Despite falling attendance, concessions sales are helping maintain healthy profit margins.
New York, NY (PRWEB) April 18, 2014
The Movie Theatres industry has grown during the past five years, with performance largely dependent on the success or failure of major film releases. Although per capita disposable income directly influences households' ability to spend on dictionary services such as movies, the marketing efforts and popularity of blockbuster films strongly determine revenue for a given year. For example, 2009's Avatar was able to offset lower discretionary spending, pushing the industry into one of its most successful years. Cineplex, the industry's dominant player, also drives industry performance, as it claims more than 70.0% of the Canadian market. According to IBISWorld Industry Analyst Darryle Ullama, “In the five years to 2014, industry revenue is expected to grow at an annualized rate of 2.0% to $1.7 billion, including 2.1% growth in 2014 alone.”
Movie attendance has flattened overall in recent years, due mostly to the growing popularity of video-on-demand streaming services. While this source of competition is somewhat limited in Canada by the bandwidth caps of most internet service providers, it still presents a way for consumer to access film content from home at little cost. “Exhibitors have been combating falling attendance by focusing on concessions and other revenue streams that are typically more lucrative than ticket sales, which are often split with distributors as a part of film-licensing agreements,” says Ullama. Concessions sales have helped the industry maintain healthy profit, which is estimated at 6.3% of industry revenue in 2014.
During the next five years, exhibitor revenue will continue to depend on films' ability to draw attendance. The anticipated release of certain films, such Star Wars Episode VII and Jurassic World (currently scheduled for 2015), are expected to drive strong ticket sales. Meanwhile, the consolidation trend toward larger multiplexes is forecast to persist throughout the five years to 2019. As major players like Cineplex upgrade theatres and add amenities, independent venues unable to compete will exit the industry entirely. In the five years to 2019, industry revenue is projected to increase.
For more information, visit IBISWorld’s Movie Theatres in Canada industry report page.
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IBISWorld industry Report Key Topics
The Movie Theatre industry comprises businesses that primarily exhibit movies. It includes cinemas, drive-in and outdoor movie theatres, and film festival exhibitors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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