Revenue falls are due to attendance declines and lower spending on food and beverages at cinemas
Melbourne, Australia (PRWEB) September 18, 2012
The Cinemas industry in Australia grew strongly during 2008-09 and 2009-10 with the successful launch of 3-D technology across many feature releases and strong attendance growth. However, the industry contracted in subsequent years. Revenue is forecast to fall again in 2012-13, by 2.2% to $1.75 billion. According to IBISWorld Industry analyst Alen Allday, “these falls are due to attendance declines and lower expenditure on food and beverages purchased at cinemas”. Annualised industry revenue growth is estimated at 0.6% in the five years through 2012-13, with strong growth to 2009-10 offsetting falls in the following three years. Despite this volatility, rising movie ticket prices have translated into healthy profit margins for operators as attendance numbers have followed similar patterns to revenue changes. The 3-D cinema experience and new digital effects have helped contain industry falls in the past few years.
Future industry growth is expected to be weak due to increasing competition from digital pay-TV services that air feature films regularly, and DVDs being released in shorter time frames after films have featured at the cinema. Also, the industry is expected to be affected by low attendance numbers and low pricing growth. “Movie piracy and internet releases are also expected to have negative influences on industry performance” Allday adds. In the next five years, industry revenue growth is expected to be low.
The Cinemas industry in Australia has a medium market share concentration level. This level has remained stable in the past five years as demand remains strong for independent cinemas, while rural and regional areas are constrained by geographic influences and continue to account for a large proportion of industry revenue. Moderate market share concentration largely stems from significant vertical integration within the industry. There are some larger firms that are engaged in film production, distribution and cinemas, and with cross-ownership links between industries and with other firms. The concentration level is expected to increase in the next five years as larger firms continue to expand and are able to offer specialist services that smaller cinemas may not be able to supply, such as 3-D films. The three largest players in the industry are Pacific Equity Partners, Village Roadshow, and Amalgamated Holdings.
For more information, visit IBISWorld’s Cinemas report in Australia industry page.
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IBISWorld industry Report Key Topics
The Cinemas industry comprises companies that are involved in screening commercial motion pictures from film or video tape. The industry includes independent and chain operators, and single-screen and multi-screen multiplexes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
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