Strong Figures For The 2009 Summer Box Office

The Summer is make or break time for the studios.  The period between May 1st and Labor Day typically accounts for 40% of the year’s total box office revenues.  With the U.S. coming out of an economic recession, the premise of film as a recessionary resistant industry has been tested yet again.  According to Paul Dergarabedian of Hollywood.com, 2009 summer box office ticket sales totaled a record $4.25 billion, beating the previous record of $4.2 billion set in 2008.

Does box office revenue measure the health of the film industry?

While domestic revenue from ticket sales climbed about 2% at the Summer box office, attendance dropped 2%.  Over the past decade, movie theater admissions have been relatively flat, hovering around 1.4 billion.  Increasing ticket prices to achieve revenue growth has been an ongoing trend.  Looking forward, 3D and Imax will comprise a larger portion of box office admissions and ticket prices will continue to increase.  However, box office revenues and theater attendance are just indicators.  Profit is the only measurement of health.  Paul Dergarabedian makes some points on the subject below in an interview with KCRW’s The Business.

 

 

Does lower theater attendance matter?

Because movies are so much cheaper than their entertainment alternatives, tickets have a high degree of price elasticity (click image to enlarge).  As better theater experiences from 4K digital screens, to 3D and Imax proliferate, ticket prices will continue to increase.  And unlike television, the film industry is not solely predicated on viewership.  The degree to which attendance is a factor hinges on production costs.  Bottom line, all that matters is profit – how much did the film cost and how much did it make.