2006 boxoffice on the up and up

MPAA: Receipts, admissions, production costs all growing

Domestically, boxoffice was up in 2006. Internationally, it was on a tear. But though marketing costs decreased slightly, production costs rose last year (HR 3/7).

Delivering the MPAA's official report card on the state of the worldwide film business, chairman and CEO Dan Glickman said March 6: "I would state it was a bullish year for this business. Film audiences around the world reminded us that they love going to the movies, and we had a good slate of blockbusters, family movies, dramas and comedies."

The U.S. boxoffice recovered last year from its 2005 slump as it climbed to $9.49 billion in ticket sales — a 5.5% increase over the previous year's level of $8.99 billion.

The domestic boxoffice also rebounded from a three-year decline in admissions. For 2006, according to the MPAA, admissions grew to 1.45 billion, up 3.3% from 2005's 1.4 billion. The rise in admissions combined with a slight rise in the cost of tickets to produce the boost in boxoffice revenue.

The average cost of a ticket rose from $6.41 in 2005 to $6.55 in 2006, or 2.2%, which the MPAA noted remained lower than the consumer price index's increase of 3.2% during the same period.

For all the upbeat news, though, there remains room for growth.

The 2006 domestic boxoffice figure was overshadowed by 2004's record $9.54 billion, while admissions remained well below the modern-day high of 1.64 billion achieved in 2002.

On the worldwide stage, movies fared even better. Spurred by the growth of international markets in such countries as Brazil, France, Germany, Russia and South Korea, worldwide boxoffice grew to an all-time high of $25.8 billion. That represented an 11% increase from 2005's $23.27 million and topped 2004's record-setting $25.19 billion.

Overall, costs remained relatively steady — with a rise in production costs offset by a decline in marketing outlays.

The average cost of making and marketing a film for MPAA member companies stood at $100.3 million in 2006, up 0.6% from 2005, though somewhat lower than the 2003 high of $105.8 million. Production costs rose to $65.8 million from $63.6 million in 2005.
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