Fitch: Attendance Remains Challenging for US Movie Exhibitors

NEW YORK--(BUSINESS WIRE)-- Annual movie attendance growth will remain challenging for US movie exhibitors, with secular risk contributing to long-term attendance declines in the low single digits, according to Fitch Ratings. Movie attendance in the US has been historically volatile due to the quality of the film slate in any given year. The movie exhibitor industry is a hit-dependent, cyclical industry, with box-office revenue performance having little correlation to GDP performance.

The film slate in 2015 delivered strong box office with revenues up 7.4% following negative 5.2% growth in 2014, according to Box Office Mojo. The number of successful releases, coupled with PLF ticket sales and a growing number of theater amenities, resulted in industrywide attendance growth of 4.1% and a 3.1% increase in average ticket price.

Year-over-year comparisons will be difficult in 2016 as 2015 was a record year. The strong film slate in 2016 is expected to ease attendance declines as many highly anticipated sequels and spin-offs have a likelihood of box office success. As of July 24, 2016, industrywide box-office revenues are up 2.2%, following a strong first half of the year, according to Box Office Mojo. Fitch believes the film slate will support industrywide box-office revenue levels with relatively flat attendance and low single-digit growth in average ticket price.

The quality of the film slate is still as important as ever, but exhibitors are now putting more emphasis on amenities to attract consumers. Premium seating, high quality picture and sound (exhibitors offering/building own brand of Premium Large Formats) and gourmet concession options are some strategies exhibitors have employed to combat attendance declines.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

Related Research

An Exclusive Preview (Fitch's 2016 U.S. Movie Exhibitor Industry Report)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=882379

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Source: Fitch Ratings

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