A much brighter picture

All-media revenue from pics up 8% to $42.6 bil

The motion picture industry is back on course.

After a disappointing 2005, the six major companies have received official confirmation from the MPA that their worldwide all-media revenue from filmed entertainment — comprising money from home video, television, theatrical and pay TV — expanded by 8% in 2006 to reach $42.6 billion.

The confidential MPA report sent to industry executives discloses that all-media sales in the U.S. grew 10%, while the international market (top 25 markets) showed a 5% advance. Of the $42.6 billion, the U.S. contributed $24.3 billion and international $18.3 billion.

In 2005, all-media revenue tumbled 8.2% from $42.9 billion in 2004, with the U.S. segment off 10% and international down 5.8%.

More good news for executive eyes indicated "positive growth" for all segments of the business last year, with revenue from worldwide theatrical exposure showing the biggest year-over-year hike at 21%.

The annual revenue summary covers the top 25 international markets, ranging from the U.K. at No. 1 to Ireland at No. 25. These markets, which comprise 39% of all worldwide all-media revenue, grew 4% in 2006, according to the MPA. Canada, covered as a foreign market by the MPA as opposed to studio positioning as domestic, showed the biggest international growth in terms of dollars in 2006 by adding $341 million, a jump of 23%.

Advancing at a sizzling pace since getting out of the communist yoke, Russia moved up two spots to become the 13th-ranked purchaser of U.S. filmed entertainment, showing a 50% hike year-over-year. All-media revenue from Russia amounted to $88.7 million in 2002, climbing to $124.3 million in 2003, $160.4 million in 2004, $196.6 million in 2005 and $295.7 million last year.

Theatrical revenue in Europe in 2006 matched 2004's record year of $2.1 billion, with significant gains in three smaller markets — Italy (up 25%), Russia (67%) and Sweden (38%). The Asia Pacific region, Latin America and the Middle East and Africa also enjoyed double-digit growth for theatrical releases.

As part of the all-media mix, home video again recorded the biggest market share but continued to show signs of slippage as it fell three percentage points to 45%. The demise of the VHS format appears to be getting closer; the videocassette represented only 1% of the overall all-media market share in 2006, dropping 86% in Europe against DVD's slide of 5% in the region.

Home video lost ground in Europe for a second straight year, with drops in the U.K., Germany, France, Spain and Italy most noticeable, while the smaller markets of Belgium, Norway and Denmark displayed sizable increases. Home video sales also declined in the Asia Pacific region but showed an "upward trend" in Latin America and the Middle East and Africa, the MPA said.

Television revenue from Europe rose 18% in 2006, marked by the U.K. pickup of four market-share points. Asia Pacific showed a 5% increment as South Korea's 59% TV revenue boost stole market share from the region's two top buyers, Japan and Australia. Latin America, ending a four-year decline in television buys, grew by 4%. The Middle East and Africa, led by South Africa's 73% increase to $31 million, showed "strong growth" in program acquisitions.

Revenue from pay TV in Europe fell 7% in 2006 but remained above 2005 levels, with an 8% loss in traditional pay TV offset by a slight increase in pay-per-view, the MPA reported. Overall revenue from the Asia Pacific region dipped for a second year in a row, falling 7% as Japan's 16% loss contributed to the region's pay TV decline. Latin American rebounded a bit thanks to gains in the region's two largest markets, Brazil (18%) and Mexico (2%). The Middle East and Africa continued to move ahead in welcoming pay TV, moving up 13% as South Africa led the charge with a 23% hike.

The survey covers all-media revenue recorded by its six member companies — the Walt Disney Co., Paramount Pictures Corp., Sony Pictures Entertainment, 20th Century Fox Film Corp., Universal City Studios and Warner Bros. Entertainment.