LONDON — U.S. exhibition profits will rise 30% by 2006, when domestic box office will top $10 billion, according to a new report from U.K.-based exhib research specialist Dodona Research.
In “Moviegoing USA,” Dodona observes that the screen closures that were expected to follow the spate of exhib bankruptcies in the past two years have failed to materialize. The number of U.S. screens has fallen by just 421 since 1999, even though the seven largest companies have closed 2,400 screens.
“Many nonviable screens are suddenly becoming viable and being re-opened by other exhibitors,” says the report’s author, Karsten Grummitt.
He argues that the bankruptcies were the result of excessive leveraging, resulting in short-term debts that were untenable, while overexpansion spread revenues too thinly.
Since 1990, the number of cinema screens has grown at twice the rate of admissions.