Slower B.O. growth seen

Spending estimated to rise only 3%, admissions only 0.3%

The U.S. box office may prove relatively sturdy in the face of a sluggish economy, yet admissions and ticket sales are likely to grow much more slowly in the next five years than they did in the previous five, according to the latest survey by Gotham investment bank Veronis Suhler.

Box office spending will rise an estimated average of 3.3% a year through 2005, vs. the 6.3% compound annual growth rate for 1995-2000. Spending at the B.O. was virtually flat in 2000 at $7.5 billion, as calculated by Veronis Suhler, which sees the figure rising to $8.8 billion in 2005.

Admissions will grow only 0.3% on average over the next five years, compared with a 2.1% compound annual growth rate for the past five, although ticket prices will rise steadily. Admissions were off 4.4% in 2000 and will be down an estimated 1.9% this year (partly due to fewer movie screens as theaters are shuttered and exhibitors go bankrupt) before rising 1.2% in 2002, says the annual Communications Industry Forecast.

This ambitious, 370-page compilation of figures and growth projections measures consumer usage and spending, advertising and other trends across a swath of industries from film, TV, radio, music, books and magazines to direct mail and yellow pages.

The volatility of the economy, markets, consumer taste and individual pockets of the entertainment biz make any predictions questionable.

Nonetheless, the study is laced with intriguing factoids. Movie buffs on both coasts will be surprised to note that the average American spent a whopping total of $32.49 at the box office last year. That’s expected to rise to $36.46 in 2005.

The average consumer watched 1,633 hours of TV last year and spent 124 hours online. The time consumers listened to recorded music dropped 8.8% and they spent 7.8% less time reading books.

Optimistic on b’cast, Net

Ad spending in broadcast television surged to $41.9 billion last year and, when the report went to press last spring, was expected to ease to $40.7 billion this year. Given a steep and prolonged dip in the ad market, however, that may be optimistic. So may the forecast for Internet ad spending, which Veronis sees rising at a compound annual rate of 7.3% to reach $28.3 billion in 2005 (from $11.6 billion in 2000).

Generally, the report sees the entertainment biz facing sobering trends this year in the slowing economy, higher costs for film and television production following new contract with writers, a downturn in music sales and lagging interactive entertainment sales. Electronics manufacturers “are beginning to stretch consumers’ wallets” by offering too many new entertainment technologies like DVD players, high definition television and digital video recorders.

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