Bigger Picture Research

BPR to undergo refit over the summer

BPR is going into dry dock for the summer, which means no posts for a few months.

A bit of essential maintenance is called for: barnacles will be duly scraped off, leaks patched and a new coat of paint applied.

Come September the charts and tide tables will be consulted and a new course set in preparation for relaunch. Until then, the archives will remain open and I'll continue to post research updates on Twitter.

In the meantime, keep an eye out for Angus Finney's book The International Film Business: A Market Guide Beyond Hollywood, Nevafilm's report on the Russian film distribution market (due out in June) and the UK Film Council's Statistical Yearbook in July.

Happy reading.

European digital cinema screens in 2009

As flagged last week, the European Audiovisual Observatory has published a good helping of European digital exhibition data.

According to MEDIA Salles, who collected the information, there were 4,693 screens equipped with DLP Cinema or SXRD technology at the end of 2009, a rise of 207% over 2008.

Digital screens accounted for 13% of all European screens in 2009, up from 4% in 2008 (Table 1). The average number of screens in digital sites has also risen, from 1.6 screens per site at the end of 2007 to 2.0 screens per site in 2009.

Table 1: Digital cinema sites and screens in Europe 2003 - 2009 (courtesy of European Audiovisual Observatory- click to enlarge)

 

According to MEDIA Salles, most digital theatres are found in Western Europe (Table 2). The five leading European markets in terms of admissions also have the highest number of digital screens. France accounts for 19% of the digital total, followed by the UK (14%), Germany (13%), Italy (9%) and Spain (5%).

Meanwhile, Russia has witnessed strong growth since 2008, and now accounts for 7.5% of Europe’s digital screens (352 in total).

The Observatory’s press release picks up on the fact that a handful of companies account for a large share of all digital screens. ‘In Europe’, the release explains, ‘the development of digital screens seems to be highly concentrated in terms of exhibition companies, in view of the fact that, at June 2009, 5% of exhibitors were responsible for 33.6% of the overall number of digital screens.' Further evidence, perhaps, that smaller operators are being left behind in the switch to digital.

The press release goes on:

'The top five players are the French company CGR (with 13.1% of digital screens), Kinepolis (6.8%), operating in Belgium, France and Spain; Cineworld Group (5.6%), present in the United Kingdom and Ireland; Odeon and UCI Cinemas Group (4.8%), operating as Odeon Cinemas in the United Kingdom, as UCI in Austria, Germany, Italy and Portugal and as Cinesa in Spain; Cineplexx (3.4%), present in Austria and in Italy.’

3D has proven to be a significant catalyst for digital screen growth. One indication of this is the fact that 69% of all European digital screens were 3D-ready by December 2009 (in time for Avatar in most European markets), up from 54% only six months earlier in June 2009.

Table 2: Digital cinema sites and screens in Europe by country 2007 - 2009 (courtesy of European Audiovisual Observatory- click to enlarge)

European box office, cinema admissions and feature production, 2009

With Cannes almost upon us, the European Audiovisual Observatory has released its annual round up of European box office, admissions, market share and feature production numbers, in advance of next week's publication of FOCUS 2010: World Film Market Trends.

The numbers, some of which are based on provisional data, paint an encouraging picture of cinema going and film making in apparent rude health (certainly at an aggregate level).

Headline data as follows:

