the box office is now closed
The NYTimes published a great story last week on some research by Adams Media Research on the revenue breakdown of movies. From each of the follow delivery mechanisms, studios earned :
The percentage revenue take box office does come close to Edward Jay Epstein’s own analysis that in Q1 2005, only 14% comes from box office revenue. A decline in that category is made by strong DVD sales in the last 12 months.
Even with the expected slowdown of DVD sales growth (due to competition from DVDs of TV series and old movies for same physical shelf-space), that breakdown should still be similar. A boffo summer 2006 box office may improve that slice of the pie slightly especially come end of this year, since it’s becoming the norm that a movie’s theatrical release is just marketing for the eventual DVD release.
Moreover, the war of competing high definition DVD standards (HD-DVD vs Blu-Ray) will end up hurting high-def DVD sales, since sales of high-def DVD players will not expand past early adopters until there is a winner.
| $17.26 | DVD | 63.0% |
| $2.37 | Movies on Demand | 8.7%% |
| $2.25 | DVD rented | 8.2% |
| $2.00 | Pay TV | 7.3% |
| $3.5 | Box Office Sales | 12.8% |
The percentage revenue take box office does come close to Edward Jay Epstein’s own analysis that in Q1 2005, only 14% comes from box office revenue. A decline in that category is made by strong DVD sales in the last 12 months.
Even with the expected slowdown of DVD sales growth (due to competition from DVDs of TV series and old movies for same physical shelf-space), that breakdown should still be similar. A boffo summer 2006 box office may improve that slice of the pie slightly especially come end of this year, since it’s becoming the norm that a movie’s theatrical release is just marketing for the eventual DVD release.
Moreover, the war of competing high definition DVD standards (HD-DVD vs Blu-Ray) will end up hurting high-def DVD sales, since sales of high-def DVD players will not expand past early adopters until there is a winner.
posted by KW at 6:12 PM
2 Comments:
I have been out of the loop on the movie industry for a while but at first sight it seems to me that the reason for the box office numbers being that low may be that in the last few years, studios have consolidated/acquired bigger movie catalogs for the distribution of DVDs and at the same time they are increasingly picky about the number of new releases (kind of the 'long tail' of content thesis). True, a movie's revenues tended to depend almost exclusively on theatrical release. Today movies have a different lifecycle, yet box office sales are key to good DVD (and other) performance (where the rest of the pie comes or will come from). Lots of industries would love to have 12.8% of 'new product revenue' year over year. In other words, I believe these numbers do not necessarly mean that the box office is 'closed'. Am I way of base? Again, I am more into other new media, not movies, but these are my $0.02
Happy to be illuminated on the matter.
Cheers
Adrian
Thanks for being my 1st commenter.
2 points:
1) box office numbers 2006 is on its way to best that of 2005 - based on this summer's numbers. However, this could be because tix prices are higher.
2) 12.8% new product revenue looks good on its own until you start looking at staggering movie production costs (ie Superman Returns).
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