Cinema

Box office revenues remained strong in 2016 after a stellar performance in 2015. Cinemas need to continuously innovate to retain the younger generation.

What’s new?

Box office revenue was expected to fall slightly in 2016 after the stellar performance in 2015, which was partly driven by a number of exceptional blockbusters. However, a steady stream of strong-performing films, combined with the opening of new state-of-the-art cinemas boosted both cinema attendance and ticket prices. As a result, box office revenues increased by 4.3%. There was nothing to match the 2m-plus admission blockbuster Spectre, but three films attracted more than one million admissions – Bridget Jones’s Baby, Finding Dory and The Secret Life of Pets. Total admissions increased by 3.7% to 34.2 million. We believe that the cinema market will be relatively stable in the next five years. On the one hand, cinema attendance will continue to be boosted by the opening of new state-of-the-art cinemas such as Kinepolis Den Bosch, Euroscoop Ypenburg and Vue Enschede. On the other hand, however, factors such as a mediocre film slate (for 2017) and increased competition from other leisure activities will have a mitigating impact on growth in the cinema market.

 

 

Cinema market (€ millions)
Netherlands Historical data Forecast data CAGR %
  2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 17-21
Box office 245 250 250 276 288 290 292 295 297 300 0.8%
y-o-y growth   2.0% 0.2% 10.3% 4.3% 0.7% 0.9% 0.9% 0.9% 0.9%  
Advertising 5 6 6 6 6 7 7 7 8 8 6.0%
y-o-y growth   4.0% 4.5% 4.6% 4.4% 7.9% 3.2% 6.7% 6.3% 5.9%  
Total 250 255 256 282 294 296 299 302 305 308 1.0%
y-o-y growth   2.0% 0.3% 10.2% 4.3% 0.9% 1.0% 1.0% 1.0% 1.0%     

Source: PwC, Ovum, NVBF. Note: Because we rounded off amounts and percentages throughout this Outlook, tables may not sum to 100%.

Outlook

Underlying the relatively stable short-term future are several trends that will have a profound impact on the cinema industry in the longer term. These include 1) a declining cinema attendance of millennials, 2) globalization of international filmmaking, and 3) the decline of the traditional cinema.

The cinema audience is ageing gradually as cinema is slowly losing its appeal to people in the 15-25 year age bracket. Especially the younger generations are attracted to alternative forms of entertainment such as TV series on VOD. This can also be illustrated by the fact that Netflix does not release its films in cinemas. The decrease in cinema attendance of the younger generations will negatively impact the cinema market in the long term if the industry does not manage to turn this around. Cinemas not only have to continuously innovate, but also new and more focused forms of marketing supported by data analytics are essential to successfully target the younger generations.

The cinema market is also changing on the supply side. The decline of the film DVD and rental markets meant that film production companies needed to find alternative forms of revenue. This resulted in the trend that films are increasingly tailored towards a larger and more global audience. In other words, to generate enough revenue to be profitable, films not only have to be attractive to the traditional audiences in the US and Europe but also to audiences in countries with fast growing and thriving cinema environments such as China. But the fact that films produced by the major studios are becoming more global also creates more space for regional and arthouse productions that target smaller audiences with lower budgets.

These diverging trends can also be seen in cinemas. The most successful cinemas of the future will be, on the one hand, the large state-of-the-art cinemas with the latest technologies and, on the other hand, the smaller more premium cinemas that offer a first-class night out. The latter type of cinemas provide, for example, exquisite snack options and a luxurious retro design for upmarket prices. The more traditional cinemas that do not offer any of the above will increasingly struggle.

Contact

Ennèl van Eeden
Entertainment & Media Industry Leader
Tel: +31 (0)88 792 45 40
E-mailadres

Guido van Aardenne
Director
Tel: +31 88 792 65 10
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