• Total EU box office gross reached a record high of EUR 6.27 billion in 2009, a rise of 12% over 2008.
• Admissions rose by 6% to an estimated 981.1 million in 2009, up from 925.3 million in 2008.
• Annual box office gross increased in 21 of the 23 EU member states for which data are available, with only Ireland and Latvia seeing a decline. Admissions increased in 20 EU markets, and deceased in only six (see Table 1).
• European films had a market share of 26.7% of total EU admissions, down from 28.2% in 2008 and the lowest level since 2005.
• Market shares for national films declined in 18 out of 23 member states for which data were available in 2009.
• French films remained the most successful films in the EU market in terms of admissions. German films ranked second, taking 4.1% of the total, followed by UK productions accounting for 3.9% of total EU admissions.
• The Observatory estimates 1,168 feature films, including feature documentaries which accounted for 20% of the total, were produced in the EU in 2009, 28 more than in 2008 (the previous record year).
• The Observatory cautions that ‘differences in production measurement methodology between European countries make it difficult to evaluate the effects or non-effects of the economic crisis on overall production output in 2008 and 2009.’ ‘Nevertheless’, the press release continues, ‘the high in 2009 production data suggests that the European public funding system has prevented production levels from dropping significantly.’
• For the first time in recent years, Germany had Europe's highest production output (194 feature films), followed by France (182 features).

Click to enlarge:

You can find additional data and tables on the Observatory’s web site (including details of the top 20 performing titles at the European box office).

For those of you heading to Cannes (ash plume permitting), the Observatory is hosting a digital cinema workshop in the Salle Buñuel (Palais des Festivals) on Sunday 16th of May from 3.00 pm to 4.30 pm.

Speakers include Professor Ian Christie, Vice President of Europa Cinemas, Christine Eloy of Europa Distribution, Aviva Silver, Head of the MEDIA Programme of the European Union, and Antoine Virenque, President of the European Digital Cinema Forum. There’ll be a further announcement about European digital cinema data on 12 May.

Plus if the fancy takes you, you can swing around to the Observatory’s stand at the Marché du Film (stand A6 Riviera) and collect your free copy of FOCUS 2010: World Film Market Trends (a PDF version will be available online in due course).

A quick film business blog round up

Keeping up to date with industry commentators and the musings of well-placed insiders is one of the more enjoyable aspects of maintaining this blog. Reading widely around the subject has become a necessary habit, and it rarely becomes onerous.

The print-led trade press has always performed a valuable service in this regard, marshalling fact and opinion in digestible portions. But the internet- particularly web 2.0 platforms like Twitter, blogs and the like- puts readers/listeners/viewers in touch with developments in a more immediate and less filtered way.

Best of all, it’s possible (as suits your needs) to move seamlessly between eavesdropping and networking, between bearing mute witness to and actively participating in an ongoing conversation among the informed, the interested or the idly curious.

Quite how dynamic this free and fulsome exchange of film business information has become is evidenced by the blog roll in the right hand sidebar, which has grown enormously since this blog started, and continues to expand (although it is still only a fraction of what’s out there).

Anyway, I want to draw attention to some recent additions that make an excellent contribution to the ongoing conversation.

I’ll start with the most recent of recent additions, The A.K.A. Indie Film Blog. Author and industry consultant Jeremy Juuso kicked off this blog last month with a post about Cantor Fitzgerald’s movie futures market, the Cantor Exchange.

Juuso is author of Getting the Money: A Step-by-Step Guide for Writing Business Plans for Film, and I first strayed across his writings from a link on Ted Hope’s blog to a post on Baseline Research’s Research Wrap site about the box office chances of ‘self-released specialty films’ in the US.

It’s a canny and provocative analysis (witness Hope’s commentary), and the issues raised are absolutely pertinent at this time of shifting film distribution models.

As well as filing copy for Baseline Research, Juuso runs a consultancy whose web site hosts a marvellous array of freely accessible film data.

Throughout 2009 Juuso published monthly PDF reports listing independent and ‘independent-style’ films released theatrically in the US. Among the data included for each title are details of their theatrical release pattern and box office numbers, the involvement of above-the-line star talent, plus estimates of the budget and a summary of financing sources.

The information is derived from various online and public sources, and each title takes Juuso around 2-3 hours to research. ‘The goal’, as Juuso told me when I enquired about his approach, ‘is to paint a clearer picture for filmmakers and investors of just what kind of landscape they face when launching an indie film geared toward the US market.’

The result is a detailed release catalogue, of obvious benefit to anyone drafting a business plan or thinking of acting on one (or, for that matter, anyone trying to understand the way the contemporary indie sector operates in the US).

