Global Box Office Soared to Record High of $31.8 Billion in 2010

Courtesy of Twentieth Century-Fox

But U.S. box office results were flat despite a surge in revenue from 3D, according to a new report.

International growth, fueled by the rapid deployment of digital projection and 3D, powered the worldwide box office to record levels in 2010 even as the number of studio movies released declined.

The global box office soared to an all-time high of $31.8 billion, an increase of 8 percent from 2009, according to the annual Theatrical Market Statistics Report released Wednesday by the MPAA.

While the domestic box-office gross at $10.6 billion was flat year-to-year despite a surge in revenue from 3D, the take outside the U.S. and Canada jumped 13 percent to $21.2 billion led by growth in the Asia-Pacific region, especially China.

"The top line is the tremendous growth in the box office outside the U.S. and Canada," said Bob Pisano, president and interim CEO of the MPAA. "That is driven largely by moviegoing habits in China and India. But I want to put a caveat on that in terms of the inability of non-Chinese to release films in China and to realize a market rate of return. This is an ongoing problem."

Asia-Pacific grosses grew by 21 percent to $8.7 billion, of which more than 40 percent came from China. There also was a surge in Latin America, where revenue grew 25 percent to $2.1 billion.

The number of movie tickets sold in North America fell by 5 percent to 1.34 billion, about the same as the 2008 level. The number of U.S. and Canada moviegoers was up 3 percent from the prior year to 222.7 million, but the average number of movies each person attended declined from 6.5 per year to 6 a year.

Pisano expressed concern that there is a decadelong trend showing a decline in moviegoing in North America. He said per capita admissions fell to 4.1 from 4.3 last year, the lowest since 1993. Pisano said the challenge facing the industry is to "reverse that and get more Americans and Canadians back to movie theaters."

Pisano blamed much of that decline on baby boomers, which since the '60s have been a driver of ticket sales. "That is an unfortunate situation since [they] constitute the largest demographic group moving though the population," he said.

However, Pisano noted one favorable trend: Hispanics went to the movies about seven times last year on average, compared to four times for the overall population. And their numbers in the U.S. are growing.

"This is an area where we can look forward to increased movie attendance," Pisano said.

The average price of a domestic ticket rose to $7.89 last year from $7.50 in 2009. John Fithian, president and CEO of the National Association of Theatre Owners, noted that an average ticket -- including premium-priced tickets -- costs less than it did in 1970, adjusted for inflation.

The number of movies released by MPAA member companies (the major U.S. studios and their subsidiaries) declined 11 percent to 141, the fewest in at least a decade. However, the total number of movies released, including those from independents, was 560, up 1 percent.

The MPAA rated 706 movies last year, which was also down 11 percent from a year ago and represented the fewest in at least a decade. In other words, fewer big movies made more money.

It doesn't look as if production is about to increase, either. The number of films beginning production was off 17 percent, continuing a three-year decline.

The big revenue driver in the domestic market was 3D, which made up 21 percent -- or $2.2 billion -- of the total, which was double the prior year. 3D made up just 2 percent of the U.S.-Canada take as recently as 2008.

One in three people in North America saw a 3D movie last year, and among moviegoers ages 2-17, an astounding 64 percent saw at least one 3D movie.

As in the past, the most-frequent moviegoers drove the box office. Although they comprise only 11 percent of the population, these folks represented half the ticket sales in North America. Their number rose to 35 million, up 3 million from 2009.

The number of worldwide movie screens has remained the same for the past five years at about 150,000, but the number that employ digital projection has soared. Nearly one-quarter of screens are digital, and more than 60 percent of those are capable of showing 3D, which is the key factor that has driven the conversion to digital.

In 2010, every region in the world at least doubled its digital screen count for an overall 122 percent increase in digital projection.

"The most historic thing of 2010," Fithian said, "is the growth of digital cinema and 3D exhibition. If you look at the numbers ... it is really quite astounding."

Fithian said 20 percent of U.S. screens and 14 percent of international screens can show 3D. Fithian predicted the build-out of digital and 3D projection will be "basically done by 2013," at which time 40 percent of all screens will be digital as well as 3D capable.

No movie benefited more from the growth of digital and 3D worldwide than Avatar, the top-grossing movie of the year. The rest of the top 10 grossers in North America were Toy Story 3, Alice in Wonderland, Iron Man 2, The Twilight Saga: Eclipse, Inception, Harry Potter and the Deathly Hallows Part 1, Despicable Me, Shrek Forever After and How to Train Your Dragon.

Pisano sounded a warning about the impact piracy has on box office.

"The continued theft of movies online will have a sustained adverse impact on movie attendance in the coming years. It's impossible to compete with free," Pisano said. "We will continue to work with our industry partners to fight for common sense ways, through legislative, enforcement and legal avenues, to vigilantly protect the creativity at the heart of our industry from theft."

Pisano cited last year's Oscar best picture winner The Hurt Locker as an example of a movie that was particularly hurt by piracy.