Movie theatres and drive-ins

Canadians' interest in going to the movies ebbed in 2003/04, according to new data from the Motion Picture Theatres Survey. Movie attendance at theatres and drive-ins combined dropped 4.6%, halting an upward trend of more than a decade.

At the same time, the industry was hit with a drop in box office receipts, total revenues and profits. Profits alone fell 15.8%.

Movie theatres sold nearly 118.2 million tickets during the year, 4.6% fewer than in 2002/03. At drive-ins, attendance fell 4.3% to about 1.5 million.

The total attendance at both movie theatres and drive-ins of just over 119.6 million was at roughly the same level as it was in 2000/01. The decline from 2002/03 occurred hand-in-hand with a small increase in the average admission price, which rose 2.5% to $7.45.

The SARS scare in the spring of 2003, particularly in Toronto and Vancouver, may have contributed to the drop in attendance at movie theatres. In addition, film-makers released fewer blockbuster movies than in the previous year, which may have dampened interest among potential theatregoers.

Older larger theatres, those in operation since at least 2002, contributed significantly to the drop in attendance. A 4.2-million decline in attendance at these theatres accounted for nearly three-quarters of the total drop in patrons.

The industry closed 28 small theatres with an average attendance of 29,562 each. The same year, 11 new theatres were opened, mostly operated by chains, and these reported a much larger average attendance, at 114,736.

Employment in the industry fell only slightly. The number of full-time staff declined 0.7% to 1,960, whereas part-time employment fell 2.5% to 15,519.

Albertans still most avid moviegoers

Albertans on average made about 10% fewer visits to movie theatres and drive-ins in 2003/04. But they were still Canada's most avid moviegoers. On average, each Albertan went to the movies 4.6 times, compared with 5.1 times the year before.

Per capita attendance in Alberta, Prince Edward Island, Manitoba and British Columbia exceeded the national average of 3.8 visits per year.

According to data from the Survey of Household Spending, Alberta households spent an average of $119 on these visits, down from $132.

This keen interest in movies in Alberta may be the result of high per capita income, a younger age structure and a proportionately larger number of chain-operated theatres in metropolitan areas than in most other provinces and territories.

Residents of Newfoundland and Labrador have had the lowest per capita attendance for years. This may be due to the concentration of theatres in a few larger urban centres and a lack of theatres in the numerous small communities.

All provinces and territories reported declines in attendance, except Prince Edward Island, where ticket sales were up 4.8%, and Nova Scotia, where they rose 0.7%. The declines ranged from 1.7% in Quebec to 12.9% in the combined territories.

Biggest decline in attendance at small theatres

The first drop in attendance at movie theatres, excluding drive-ins, in over a decade occurred in 2003/04, after an average annual rate of increase of about 5.4% between 1991/92 and 2002/03. Movie theatres recorded total attendance of 118.2 million in 2003/04, down 4.6% from the previous year.

Some 24 movie theatres reporting total attendance of 777,338 closed in 2003/04. This was more than offset by the opening of 11 new movie houses, which reported 1,262,101 visits.

The decline in attendance in 2003/04 can be attributed to the older movie theatres, that is, those in operation since at least 2002.

Small older theatres, those with operating revenues of less than $500,000, recorded the biggest percentage decline in attendance at 19.6%. At the same time, medium-sized older movie theatres recorded 6.3 million visits, down 7.5%, while larger theatres reported 104.9 million visits, a 3.9% drop.

The overall growth in attendance over the last decade has increased the market share of attendance at larger theatres at the expense of smaller theatres.

In 1991/92, small theatres accounted for more than one-half (54%) of all theatres and 16% of attendance. By 2003/04, their share was down to 43% of all theatres and only 5% of attendance.

In contrast, over the same period, the share of larger theatres increased from 27% to 44% of all theatres, while their share of attendance rose from 67% to 89%.

Although movie theatre attendance decreased, the number of seats remained virtually unchanged, resulting in lower capacity utilization. The proportion of seats filled, on average, fell from 21% to 18%.

Decline in profits, profit margin

The movie theatre industry earned $1.2 billion in operating revenues in 2003/04, down 1.0% from the previous year. Admission receipts accounted for 69% of this total, while most of the remaining revenues came from refreshment bar sales.

As a whole, the industry recorded an operating profit of $54.7 million in 2003/04, a 15.8% decline. The profit margin of movie theatres overall also fell from 5.3% to 4.5%.

Movie theatres, excluding drive-ins, reported a total profit of $52.7 million, down 16.7%.

Only larger theatres were profitable, earning an average profit of $217,804, although this was down 16.9%.

Medium-sized theatres incurred an average loss of $19,545, and small theatres, an average loss of $2,844.

Chain-operated movie theatres earned more than nine times the average profit of the independently operated theatres. This is because most of the chain theatres are multi-screen theatres located in urban centres.

In 2003/04, the average profit for each chain theatre was about $168,000, compared to $18,000 for each independent.

The 11 newly opened movie houses (mostly chain theatres) accounted for 1.1% of total attendance. But they contributed 3.3% to the total profits of movie theatres. Four new larger cinemas earned a total profit of $1.9 million, whereas seven new small- and medium-sized theatres had losses of about $106,900.

The decrease in attendance for larger older theatres was accompanied by a decline in profits, which fell from $64.4 million to $53 million in 2003/04. Lower operating revenues and higher occupancy costs also contributed to this decline.

Drive-ins: Decline in attendance, but profits up

Total attendance at drive-in theatres, about 1.5 million, accounted for only 1.2% of all theatre attendance in 2003/04. Their attendance was down 4.3%, the eighth consecutive decline. Four drive-ins closed during the year.

Despite the drop in attendance, operating profits of drive-ins rose 14.9% to $2.0 million. Their profit margin also increased from 10.0% to 11.5%.

Factors that contributed to the gain in profits included a 16% cut in full-time staff to 89, and a resulting 11.4% drop in the salary budget to $3.6 million. In addition, drive-ins increased their average admission price by 3.4% to $7.54.

Available on CANSIM: table 501-0010.

Definitions, data sources and methods: survey number 2416.

Selected details from the Motion Picture Theatres Survey is now available for free online in the publication Movie Theatres and Drive-ins: Data Tables (87F0009XIE, free) are now available online. Data from this survey are also available by province and for the territories. Researchers 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 (telephone: 1 800 307-3382 or 613-951-7608; fax: 613-951-9040; cult.tourstats@statcan.gc.ca), Culture, Tourism and the Centre for Education Statistics.