European Box Office Performance Painted a Conflicted Picture In 2018

Courtesy of Marvel Studios
'Avengers: Infinity War'

Preliminary figures show otherwise comparable markets going in widely different directions with Italy and Germany in the doldrums and the U.K. and Scandinavia showing signs of growth.

Last year saw Europe more divided than ever — at least when it comes to the box office.

Individual territories in Europe are still tallying up ticket revenue for 2018, but preliminary figures show otherwise comparable markets going in widely different directions.

While France and Spain saw a modest slip in admissions and box office — easily explained away by this past summer's heatwave and competing entertainment in the form of the World Cup — Italian cinemas had their worst year in a decade, with revenue falling to $633 million (€555 million), or around $200 million less than what they took in back in 2010.

Things in Germany look even worse, with initial figures showing a double-digit drop both in ticket sales and revenue, with Western Europe's largest country missing the 100 million admissions figure and touchstone €1 billion ($1.15 billion) in total box office.

Meanwhile, up north, Scandinavia had a stellar 2018, with particularly strong performances from local titles in Sweden and Denmark. Russia had a solid year, with total box office up 6 percent at $206 million and admissions 5.8 percent higher at 57.9 million. And in the U.K., while box office revenue was essentially flat for the year — coming in 0.1 percent lower at $1.628 billion, according to figures released Monday by the U.K. Cinema Association — admissions were on target to top 176 million, hitting a 50-year-high.

European cinemagoers couldn't even agree what was the best film of the year. Avengers: Infinity War topped the charts in the U.K., France and Germany — but its British take, at $96.6 million, was more than that of the other two territories combined. In Spain, Avengers: Infinity War only made it to fourth spot, earning $24.8 million, beat out by Bohemian Rhapsody ($25.2 million) and Incredibles 2 ($25.3 million), both of which were hits across the continent. On top was Jurassic World: Fallen Kingdom, which, helped by its Spanish director, J.A. Bayona, was the number one film of the year in the territory, earning $27.8 million. In Italy, the top spot went to Bohemian Rhapsody ($23.8 million). Jurassic War only managed an eighth-place finish, with a $12.7 million take in the country.

“It's a very diverse picture, you don't have a single factor impacting every territory the same way,” says Laura Houlgatte, a representative for European cinema associations group UNIC. “The hot summer seemed to hurt box office in Germany, where people kept away from theaters, but it seemed to help it in Spain, driving people into the air-conditioned screenings.”

Increased onscreen diversity in 2018, which arguably helped boost U.S. box office to record highs — more than 1.2 billion tickets sold and a $11.8 billion domestic take, 6.8 percent higher than in 2017 — failed to move the needle much in Europe. Disney's Black Panther did well across the continent, but nowhere did it replicate the blow-out success of the U.S., where it was the number one film of the year, earning more than $700 million. While Black Panther made the top 10 in most European countries, its performance varied from stellar — $70 million in the U.K., $19 million in Russia, $10 million in the Netherlands — to solid ($33 million in France) and disappointing (just $8.9 million in Italy and $9.7 million in Spain).

Warner's Crazy Rich Asians — a $174 million hit in North America — barely registered in Europe, outside of the U.K., where it earned $7.4 million, more than the rest of its combined continental European take.

The performance of individual European territories in 2018 came down, as it so often does, to the success of local titles. Wojciech Smarzowski's Clergy, a takedown of Poland's Catholic Church, almost single-handedly lifted the national box office, with a $28 million local take, while French comedies The Magic Tuche ($47 million) and La Ch'tite Famille ($46 million) kept that country's industry afloat in 2018.

In Spain, there was no local blockbuster to match the $77.5 million earned by 2014 comedy smash Spanish Affair, but Javier Fesser’s basketball comedy Champions scored an impressive $21.8 million and a total of 10 local titles earned more than €3 million ($3.5 million) at the box office, lifting total market share for national films was 17.5 percent, above average for the territory.

Similarly, the U.K. got a boost from a pair of U.K. co-productions: Ol Parker's Mamma Mia: Here We Go Again! (which earned $83.2 million locally) and Bohemian Rhapsody ($61.2 million). By contrast, Germany's top two local titles — kids films Jim Button & Luke The Engine Driver and The Little Witch — together earned less than $25 million.

“In Europe, three or four local films make the difference between a good year and a bad year,” says David Hancock, head of film and cinema at London-based market analysts IHS Technology. “Most of the difference you see, year by year, is down to that.”

For a handful of territories — including Italy and Germany — Hancock does see some “structural problems,” however. “Italy looks a lot like Spain a few years ago,” he notes, pointing to rampant piracy in the territory.

Italy has also been hampered, until now, by an old-school distribution structure that has avoided bowing films in the summer months on the assumption that Italians would rather hit the beach than sit inside in the sweltering heat. That Italian summer slump could be history this year. The studios are breaking with tradition and adding the southern European nation to their summer tentpole rollout, betting Italians will come out of the sun to check out the likes of Sony's Men in Black: International (June 13 bow in Italy), Fox's The New Mutants (August 25) or Disney's live-action version of The Lion King (August 21).

In Spain, the box office recovery was helped when the Madrid government —after years of lobbying by a battered local industry — finally lowered Spain's sky-high sales tax on movie tickets, cutting it from 21 percent to 10 percent. Spain's movie ticket tax was the highest in Europe and many blamed it for driving down admissions. The new, lower, tax took effect July 2018 and, according to Spanish Cinema Institute, had an immediate effect: Ticket sales, which had been 3.9 percent down in the first half of the year, bounced back to 2017 levels.

In Germany, which for years has seen a slowly shrinking market, the issue could be down to an aging infrastructure. Many of the country's theaters — especially its multiplex chains — date back to the 1990s. Germany has also lagged behind many of its Northern neighbors, who have invested in revamping old locations and being more flexible with ticket pricing — targeting both the high and low end of the market. The U.K. has been a leader in this area, with Odeon upgrading its cinemas into high-end boutiques — most famously in the posh, refurbished Odeon on Leicester Square — and chains such as Vue aggressively discounting tickets at certain venues to drive up admissions.

"I do think that what we are seeing in terms of the level and rate of investment in U.K. cinemas ... is unparalleled across Europe, and must be reflected in the public’s seemingly increased appetite for cinema-going,” says Phil Clapp, head of the U.K. Cinema Association.

Whether that kind of investment can be replicated in Germany is an open question. Germany's cinema owners association have called for $115 million (€100 million) in government subsidies over the next five years to help theaters renovate and update their tech for the digital age — with the focus on improving the “cinema experience” and targeted, customer-focused marketing. 

The Berlin government has pledged to “support and strengthen” the cinema exhibition industry in Germany but, in its 2019 budget, Berlin has set aside just $2.3 million (€2 million) in subsidies for local exhibitors.

“It is a question of money,” Peter Dinges, head of Germany's Federal Film Board, said in a recent interview. “You can't make a major leap forward with €2 million.” However, he also sees a need for “more risk-taking” by local exhibitors and distributors, and calls for a more flexible approach to windowing — the time between a film's theatrical release and its bow on home entertainment or online — and a willingness to experiment with new business models, including MoviePass-style subscriptions. 

Alex Ritman in London contributed to this report.