in 2016.
“This trend is worrying many, none more so than cinema owners who have long relied on packs of these easy-to-please, sugar-filled, high-spending customers,” he observes.
Conversely the 55-plus segment of UK cinema attendees grew by a third between 2008 and 2015, due to a number of factors including the ageing baby boomer generation, longer life expectancy, increased mobility among retirees and a generation raised on cinema trips.
In 2016 there were 736 films released in US cinemas, twice the number in 2000. In Australia last year there were 651 releases, up from 308 in 2006.
In the US the top 50 movies each year account for around three-quarters of the annual box office revenue, meaning the remaining 650-odd movies are competing for the other 25 per cent.
“So it’s now harder than ever for an independent film release to get noticed and recoup its costs,” Follows says.
The number of wide releases from the six Hollywood studios in the US plunged from 128 in 2006 to just 93 in 2016, reflecting Hollywood’s reliance on big budget tentpoles.
Attesting to the rising value of international markets, in the early 1990s the average studio movie earned 35 per cent of its total worldwide box office in the domestic market. By 2016, international generated 63 per cent of the worldwide gross.
Follows sees this trend as a double-edged sword, opining: “This increasing dependence on international revenues is affecting Hollywood’s creative decision-making. Some effects are gentle (such as focusing on stories which will translate well to other cultures and languages), while others are more worrisome (such as the influence on the representations of China and the Chinese government).”