Watching movies more at home than in cinemas

[Movie Mania]

July 25th, 2005
http://www.statcan.ca

Statistics Canada reports that Canadians appeared to be more inclined to watch movies in their living rooms than in cinemas in 2003/04, according to new financial data from film distributors and video wholesalers.

A big jump in revenues from sales of DVDs and videocassettes more than
offset a sharp decline in revenues from distributions to movie theatres.

At the same time, overall spending fell for the first time in a decade
while exports of Canadian films and videos soared.

As a result, total revenues hit a record high of $3.4 billion, up 4.9%
from 2002/03 when an 8.0% gain was posted.

In fact, film distributors and video wholesalers had a very profitable
year, with a profit margin of 21.8% compared with 13.4% in 2002/03.

Revenue from distribution to movie theatres plunged 17.3%
to $382.7 million, the first decline since 1991/92.

At the same time, revenue from the wholesaling of DVDs and
videocassettes recorded its biggest increase in five years,
hitting $1.8 billion. This was a 12.9% jump from 2002/03.

Data from the Motion Picture Theatres Survey showed that movie
attendance fell in 2003/04 for the first time in more than a decade, in
the wake of the SARS outbreak and a lack of blockbuster movies. In turn,
this may have reduced the demand for films by movie theatres.
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Note to readers

This release presents results from a survey of the 215 film, video and
audio-visual distributors and wholesalers in Canada.

What Canadians are able to view at movie theatres and at home on their
television screens depends largely on the particular interests and
choices of Canadian distributors and video wholesalers.

Film distributors are companies engaged primarily in distributing film
and video productions to motion picture theatres, television stations and
commercial exhibitors. They are the film industry's intermediaries, the
liaison between producers and the exhibitors. Distributors obtain the
rights to market and distribute films and videos.

Video wholesalers are companies primarily engaged in the wholesaling
of pre-recorded videocassettes, videodiscs and DVDs to retail outlets,
which in turn rent or sell these products to the public.

Videos include videocassettes, videodiscs and DVDs.

Home-video market refers to the rental or sale of videos for playback
on household machines.

Unless otherwise stated, revenues are in current dollars.
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Foreign sales of Canadian-content films and videos hit a
record $321.0 million in 2003/04, up 23.9% from the previous year. (This
figure excludes productions distributed directly to foreign clients by
producers.)


Pre-recorded videos garnering more revenue


Watching pre-recorded videos, especially DVDs, has become a growing
and popular pastime for Canadians.

More than one-half (53%) of the $3.4 billion in total revenue of film
and video distributors came from the wholesaling of pre-recorded videos,
up from 49% in 2002/03 and less than 45% in 1997/98.

In 2003/04, DVDs accounted for 71% of the video wholesaling market.
Four years earlier, their impact was almost negligible. In 2001, the
earliest year for which data are available, less than 20% of Canadian
households had DVD players according to the Survey of Household Spending.
This figure had surpassed the 50% mark by 2003, up from 36% in 2002.

Pre-recorded videos continued to garner more sales even with the
advent of movies on digital-television channels.


Products with Canadian content growing in popularity


Canadian content products continued to show improved revenues
in 2003/04, especially in the television and the movie theatre markets.

In the pay-TV market, Canadian content accounted for 24% of revenues,
up from less than 22% in 2002/03. The same is true for conventional
television, where Canadian content captured 17% of the market, up from 14%.

At movie theatres, Canadian content improved its share to more
than 4%, an increase from about 3% in the previous year and less than 2%
in 2000/01. The increase in share at the movie theatre market was driven
mainly by Quebec movies.


Higher levels of profitability


Film and video distributors and video wholesalers reported total
spending of $2.7 billion in 2003/04, down 5.3% from 2002/03. This was the
first decline in expenses in more than a decade.

This decline followed two years of increasingly slower growth in
expenses. In 2002/03, growth in expenses slowed to 4.8% from a rate
of 9.8% in 2001/02.

The result was higher profits, the third increase in five years.
In 2003/04, profits represented 21.8% of total revenues compared
with 13.4% the year before and 10.8% in 2001/02.

Licensing and royalty payments fell 13% from the previous year. Of
the $838.8 million in total licensing fees and royalties paid out, 11%
were for Canadian products, down from 12% in the previous year.

Available on CANSIM: tables 501-0001 to 501-0007.

Definitions, data sources and methods: survey number 2414.

Selected details from the Film, Video and Audio-Visual Distribution
and Videocassette Wholesaling Survey in table format (87F0010XIE, free)
are now available online. Data from the survey are also available by
province and territory. Users can request special tabulations on a
cost-recovery basis.

To obtain more information, order data or enquire about the methods,
concepts or data quality of this release, contact Client Services
(1-800-307-3382 or 613-951-7608; fax: 613-951-9040;
cult.tourstats@statcan.ca), Culture, Tourism and the Centre for Education
Statistics.