Study: Big-Screen Theaters Promise More Exhibition Riches

Ron Phillips/Warner Bros. Pictures

Large screens in movie theaters are set to quadruple to 2,600 by 2016 and could generate $3 billion in incremental revenue.

LONDON – The tally of digital large screens in movie theaters around the world is set to hit 2,600 by 2016, up from the 653 installed by the end of 2011.

According to a fresh report from U.K. based exhibition specialists Dodona Research admissions for the large screen experience – think IMAX, Cinemark XD and Regal RPX -- will hit 170 million by 2016, up from 2011's 42 million level.

Dodona Research's research document, Large Screen Cinema, also notes that those 170 million admissions -- all of which will be people willing to pay a premium to see a movie in the large format – will be worth around $850 million over and above normal ticket prices to exhibitors with such screens.

The big screen box office successes for movies such as Ridley Scott's Prometheus and the pre-booking levels for the upcoming Christopher Nolan directed The Dark Knight Rises are being eyed by exhibitors hoping to bolster the appetite for more costly ticketing.

But the road to riches for exhibitors is a rocky and expensive one as the cost of the constantly evolving digital technology requires upgrading and changing and the auditoria comes with expensive real estate price tags for such large screens.

However Dodona notes that in the light of experience with 3D, and with the example of IMAX there is evidence that what looks like a threat is most likely an opportunity.

By way of example, Dodona points to the extra $5.38 AMC claims to get for ETX tickets as being equivalent to 67 percent of the cost of the average movie ticket sold in the United States in 2011.

Dodona Research report author Alisdair Ritchie notes that there is no question that exhibitors worldwide "will seek, as best they can, to recover the costs of their technology investments."

Richie says: "It seems likely that differentiating between types of cinema experience, and branding for different audience segments, will be a fruitful route towards this goal. Whether current hierarchies of screen types will survive, as meaningful distinctions may be more questionable."

Dodona calculations suggests that 16.75 percent of all movie-goers might, if the screens were available, be willing to pay $5 extra.

In money terms this equates to around $1 billion of extra box office in the US and, if the same percentage uplift were to apply, a further $2 billion internationally.

In both cases the amounts represent an increase, in very round numbers, of about 10 percent over current levels.

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