Screen Finance used to provide a similar service in the UK (for the price of a subscription), until it bit the dust last year (the bfi Library tells me the last issue of Screen Finance they hold is dated 17 December 2009, following Tim Adler’s departure to manage the London bureau of Nikki Finke’s Deadline Hollywood blog). In the absence of Screen Finance, I’d love to see Juuso’s approach replicated in the UK and Europe.

Alongside the monthly PDFs you can find The A.K.A. Report 2009, an overview of the US theatrical market based on analysis of summary data. And returning to where we began, the first post on Juuso’s A.K.A. blog lays bare the operation of the Cantor Exchange in lucid detail (check out entertainment attorney Roger Goff's blog for another view of the same). If, like me, you’re only dimly aware of terms like ‘going long’ and the ‘short position’ from coverage of the global banking crisis, Juuso’s post lifts the shroud on this arcane world and makes it comprehensible.

Now to a blog of a very different order. David Graham is CEO of Attentional, a television industry data provider and consultancy that supplies, among other things, BARB data to the UK Film Council, and is responsible for a number of film-related projects over the years including a study of the economic impact of the UK screen industries (with Cambridge Econometrics and Oliver & Ohlbaum Associates).

Graham’s newly launched blog, Building an Entertainment Powerhouse, takes a critical look at the current model for UK TV, setting out alternatives informed by a staunchly (but not unthinking) free market approach. There’s an engaging openness about the posts, and Graham has the advantage of working from hard data in crafting and elaborating his position. Check out, for example, his posts on the desirability of a European Pay-TV platform, and the growth of internet-based TV viewing and its implications for the licence fee. It’s still relatively early days, but this blog is definitely one to watch and will no doubt become more relevant if the general election goes David Cameron’s way tomorrow.

Over the coming weeks I plan to introduce other relevant industry blogs in a similar way, so if you have any suggestions for inclusion I’d be grateful to hear them. I’m particularly interested to learn about film business blogs from outside the UK and US.

Australian theatrical market update, 2009

And so to the business of working through the backlog.

Screen Australia released a series of updates to its Get the Picture resource a couple of weeks back.

Among the new data is an updated list of top grossing films at the Australian box office; annual admissions and box office gross totals, plus the top performing titles in 2009 by country of origin; average cinema ticket prices in 2009; and data on the growth of digital screens.

Brief highlights as follows:

• Avatar is the highest grossing film of all time in Australia, having taken Aus$108,621,853 by 7 March 2010, the first film released in Australia to earn over Aus$100 million.
• Total box office gross stood at Aus$1,087.5 million in 2009, up 15% on the previous year.
• Admissions also rose, by more than 7% to 90.7 million.
• The average ticket price was Aus$11.99, a rise of 21% over the past four years.
• The number of digital screens has risen from 27 in 2006 to 311 in 2009.

Check out the full list of updates for further information.

Incidentally, you can find additional commentary by Ellen Pittleman on the Australian theatrical market in Screenline’s 2009 Global Box Office Review (which covers other territories as well; reports for Brazil, China and France have recently been published). It’s all available for free and well worth a look.

UK cinema admissions and UK feature production activity, Q1 2010

Volcanic hyperemesis and bureaucratic incompetence conspired to keep me and the family in Portugal for a week longer than planned, hence the lack of recent posts. But at least we enjoyed a few more days at arm’s length from election campaigning (more of which later).

Looking across various news feeds, trade publications and assorted correspondence I see it’s been quite a fecund period for the type of research of interest here. I won’t attempt to cover it all in a single post, so expect a burst of activity over the next week as I work through the backlog.

To ease back into the swing of things, let’s begin with a UK-themed update on first quarter activity.

First off, cinema admissions. Last week, cinema advertising firm Pearl and Dean (P&D) was finally sold off for £1 after four years on the market. Regular readers will recall P&D forms one half of the Cinema Advertising Association (along with Digital Cinema Media), the trade association whose charitable work includes releasing monthly admissions data compiled by Nielsen EDI/Rentrak. Here’s hoping P&D’s new owners continue in this same vein in future.

