Higher incomes will draw in moviegoers, but rising online competition will pressure growth
New York, NY (PRWEB) August 31, 2014
The Movie Theaters industry is struggling to bring viewers back to the silver screens. In recessionary 2009, the unprecedented success of Avatar, both in terms of gross box office and higher-priced 3D ticket sales, created a strong jump in revenue during that year, exemplifying the powerful influence of a single blockbuster on industry performance. However, competition from online streaming platforms has drawn moviegoers away from the theaters in the past five years. Sites like Netlfix and Hulu are providing attractive alternatives to viewers' rising disposable income. As a result, IBISWorld expects industry revenue to grow at a weak annualized rate in the five years to 2014.
According to IBISWorld Industry Analyst Darryle Ulama, “External competition from substitute entertainment products and other ways of accessing films, including online video, on-demand services, internet-enabled TVs, smartphones and tablets, has increasingly shifted movie consumption away from theaters.” Lower admissions over the past five years have caused a steady decline in the number of companies, while larger firms have consistently closed underperforming establishments. Operators are concentrating their screens in fewer but larger megaplexes, where costs can be spread over higher admissions and concessions sales. Domestic ticket sales are also rising, further discouraging attendance but boosting revenue, which is expected to grow in 2014.
Exhibitors are also focusing on upgrading their screens and auditoriums with digital projection systems and stadium-style seating, capital investments that are expected to continue over the next five years. “In the five years to 2019, the industry will benefit from rising consumer disposable income, which will encourage consumers to spend on entertainment,” says Ulama. In addition, blockbuster movies, especially those that offer 3D screenings, will be able to temporarily reduce falling admissions. Ultimately, however, IBISWorld anticipates competition from online video access to largely offset these positive trends.
For more information, visit IBISWorld’s Movie Theaters in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises businesses that primarily exhibit movies. It includes cinemas, drive-in and outdoor movie theaters, 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
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.