Forecast: Cinema to see rapid return in APAC; but not W. Europe

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Ampere Analysis has published revised forecasts for global box office revenues in 2020, now just 25 per cent of the original estimate made in January, showing the devastating effect of coronavirus on the sector.

At the start of 2020, Ampere forecast annual gross box office revenue of $44.5 billion (€37.1bn) globally, a stark contrast to the most recent figure of $11 billion. The worst of the impact will be short-lived however, with the firm predicting that worldwide revenues will recover to $33 billion in 2021, powered by growth in China and other developing theatrical markets. Western markets are expected to continue to suffer the after-effects of the pandemic long after 2020.

Ampere’s latest forecasts for 2021 to 2025 in Asia Pacific show a rapid return to growth, with revenues reaching $15 billion by 2021 and $25 billion by 2025 to match pre-pandemic levels. China is responsible for the lion’s share of this recovery. Q1 is the market’s most lucrative quarter, and the pandemic is therefore likely to stymie growth in 2021 too.

However, the success of recent movie releases in China suggests that consumers are cautiously returning to the theatres. These markets are less reliant on US content and Ampere anticipates that continued local investment in production will further buoy recovery and growth.

It’s a different story in the Western markets, where cinema closures and the reductions in the number of accessible screens looks set to continue. This will limit access to movie theatres, accelerating the downturn already evident in markets such as Germany, France and the US.

Richard Cooper Research Director, Ampere Analysis says: “2020 was the year that the Chinese box office was expected to overtake the US. The pandemic halted that, and instead we will see these two markets vying for the global number one slot in 2021. By the following year however, China will move into the lead, to double the size of the US market by 2025.”

The Asia Pacific markets have become less reliant on foreign movie content over the past few years for their revenue. The void left by the absence of US releases as a result of the pandemic has provided a golden opportunity to promote local content. As a result, a number of high-profile releases in Asia in Q3 and Q4 have begun to resuscitate the local theatrical sector. In Japan, Demon Slayer the Movie: Mugen Train broke all records, earning $140 million to-date at the box office. In China, local titles My People, My Homeland and The Eight Hundred have grossed $460 million and $416 million respectively in China alone, far outstripping the revenue generated by China’s top-performing US releases Tenet ($51 million) and Mulan ($41 millio).

Rahul Patel, Analyst at Ampere Analysis, added: “This sector is characterised by very different performance depending on location.  In the West, theatrical revenue is under serious pressure, while in Asia, we expect the market to bounce back rapidly, driven by the rise of locally produced content. Many of the Hollywood studios are shifting their business models to react and adapt to this geographic change, experimenting with digital release strategies in Western markets and testing the viability of bypassing theatrical release. As a consequence, Asia will emerge as the predominant theatrical market by 2025.”


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