Global theatrical rental revenue rebounds in '06


Revenue from worldwide theatrical rentals -- the bare bones money that returns to the major U.S. studios after the exhibitor's cut and distribution expenses -- soared 20.9% to $7.95 billion in 2006, setting a record for the six MPA companies by beating 2004's $7.48 billion. The returns highlight the industry's comeback from 2005's year of the slump that saw rentals dip to $6.57 billion.

Rental revenue in 2006 was equally divided between the domestic and foreign markets, with the U.S. accounting for $3.970 billion and the international market, including Canada, for $3.976 billion. Foreign revenue went up 25.6% from 2005's $3.16 billion; domestic climbed 16.4% from 2005's $3.41 billion.

The official figures were circulated confidentially this year to major company distribution executives by the MPA, the international arm of the MPAA, and confirm the forecasts of studio honchos that 2006 would be a banner year following the release of such tentpoles as "Pirates of the Caribbean: Dead Man's Chest," "The Da Vinci Code" and "Ice Age: The Meltdown."

The top 25 overseas markets -- with the U.K. at No. 1 to Argentina at No. 25 -- delivered an 86.6% share of the international market, returning $3.44 billion to the major studios last year compared with $2.76 billion in 2005, an increase of $688.19 million, or 25%.

All of the 25 overseas markets showed substantial increases compared with 2005, with Russia (No. 12) moving up 67.2%; Denmark (No. 22), 56.6%; Belgium (No. 17), 47.1%; Poland (No. 20), 47.6% and Norway (40.6%).

An eye-catching statistic concerns Venezuela (No. 13), for which the MPA lists a 312% increase, with a $70 million payout for U.S. imports in 2006 compared with $17 million in 2005.

The U.K., the leading buyer of U.S. films, increased its 2006 imports by 10.5%; Japan (No. 2), 16.9%; Canada (No. 3), 18.3%; Germany (No. 4), 18.3%; Spain (No. 5), 38.6%.

(It has long been the policy of the major studios to regard Canada as a domestic partner, but the MPA lists revenue from the country as foreign income.)

In 2005, pundits in and out of the industry were prognosticating the demise of the international theatrical experience and the wholesale shutdown of movie houses as DVD and the Internet started to flourish. Based on 2006 results, however, there has been a complete reversal, with many of the same pundits now calling attention to the vibrancy of the theatrical industry.