Current State of the 3D Theatrical Market
In March 2020, the Theatrical Market Statistics for 2019 were released by the Motion Picture Association of America. MPAA THEME Report provides the numbers for both theatrical and home entertainment. This report shows that there is still a desire from some of the top movie producers with 17 of the top 25 movies produced available in 3D; however overall number of 3D movies produced was down.
Additionally, the number of movie theater screens is down slightly included a small percentage of 3D movie screens. however, the public’s demand overall has been dropping slightly on average over the years with some ups and downs and had a significant drop in 2018 followed by a small drop in 2019.
Home entertainment shows promise as an entertainment source with online subscription subscriptions fast approaching the numbers long held by Cable TV. This could be an opportunity for 3D content if only 3D viewers in the form of televisions, tablets, and smartphones can make headway in the home market.
The main problem with this report is that it concentrates heavily on the US and Canadian markets. It would be great to have useful box office receipt information and demographics by either region or country for the international market; however, there is still some useful information for the international market. The US and Canadian markets combined represents approximately 31% of the total global. The international Market makes up 73% of the total global receipts. The Asia Pacific region makes up over 39% of the global market with China the largest international market making up 26% of the international receipts. Japan had the largest increase in the Asia Pacific region with a 19% increase in receipts.
Major Movie Producers Still Producing 3D
Overall movie producers are not producing as many 3D movies as in the past. However, the top grossing films are mostly being released in 3D. The number of 3D releases has dropped the past four years. 2015 was a very big year for 3D movies with 64 features released. This includes both major releases and some releases only released in specific markets. In 2017 there were 51 3D releases, in 2018 the number dropped to 36, a significant drop of over 29% and again in 2019 to 28, a drop of 22%. I found an excellent list listed at: https://en.wikipedia.org/wiki/List_of_3D_films. The following chart shows a breakdown of the number of 3D releases shown by Wikipedia.
| Figure 1: 3D Movies Produced (Wikipedia) |
According to the report the number of 3D releases for the top 25 films was 18 out of 25 for 2017 ,16 out of 25 in 2018 and 17 out of 25 for 2019.
Theater Owners Commitment Waning?
The number of 3D capable screens has been increasing every year with the number of analog remaining at a low level with little change over the past few years; however, the number of 3D capable screens has dropped slightly in 2018 and again in 2019 in the US and Canada. In the US and Canada 3D capable screens increased by 3.27% in 2017 and decreased by less than 1% in 2018 while non 3D digital screens have been slowly increasing with only a 0.5% increase in 2017, increased by 1.1% in 2018 and 2% in 2019.
| Figure 2: US/Canada Types of Screens (MPAA 2019 THEME Report) |
The Asia Pacific region has the most theatrical screens with 86,528 total screens and 77% of these screens were 3D digital screens. The next largest region for numbers of theatrical screens is the US and Canada with 4,3647 total screens and 38% of these screens were 3D digital screens. The EMEA region is close with 44,167 screens; however, 46% of these screens were 3D digital screens. Latin America had the fewest number of theatrical screens with 14,986 which increased from 12,721 total screens in 2017. Of these screens, 41`% were 3D digital screens.
Movie Goers Still Not Committed
The movie revenue for 3D films is still not matching the number of screens available to show 3D releases. In the US and Canada, the overall box office receipts have steadily increased except for the last two years which saw a drop in receipts. Between 2008 and 2010 3D receipts had a significant increase. During this time non-3D receipts decreased. However, in 2011, receipts for 3D films fell slightly and in 2012 and 2013 remained relatively flat. In 2015, 3D receipts rose but not to the level seen in 2010. In 2018, with overall box office receipts increasing by 7%, 3D receipts fell a whopping 34% and then fell another 4% in 2019.
Figure 3: US and Canada 3D and 2D Box Office Receipts Comparison (MPAA 2019 THEME Report)
Globally, box office receipts overall rose less than 1% and receipts from 3D releases went down 2.9%.
| Figure 4: International 3D and 2D Box Office Receipts Comparison (MPAA 2019 THEME Report) |
I have a bit of dissonance with receipts numbers overall. One would expect that the 3D capable screens would bring in their fair share of receipts. However, this was not the case. In the US and Canada, 3D receipts only comprised only 6% of the total receipts, whereas 38% of the total screens were 3D capable screens.
One must be careful of these numbers as a representation of interest in 3D movies and movies in general. With an almost 40% increase in ticket prices since 2005 and accounting for this price.
| Figure 5: Average Ticket Prices (MPAA 2019 THEME Report) |
Is it that the ticket prices have affected ticket sales or has there been fewer movies that people are willing to go see at the rising rates with some really good movies in 2009? It would be interesting to have the average 3D ticket prices over the same period. In that way we could view number of tickets sold for both 2D and 3D movies. We could make assumptions regarding the ticket pricing difference between 2D and 3D; however, we would only be guessing, and the results would not be useful. In my area, looking at the same movie in 2D and in 3D at the same time, the 3D ticket costs an additional $4 to $5. In the end, movie producers must balance the ticket prices with the number of tickets sold to maximize their profits.
| Figure 6: Estimated Number of Admissions (MPAA 2019 THEME Report) |
Home Entertainment Spending Increasing Globally
MPAA’s report shows that consumer spending globally for entertainment spending has increased over the past three years with over 5% increase between 2015 and 2016 and almost 8% increase between 2016 and 2017. Entertainment spending has increased 9.5% between 2017 and 2018. Of this increase, digital home entertainment makes up 44% of the total entertainment spending and theatrical entertainment spending makes up 42% of the total entertainment spending.
| Figure 7: Global Entertainment Consumer Spending ($US Billions) (MPAA 2019 THEME Report) |
For the US, MPAA’s report shows that consumer spending for entertainment spending has increased over the past three years with over 5% increase in 2016 as compared to 2015 and a 10% increase in 2018 as compared to 2018. Of this increase, digital home entertainment makes up 49% of the total entertainment spending and theatrical entertainment spending makes up 34% of the total entertainment spending.
| Figure 8: US Entertainment Consumer Spending ($US Billions) (MPAA 2019 THEME Report) |
Note that Globally, Digital Entertainment spending only surpassed Theatrical entertainment spending in the past year; however, in the US Digital Home Entertainment Spending Surpassed Theatrical Entertainment spending in 2016.
This is an excellent opportunity for the movie industry to extend the life of movies by releasing the movies into the home market. Additionally, this could provide an excellent opportunity for 3D movies to release in the home market given the right 3D screens, content, and distribution. The demographics quoted in this report provides an excellent starting point as to which demographics to use as a starting point. This could potentially be used to rebuild interest in 3D movies which in turn could reinvigorate the entire 3D and immersive viewing industry including theaters.
Ed Mazza Marketing and Communications Consulting Blog 