So the industry was on the brink of disaster, with theater admissions lower in 2011 than in 2002. A veritable Damsel in Distress. But demonstrating once again that it is sometimes better to be lucky than smart, a cavalry rode to the film industry's rescue at the last minute - and it turned out to be the 1.3 billion people of China.
With rising incomes, a new-found interest in popcorn and the addition, on average, of eight new screens a day, China is a force in film. Global admissions may soon be a more important bellwether of film success than the US box office, which has reigned supreme since talkies emerged and silent films ankled.
In yet another piece of impeccable timing, the new Chinese government leader, in his goodwill introductory tour of the US, met with the big studios' executives and signed an historic agreement to support film production in his country. Though touted as a significant market opening opportunity, the recent box office data reveal this to be what many had suspected: a capitulation by the industry in return for financing. The Chinese audience was already there when the agreement was signed. The studios knew it and so did the Chinese government.
It remains to be seen what impact this will have on selection of titles, locations, talent and technology transfer but the guessing it is it will not be leading to an increase of American jobs or industry profits. JL
Matthew Garrahan reports in the Financial Times:
US cinema admissions, which have fallen sharply over the past decade, dipped again in 2011 although sharp growth in international markets, particularly China, kept Hollywood growing, according to the Motion Picture Association of America.
There were 1.28bn cinema admissions in the US and Canada in 2011, compared with 1.57bn in 2002.
Box office revenues fell 4 per cent to $10.2bn compared with 2010 while revenues from 3D movies slumped 18 per cent, or $400m, as audiences rejected higher prices and less appealing films.
But the surging growth of China and other developing markets lifted total global box office revenues by 3 per cent to $32.6bn.
“China is adding eight new screens a day and 75 new Imax screens this year,” said Chris Dodd, the former Democratic senator who is the MPAA’s chairman. China has lifted the number of US-made films it will allow to be screened in its cinemas, which Mr Dodd said was “a great opportunity for the US film industry”.
Mr Dodd revealed that the heads of the six big Hollywood studios had met Xi Jinping, China’s vice-president and heir apparent, as part of negotiations to expand the quota of US-made films.
Several Hollywood studios have struck joint-venture deals with Chinese partners to ensure their movies qualify for distribution in China, while DreamWorks Animation, the company behind the Shrek and Kung Fu Panda movies, is building a production facility in Shanghai with state-owned media companies.
International box office revenues rose 7 per cent in 2011, thanks to China, which rose 35 per cent, and Russia, the MPAA said.
US box office revenues have fluctuated over the past decade, following a record year in 2002. New 3D screens and higher industry-wide ticket prices have maintained revenues, but the clear trend is towards declining admissions.
“A 10-year baseline that starts in 2002 is not as favourable to us as a 20-year or 30-year baseline,” said John Fithian, president of the National Association of Theatre Owners. He expressed confidence that admissions would grow in 2012, thanks to a strong slate of summer films. “My guess is we will see an improvement this year,” he said.
Mr Dodd said growth in global box office revenues underscored “the impact of movies on the global economy and the vitality of the film-watching experience around the world”.
“The bottom line is clear: people in all countries still go to the movies and a trip to the local cinema remains one of the most affordable entertainment options.”
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