In the meantime, the CAA has released admissions numbers for March, allowing us to gauge the strength of the UK theatrical market during the first quarter of the year. It’s a positive picture, with a total of 14,482,606 tickets shifted in March- the strongest performance for the month in recent memory.

This brings the total for the first three months of the year to 43,957,027, up 6% on the same period in 2009, and the highest figure since 2002 (Figure 1). Clearly the big screen continues to work its magic on audiences.

Figure 1: UK cinema admissions, Q1 (January to March) 2002 to 2010

Source: CAA/ Rentrak

Turning to UK feature production, the UK Film Council has released the latest data from its regular tracking work, covering the first three months of the year. 23 feature films with budgets of £500k or more started principal photography in the UK during this period, the lowest number since 2005 (Table 1).

Source: UK Film Council

The number of UK domestic features (those made by a UK production company and produced wholly or partly in the UK) and inward investment features (those that are ‘substantially financed and controlled from outside the UK, where the production is attracted to the UK because of script requirements, the UK’s infrastructure or UK tax incentives’) both fell from the level seen in 2009. On the positive side, the decline in UK co-production activity appears to have stabilised, for the time being at least.

The money spent in the UK on making these features stood at £426.5 million, which is considerably lower than the amount spent in 2009 (£485.1 million), but remains higher than the levels of previous years (Table 2).

Source: UK Film Council

Honouring their commitment to provide market intelligence specifically about UK independent films, the UK Film Council reports 2010 saw less activity than in recent years (Table 3), although this is ‘principally due to the decline in co-productions’.

Source: UK Film Council

Interestingly, the median budget of UK independent films (£3.0 million) was higher during the first quarter of 2010 than it has been for some time (between 2007 and 2009 the figure hovered around £1.9 million). This is due to the fact that four of the 18 UK indie features had budgets over £5 million.

The report ends with a projection of full year production activity based on Q1 results. The UK Film Council tentatively suggests the year could see UK production spend hit £907 million in 2010, making it ‘one of the better years on record’.

Given the hefty contribution of inward investment activity to this total, much will depend on the continued attractiveness of the UK as a production base for US studio productions; and the outcome of the general election may prove influential. If we're to believe the pundits, a hung Parliament may further weaken the pound on the international currency markets, and a stronger dollar makes the UK more attractive for inward investment features.

While on the subject of the election, Labour is the only party to mention film explicitly in their manifesto. ‘The strength of Britain’s film industry’, we’re told, ‘is a source of pride'. Labour has committed to maintain the film tax credit and to proceed with the BFI/ UK Film Council merger. In other words, business as we've come to expect it, except of course there’ll be a lot less public money available for film over the next Parliament.

Meanwhile, neither the Liberal Democrats nor the Conservatives mention film in their manifestos, which is hardly surprising given all the urgent matters of State requiring attention (in which context, Labour’s manifesto reference is all the more remarkable).

The Liberal Democrats talk of safeguarding the future of ‘Britain’s creative industries’ by ‘supporting upgrades to our digital infrastructure and taking action to tackle illegal file-sharing’, and of fostering ‘an environment in which all forms of creativity are able to flourish’. This will be principally by means of a Creative Enterprise Fund offering ‘training, mentoring and small grants or loans to help creative businesses get off the ground’. But past evidence suggests getting creative businesses off the ground is rarely a problem- it's keeping them afloat and thriving that proves challenging.

The Conservative manifesto makes only glancing reference to ‘arts and heritage’, but not film per se. This is disappointing, especially given publication late last year of Maud Mansfield’s ‘Report on the British Film Industry for Shadow DCMS’. It's a rather admirable document, both balanced and well-researched.

Alas, none of it found its way into the main manifesto, which talks of ‘making Britain a European hub for hi-tech, digital and creative industries’ (whatever that means). We do know the Conservatives plan to scrap the Regional Development Agencies, which will affect the Regional Screen Agencies whom they co-fund and, therefore, support for film in England.

