American movies raked in $25.4 billion from all revenue streams from international markets, surpassing the domestic distribution total for the first time.
So concludes the latest edition of Kagan Research’s annual film survey, “The Business of Movie Production & Distribution 2006.” The U.S. domestic tally came to $24.9 billion. Both figures take into account moneys collected as theatrical rentals, revs from homevideo, TV license fees, hotel and airline exposure as well as nascent video-on-demand and IPTV deals. Movies analyzed include both major studio and U.S. independent releases.
Growth rates in domestic box office and homevid markets slowed in 2005 and will continue to flatten in the coming years, according to Derek Baine, an author of the report.
By contrast, Baine predicts that international movie markets are going to become larger revenue sources for film distributors, with emerging entertainment technologies contributing to increased penetration.
By 2014, Kagan projects global movie markets will reach $38.2 billion, with foreign homevideo constituting the largest portion of that revenue stream at $17.7 billion.
Overall, Kagan’s 10-year projections point to total movie distribution revenues (international and domestic combined) reaching a whopping $73 billion in 2014.
The 212-page tome, now in its 13th edition, also addresses the following issues:
- Domestic DVD penetration, which Kagan estimates will near critical mass between 2006 and 2009
- Studio earnings, which are improving for most of the half-dozen Hollywood players, with average EBITDA hitting 33% in 2004
- Tentpoles and franchises, which are, in Kagan’s view, growing in importance to the bottom line of these major producers.
In keeping with some recent moves at the studios, less is apparently more: Studios that have shaved their release schedules or are sharing the financial risk on parts of their slate seem to be faring better on the bottom line.