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MPAA 2018 Entertainment Report: Nontheatrical Thrives As Global Box Office Goes Flat

The revenue gap between entertainment inside and outside theaters has doubled, and more people now subscribe to streamers than to cable.

MPAA Charles Rivkin, U.S. Ambassador to FranceVarious Personalities

Charles Rivkin, current MPAA head and former U.S. Ambassador to France

Jaime Abecasis/REX/Shutterstock

With nine days before CinemaCon, the Motion Picture Association of America released its 2018 annual report today. And amidst the cheering for increased revenues, a new note stood out: Almost all of the growth lies outside cinemas.

According to the MPAA report, which tracks global theatrical and nontheatrical entertainment, nontheatrical revenues increased by 16 percent over 2017, to reach $55.7 billion. However, global box office was essentially flat: It increased by just 1.2 percent to $41.1 billion.

All told, the 2018 global total is $96.8 billion, up 8.3 percent over 2017’s $89.4 billion. However, 57.5 percent of that revenue came from non-theatrical showings — a year-over-year increase of about 7.5 percent. That means theaters were responsible for less than one percent of that growth, or about $500 million.

In 2017, the first year that the MPAA tracked nontheatrical revenue, nontheatrical already outstripped theatrical by 17.7 percent — $47.8 million vs. $40.6 million. Over the last year, that spread has doubled: $55.7 billion vs. $41.1 billion, or 35 percent.

As always, the report is full of fascinating statistics, and some reflected theatrical growth: Annual attendance among domestic moviegoers increased from 4.7 visits to 5, with age groups of 12-17 and 18-24 at the high end (5.1). Latino and Asian-American communities topped ethnic groups, and both showed increases.

However, this year made it clear that the MPAA knows its membership makes most of their money outside of domestic theater ticket sales. Of that $97 billion global entertainment revenue total, North American box office comprised 12 percent.

While 2018 North American box office rose to a record $11.9 billion — up 7.2 percent over 2017 — international box office dropped slightly from $29.5 billion to $29.2 billion. Overseas, the Asia-Pacific region showed the biggest uptick at 5 percent, with China reflecting a 12 percent increase at $9 billion.

The report was not accompanied by the traditional teleconference with the MPAA and NATO, “given the close proximity of the report’s release to the upcoming CinemaCon (April 1-4),” according to the official release. However, MPAA chairman and CEO Charles Rivkin and National Association of Theater Owners’ president and CEO John Fithian will appear at a joint press conference at the Las Vegas event.

Another difference in this year’s report is the addition of nontheatrical behemoth Netflix, which briefly increased the MPAA membership ranks to seven joining Disney, Warner Bros., Universal, Sony, Paramount, and 20th Century Fox. Yesterday, that number returned to six with the completion of Disney’s Fox takeover.

While the release of the MPAA report and NATO’s CinemaCon always take place in close proximity, and complement each other, the two organizations serve different masters. NATO represents some 33,000 movie screens in the United States as well as cinemas in 100 countries — none of which stand to benefit from the nontheatrical revenue that’s driving MPAA members’ growth.

According to the report, 613 million people subscribe to online video services in 2018, 27 million more than the prior year. For the first time, they outnumber cable subscribers.

The biggest global growth driver was digital home entertainment, with domestic digital spending up 24 percent and international digital spending increasing by 34 percent. Globally, that represents a whopping 170 percent jump since 2014.

This is the second year for the MPAA THEME report — Theatrical and Home Entertainment Market Environment, which presents both theatrical and nontheatrical statistics. Prior to that, the MPAA report was simply Theatrical Market Statistics. In the 2016 report, then-MPAA chairman and CEO Christopher Dodd said, “Even with an incredible variety of viewing choices available to audiences, cinema remains the premier way to experience the magic of our movies. And the good news is, there are positive signs for greater growth in the future.”

This year, Rivkin, who launched the THEME report, had a different take: “In today’s dynamic marketplace, stories come to life for audiences in theaters, at home, and on the go. Our companies continue to deliver content where, when, and how audiences want it — and the numbers released today speak volumes.”

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