Motion picture theatres

View the most recent version.

The silver screen lost much of its lustre for Canadian movie-goers in 2005 as attendance at cinemas slid, putting a profitability squeeze on the motion picture theatre industry, according to data from the Motion Picture Theatres Survey.

The analysis in this release uses survey data that are based on establishments whose combined revenues account for about 95% of the industry's total revenues.

Cinemas, including indoor theatres, drive-ins and film festivals, sold just under 105.2 million tickets in 2005, a sharp 7.8% decline from 2004. The decrease came on the heels of a modest 2.2% gain in 2004.

According to the Cineplex Galaxy Income Fund 2005 annual report, there were few major blockbuster films released during the important summer months of 2005. This may have dampened interest and accounted for some of the decline in attendance. Other factors may include ticket prices and the growing popularity of cheaper home entertainment equipment, such as DVD players.

The motion picture theatre industry recorded total operating revenues of about $1.2 billion, down 5.3% from 2004, while operating expenses edged up 1.3%. Salaries and wages increased by 1.9% from 2004 to 2005.

As a result, operating profits totalled just $29 million, a substantial decline from $110 million in 2004. The industry posted an operating profit margin of 2.5% in 2005 compared with 8.9% in 2004.

Theatres in Ontario and Quebec accounted for about two-thirds of the total national operating revenue. Ontario theatres dominated the country, earning 40% of total operating revenues in 2005. Quebec theatres accounted for 20%, while those in Alberta and British Columbia each represented 14%.

Ontario theatres posted an operating profit margin of 4.8%, above the national average. However, Quebec theatres posted a negative profit margin (-12.6%).

Large chains dominate motion picture industry

The top five chain-operated theatres, ranked on the basis of operating revenues, dominate the industry in terms of revenues, expenses and profits, but also in terms of attendance and concession receipts.

These top five companies accounted for about four-fifths of total attendance in 2005. However, these theatres saw a decline in attendance of 9.0% during the year, compared with a marginal drop of 0.5% for the smaller theatres.

These top five companies also represented 81.4% of the total national operating revenue in 2005, down slightly from 82.5% in 2004.

Operating revenues for these large companies declined 6.7% in 2005, compared with an average decline of 5.3% for the industry as a whole.

At the same time, operating expenses edged up 0.3% for the large chains, well short of the industry average of 1.3%.

As a result, despite the nominal increase in expenses, large theatres saw their profits plunge by 77.5% from 2004 to 2005, a slightly larger decline than the industry average of 73.5%.

The smaller companies in the motion picture theatre industry experienced a decrease in their profits as well, but for different reasons than their large-chain counterparts.

Operating revenues for these smaller companies actually increased by 0.8% in 2005, compared with the average 5.3% decline for the industry as a whole.

However, operating expenses of these smaller companies rose 5.7% in 2005, outpacing the 1.3% increase for the industry. This resulted in a 53.2% drop in their profits between 2004 and 2005.

In 2004, the top five companies represented 83.6% of total industry operating profits. By 2005, this had dropped to 71.1%. At the same time, the rest of the motion picture theatre industry saw their share of the total profits increase from 16.4% to 28.9%.

Revenues derived from the sale of food and beverages followed a similar pattern. In total, revenues from these concessions fell 3.3% to $334.2 million over the same time period.

The top five companies saw a 4.1% decline in concession receipts, whereas smaller theatres recorded a 4.5% increase.

However, concession receipts from these smaller companies accounted for only 6.1% of the overall industry total.

Albertans most avid movie-goers

On a per capita basis, each Canadian made 3.2 visits to the movies on average in 2005, based on population projections for the year and the number of paid admissions to movie theatres from the survey.

Per capita attendance in only three provinces (Alberta, British Columbia and Saskatchewan) exceeded this national average.

Alberta residents are the nation's most avid movie-goers, with an average attendance of 5.2 visits each year. This keen interest in Alberta may be the result of high per capita income and a younger population. The 2005 General Social Survey confirmed the ongoing trend that young people aged 15 to 24 are the greatest cinephiles.

Albertans were followed by residents of British Columbia, who went to the movies about 3.6 times in 2005. Saskatchewan residents went 3.3 times.

According to the Survey of Household Spending, households in British Columbia, Alberta and Saskatchewan increased their spending on movie theatres from 2004 to 2005. At the same time, spending by residents in provinces in Central and Eastern Canada fell.

Alberta households spent an average of $126 on movie theatres, compared with $70 spent by households in New Brunswick.

Households in Quebec and New Brunswick decreased their spending by more than 10% on movie theatres, followed by households in Nova Scotia (-7%) and Ontario (-6%).

Canadian movie-goers spent an average of $3.18 on concessions, up 5% from 2004.

Definitions, data sources and methods: survey number 2416.

Selected information from the 2005 Survey of Service Industries: Motion Picture Theatres are accessible in the publication Motion Picture Theatres and Drive-ins: Data Tables (87F0009XWE, free), now available from the Publications module of our website. These tables include breakdowns of data by province.

For more information about the survey, or to enquire about the concepts, methods or data quality of this release, contact Conrad Ogrodnik (613-951-3496; fax: 613-951-6696; conrad.ogrodnik@statcan.gc.ca), Service Industries Division, or Norman Verma (613-951-6863; fax: 613-951-6863; norman.verma@statcan.gc.ca), Culture, Tourism and the Centre for Education Statistics.

Table(s).