Film, video and audio-visual distribution

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Canadians showed a growing interest in watching movies at the cinema rather than in their living rooms in 2004/2005, according to data for the film distribution and video wholesaling industry.

Revenues from distributions to cinemas rose sharply, while revenues from sales of DVDs and videocassettes levelled off after surging since 2000.

At the same time, overall spending by the industry grew slightly after declining the year before. Exports of Canadian films and videos expanded, but at a much lower rate than in the previous year.

Total industry revenues climbed to more than $3.5 billion in 2004/2005, up 3.0% from the previous year. While this increase was less than the 4.8% revenue gain the year before, the profit margin improved to 22.7% from  21.8% in 2003/2004.

Revenue from distribution to movie theatres grew 16.6% to $446.3 million, while revenue from the wholesaling of DVDs and videocassettes remained unchanged at just over $1.8 billion.

Data from the Motion Picture Theatres Survey, released in The Daily on July 14, 2006, showed that movie attendance increased in 2004/2005. This was mainly because of a 20.4% rise in attendance at drive-in theatres. In addition, Canadian households spent an average of $112 on movies at the cinema in 2004/2005, up from $106 in 2003/2004, according to the Survey of Household Spending.

Foreign sales of Canadian-content films and videos reached $331.9 million in 2004/2005, up 3.4% from the previous year. (This figure excludes productions distributed directly to foreign clients by producers.)

Sales of pre-recorded videos slowing down

Sales of pre-recorded videos may have slowed down in 2004/2005, but Canadians have not given up watching their favourite movie videos at home. Sales of pre-recorded videos still account for more than half of the total revenues for distributors.

In 2004/2005, 51% of the $3.5 billion in total revenue of film and video distributors came from the wholesaling of pre-recorded videos, especially from DVDs. That was down from 53% in the previous year, but more than the 49% reported in 2002/2003.

DVDs, the favourite format in Canada, accounted for 77% of the video wholesaling market, up from 71% in 2003/2004.

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. By 2003, this proportion had surpassed the 50% mark, and by 2004 it was approaching 70%.

Products with Canadian content maintain market share with revenue growth

Canadian content products continued to show improved revenues in 2004/2005, especially in the movie theatre and the pay-TV markets. This growth in revenue was just enough to maintain their overall share of the domestic market at 11%, the same as in 2003/2004.

In the pay-TV market, Canadian content accounted for 24% of revenues, the same as in the previous year, but up from less than 22% in 2002/2003. The same was true at movie theatres where Canadian content maintained its 4% share of the market, up from 3% in 2002/2003.

In the conventional television market, Canadian content share fell from 17% in 2003/2004 to 16%, but up from the 14% share in 2002/2003.

Improved levels of profitability

Film and video distributors and video wholesalers reported total spending of more than $2.7 billion in 2004/2005, 2% higher than in 2003/2004.

The modest increase in expenses did not affect the bottom line of the industry as profits rose to $802.1 million dollars. This represented 22.7% of total revenue, up from 21.8% in 2003/2004, and a significant increase over profits of 13.4% reported in 2002/2003.

Licensing and royalty payments rose marginally from the previous year. Of the $847 million in total licensing fees and royalties paid out, 17% were for Canadian products, up from 11% in the previous year.

Available on CANSIM: tables 501-0001 to 501-0004.

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 from the Publications module of our website.

Data from the survey are also available by province and territory. Users can request special tabulations on a cost-recovery basis.

For general information, contact Client Services (toll-free 1-800-307-3382; culture@statcan.gc.ca). To order special tables or to enquire about the concepts, methods or data quality of this release, contact Fidel Ifedi (613-951-1569; fax: 613-951-1333; fidel.ifedi@statcan.gc.ca), Culture, Tourism and the Centre for Education Statistics.

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