There's little point in speculating further about future film policy. We'll know more next week...

Russian film market intelligence

Ksenya Leontyeva, Senior Analyst at Nevafilm Research, dropped me a line the other week to introduce further examples of Nevafilm's research (you can find an interview with Ksenya about the company's activities on the Media Salles site).

You may recall last year I wrote about a report on the Russian film industry compiled by Nevafilm and RFilms, published by the European Audiovisual Observatory. I was impressed enough by the work to list it as one of my discoveries of the year last December.

Nevafilm Research has since issued reports on the Russian theatrical market in 2009 and the expansion of digital cinema across the territory (which can be found here). On this latter point, Nevafilm has launched an online database of Russian digital screens, currently listing 382 of such screens in 292 cinemas across 116 cities.

And there's welcome news that the company is currently working on a report on Russian film distribution, covering theatrical, DVD, TV and digital media markets. The report ('The Film Distribution Market In Russia') should be available in early summer (around May, according to the web site) and Nevafilm is now accepting pre-orders. I plan to post further details on publication.

More on East Midlands investments

Last October I posted about the East Midlands Media Investments Fund (EMMI), as featured in EM Media's review of Economic Achievements 2008/09, which I was covering at the time.

Just last week EM Media and the East Midlands Development Agency announced a further round of EMMI investments, totalling over half a million pounds, including four feature films (The Brutal Game, Oranges and Sunshine, Tyrannosaur and The Weekender), a feature documentary (AnDa Union), TV development (Over the Hill and Under Cover), a documentary short (PS, Your Mystery Sender), a Facebook application (GangstaPets), and an online game (Natural Born Racer).

A tenth project will be announced shortly, and EM Media anticipates these investments will together deliver over 90 jobs, generating around £13 million for the East Midlands economy. This latest round of support brings EM Media's total to 37 feature films, 75 short films, 15 TV and 15 games and interactive investments to date.

Further information, including details of the talent involved in the funded projects, can be found on EM Media's web site.

UK cinema admissions, February 2010

The latest monthly admissions issued by the Cinema Advertising Association reveal a slight decline in February 2010 compared with the same month last year, but the year to date total remains marginally higher than in 2009.

February saw 14,890,936 tickets sold, 0.5% down on 2009's tally. This brings the year to date total to 29,474,421, a smidgeon above the same total for January and February 2009 (see Figure 1), making it the best opening two months since 2003.

The link is dead at the moment, but when Pearl & Dean have rectified it you'll find a list of the top ten performing titles in February on their web site (no prizes for guessing the top placed film...).

Figure 1: January and February cinema admissions, 2002 to 2010

Source: Cinema Advertising Association/ Rentrak EDI

UK films at the world box office in 2009

Figures released by the UK Film Council show the UK's share of world box office gross fell to its lowest level since records began in their present form in 2002 (Figure 1). As the chart makes clear, it's a wildly fluctuating picture year-on-year, driven by the performance of a small number of big hits.

UK films grossed around $2 billion in 2009, a 6.7% share of the total global theatrical market, down from 15.1% in 2008 when The Dark Knight, Quantum of Solace and Mamma Mia! topped the rankings (Table 1).

The highest grossing UK films in 2009 were led by Harry Potter and the Half-Blood Prince, Slumdog Millionaire and Sherlock Holmes.

The UK Film Council expects UK market share to climb again in 2010, courtesy of some big inward investment feature releases during the year (starting with Clash of the Titans, which opens in April in most territories, and ending with Harry Potter and the Deathly Hallows: Part I as the year closes).

Figure 1: UK films global market share 2002 to 2009 (click to enlarge)

Sources: MPAA, Screen Digest, UK Film Council

Table 1: Top three UK films at the global box office, 2002 to 2009

Sources: MPAA, Screen Digest, UK Film Council             *still on release as at 25 March 2010