Emerging economies, technology help rev record worldwide grosses
Having already reached astronomical heights the year before, international box office continued to raise the bar in 2010.
Last year marked the first time overseas ticket sales reached $20 billion, thanks largely to a trio of 3D tentpoles: holdover “Avatar,” “Toy Story 3” and “Alice in Wonderland.”
But the biggest growth spurt came from what economists call the BRIC countries (Brazil, Russia, India and China), which became some of the top B.O. territories in 2010, courtesy of a growing middle-class with more disposable income, rising ticket prices, an increased number of quality multiplexes (most of them now 3D-equipped) and improved methods of counting box office.
Also helping to push the global needle were traditionally strong markets like France, which kept pace with its record-setting 2009, and Japan, scoring an all-time high of $2.65 billion vs. its previous $2.54 billion benchmark set in 2004.
Italy and the U.K. — mainstays in the international marketplace — tracked consistently with previous years, if not slightly ahead. There was even notable growth in smaller Asian markets such as Thailand and Hong Kong, both of which saw sizable hikes.
Add in the continued outlook for growth in developing economies, plus a preference for major studio blockbusters regardless of 2D or 3D format, and Hollywood is forecasting continued highs in 2011.
Last year, Chinese totals soared 64% over 2009, with boffo local players like “Aftershock” and “Let the Bullets Fly”; in Russia, Hollywood 3D toons helped lift regional grosses by 56%. Brazil was up an overall 30% in 2010 — the country’s largest upswing since the introduction of the new real currency in 1994 — while year-end projections for India could mean significant growth if studios’ $2 billion estimates hold true through March, when final figures are available.
Still, there were downsides. Big Euro markets Spain and Germany were down from 2009 (3% and 9%, respectively), hit hardest by the World Cup soccer tournament and, in the case of Spain, big unemployment numbers and rampant piracy. But most B.O. observers expected much worse, since the tourney historically has been a drain at the international box office. Staggered second-quarter releases (e.g., “Shrek Forever After” and “Toy Story 3”) avoided soccer’s tackle by launching later in the year, while several high-profile day-and-date launches, including “Iron Man 2” and “Robin Hood,” managed to keep summer revenues in check.
Among markets with the largest 2010 spikes, China seems best poised to parlay that topnotch perf into the coming years.
In an overseas film forum last October, reps from the China Film Producers Assn. said Chinese B.O. is likely to reach between $4.5 billion and $6 billion by 2015, based largely on plans to build additional screens. That would rep a colossal jump from last year’s $1.53 billion total, and if true, would make China the second-largest box office territory in the world behind the U.S.
Local productions accounted for 35% of China’s total box office, with 525 licensed feature films produced in China in 2010, up 15% from 456 films in 2009.
Han Sanping, head of the powerful China Film Group, told local media that Chinese B.O. will continue to expand in 2011, with an expected 8,000 total screens in the country to meet rising demand. It will also be interesting to see if the Chinese movie market opens up after the government reviews the quota system limiting the amount of foreign movies it allows into China; this following a World Trade Organization ruling against China. Currently, the quota allows 20 foreign titles per year.
Giant-screen exhib Imax has been increasing its footprint in China over the past year, including 150 new Imax theaters to be installed within the next five years. As in the U.S., Imax ticket prices in China run higher than regular ducats, though Chinese auds pay slightly more, between $20 and $30 per ticket, depending on the theater and showtime.
“The digitalization of the cinema networks, especially in China, has really helped, because you can have more titles and more programming flexibility,” notes Imax prexy Greg Foster. “And when you make them 3D, those films just seem to take off.”
Foster says Imax plans to begin a heavy rollout of Imax locations in India. “It’s where our attention is focused to become the next big emerging market in the Imax network,” he adds.
In India, local films, as well as an increased presence of Hollywood fare, drove the country’s box office growth last year, improving on 2009’s $1.4 billion total. Studio execs are predicting India will cross $2 billion when all 2010 revenues are counted, yet given the country’s highly complex and regionalized tracking system, final numbers won’t be available until March.
Twentieth Century Fox, which launched its Fox Star division in 2008, is among the studios working to take advantage of India’s B.O. boom. It made good with last year’s “My Name Is Khan,” grossing $39 million worldwide, which includes Fox Searchlight’s $4 million Stateside haul.
“The fact that there’s been some significant growth among major Hollywood pics and Bollywood films, along with the addition of multiplexes, means that India should continue to rise over the next few years,” says Craig Dehmel, Fox Intl.’s senior veep of sales and strategic planning.
Russian box office also figures to continue to leap forward in 2011, after breaking through the billion-dollar barrier in 2010.
Although ticket sales dropped slightly in 2009 to $736 million vs. $830 million in 2008, forecasts are for a return to rising figures buoyed by the continued growth of modern multiplexes, the popularity of Hollywood blockbusters and premium prices for 3D screenings, especially animated fare.
Moscow-based analysts Movie Research Co. predict a 70% jolt in box office grosses in the next five years as some 600 new screens are added to Russia’s exhibition network, bringing the country’s total to approximately 3,000. According to the company’s latest report, ticket prices are also likely to grow by around 45%, from a current average of $6 to $9.
Last year saw the number of admissions in Russia exceed the total population for the first time, when 160 million tickets sold to a population of some 140 million.
But the market remains mostly reliant on young people aged 17-25, which is good news for kid-skewing Hollywood fare like “Shrek” and “Alice in Wonderland.” Those two pics were among Russia’s top 2010 earners. Several high-profile 3D toon sequels enter the market this year, including Paramount-DreamWorks Animation’s “Kung Fu Panda 2,” Warner Bros.’ “Happy Feet 2” and Disney/Pixar’s “Cars 2.”
Russian films, however, accounted for just 17% of box office receipts in 2010, the lowest in five years.
Meanwhile, Brazilian auds embraced a mix of both U.S. and local pics, lifting attendance nearly 20%, repping the nation’s best B.O. perf since 1981.
Analysts attribute the rise to the 3D boom and a combination of a strong economy (Brazil’s gross domestic product grew about 7.5% in 2010) and social programs that led to the expansion of the middle class, with money to spare for the movies.
The 3D format contributed $147.4 million, or almost 20% of Brazil’s cume, thanks to the expansion in total 3D screens from 97 in January 2010 to 262 by year-end. Hollywood 3D product, led by “Avatar,” “Shrek Forever After” and “Alice in Wonderland,” boosted foreign film marketshare by 23% over 2009, while local product grosses rose 14%. Brazil’s top local earner was “Elite Squad 2,” which sold 11 million tickets, repping the largest amount of tickets for a homegrown film since local bizzers started reporting reliable film statistics in 1970.
On a global scale, many say increased traffic for Hollywood tentpoles should continue as studios abandon pics in the $10 million-$40 million budget range to focus on films with the potential for bigger international payoffs. This year will test that strategy, in particular, with more 3D fare and increased screen counts.
“What’s very clear is that 3D has a significantly bigger upside internationally,” Foster says. “There’s a lot of great product this year, and with the growing digital 3D network, 2011 is primed to be a really strong year.”
If the international 3D screen count can continue to keep pace with what Hollywood has to offer, and auds remain willing to pay the premium, there’s no telling how high the 2011 bar might go.
Clifford Coonan, Nick Holds-worth, Mark Schilling, Marcelo Cajueiro and Nick Vivarelli contributed to this report.