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Chinese Movies & Entertainment Market, one of the fastest growing in the world
Reflecting the economic downturn, the movies & entertainment market has performed poorly in recent years. Historically, this market has thought to have been recession-proof: in 1929, after the stock market crash, box office revenues rose by 58.2% compared to the previous year. However, the rise in cinema ticket prices may be accountable for this. Average US ticket prices have been rising since 1992, often at a greater rate than inflation. Production and marketing costs have been pushed up by Hollywood studios’ shift to blockbuster films.
The global movies & entertainment market grew by 0.6% in 2011, to reach a value of $90.1 billion, representing a compound annual rate of change of -1.8% for the period spanning 2007-2011. The very weak growth was primarily a result of strong growth in China, South America and Eastern Europe, helping to slightly offset the decline experienced in the large US and Western Europe markets. The US is the largest market by far, revenues of $29.6 billion in 2011. The on-going decline experienced in this country has continued to drag down global growth rates. The Western European market experienced decline in 2011, compared to the strong growth experienced in Eastern Europe. Eastern European growth was primarily driven by strong growth in the region’s two largest markets, Russia and Poland.
The Chinese movies & entertainment market is one of the fastest growing in the world. This is primarily due to the significant growth experienced in the box office category, which currently accounts for over 90% of total revenues. The Chinese market is increasingly considered a major market. For example, with the recent release of Titanic 3D, box office records were broken with takings of $58m, compared to the $44.5m taken in two weeks in North America. The number of cinemas in China has more than doubled since 2008. Wanda Group, a Chinese cinema chain, is set to become to the world’s largest, as it recently announced that it had bought the US and Canada’s second largest cinema chain, AMC. Through a deal worth $2.6bn, Wanda has access to the company’s 5,000 screens at 346 multiplexes, and 18,550 staff. Despite audiences falling in many regions, the increase in ticket prices has slightly offset the effect of this. Digital 3D screens have grown exponentially since 2007, growing from 1,297 to 35,479, an increase of 2,635.5%. The smaller markets of Latin America and Asia-Pacific experienced much stronger growth, however, of 16,783% and 10,045%, respectively. Although the number of 3D tickets sold decreased by 3% in 2011, 3D box office revenues are valued at $1.8bn, an increase of 1,594% over the $0.1bn revenues of 2007. Digital screens are growing rapidly.
Global cinema screens including analog, digital non-3D and digital 3D, increased by 3% in 2011, although double digit growth was seen in Asia-Pacific. However, digital cinema screens alone have grown at a rate of up to 79%, making nearly half of the world’s screens digital.