Movie Box Review

For the past several weeks, "season low" and "down sharply from last year" have been repeated phrases in our daily ratings posts, mostly for broadcast network programs but also for cable programs, as well.  What's going on here?  After all, this season started in a very promising fashion with the combined audience for the four major broadcast networks even with the prior season, an almost impossible feat given the the ever increasing media fragmentation in today's world. 

To take a broad view, we looked at the season in three distinct parts, summarized in the table below.  In the first part of the television season (the first 11 weeks from September 19-December 4), ABC, CBS, NBC and FOX combined for a 10.4 Adult 18-49 rating in prime time, exactly the same rating as the comparable period in 2010.  Then from December through most of January, the broadcast networks were pacing 4% behind the 2010-11 season, a decline more in line with past decade or so.  Nothing to worry about, most thought.  But then in late January up until now, the decline in network TV viewing has really picked up steam, pushing a double-digit rate.


            4-Network (ABC CBS NBC FOX) 
      Prime Time Adult 18-49 Combined Rating

                      2011-12  2010-11  % chg
     Sep 19-Dec  4     10.4     10.4      0%
     Dec  5-Jan 22      9.0      9.4     -4%
     Jan 23-Mar  4     10.2     11.1     -9%


To get an idea of the pace of change, the chart below shows the yearly decline in network television viewing for each week of the season to date.  In the first part of the season, there were a few up weeks and a few down weeks but the magnitude of the differences generally were quite small (mostly under 5%).  More recently, however, the weekly swings have become much more pronounced: more in the 10% or even 15%+ range and predominantly on the negative side.

We have been covering the sagging box office in 2011 throughout the year, and now that we have official numbers through Sunday, the year has closed down 3% from 2010.  But the year is much more interesting when breaking it down by quarter.  


1st Quarter (January-March): It is shocking to look back at the early part of 2011 and see how weak the beginning of the year was: down 21% from the same period in 2010 and all the way back down to levels last seen in 2008.  Granted, the January-March 2010 period was inflated by the second wind for Avatar, but if we compare 2011 to 2009 instead, 2011 is still down a very severe 15%.  Numbers like this raised serious questions about the overall health of the industry (discontent with ticket prices, impact of the terrible macro-economy, dissatisfaction with the overall movie theater experience, unintended consequences of shortened theatrical exhibition windows, impact of piracy).  Of course, a huge factor that always needs to be examined is individual motion picture quality.  But could the roughly 30 movies released in this period be so terrible and awful that they account for a 15-21% destruction of business?  (Remember some of the gems from the early part of the year?  Season of the Witch, The Rite, Justin Bieber: Never Say Never, Big Mommas: Like Father, Like Son, Drive Angry 3D, Adjustment Bureau or Mars Needs Moms, anyone?)       


         TOTAL DOMESTIC BOX OFFICE for WIDE RELEASE FILMS
                     by Quarter ($ billions)


           2007     2008     2009     2010     2011   vs 2010

Jan-Mar   $1.973   $1.915   $2.265   $2.430   $1.930   -21%
Apr-Jun   $2.537   $2.500   $2.833   $2.619   $2.774   + 6%
Jul-Sep   $2.370   $2.362   $2.342   $2.415   $2.600   + 8%
Oct-Dec   $2.249   $2.331   $2.605   $2.348   $2.204   - 6%


Jan-Dec   $9.128   $9.108   $10.045  $9.812   $9.508   - 3%

2nd Quarter (April-June) & 3rd Quarter (July-September):  It became clear in the spring and summer that the nation's theaters were humming again, however.  April-June was up 6% from the same period in 2010, and July-September was up an even more robust 8%.  Further, the $2.6 billion in July-September was clearly the best third quarter ever. 

4th Quarter (October-December):  Just when everything started to look sunny again, the calendar turned to Fall and the Holidays.  October-December 2011 was down 6% from last year (not a horrible drop but a complete reversal of the positive trends), but more important it was the worst 4th Quarter in at least five years.

It is impossible with these data to say how much the 3% decline this year was due to movie quality and how much weight should be given to more structural problems with the industry.  But 2012 will be a very important year to watch.  Will the box office decline for the third year in a row?  Can the 1st Quarter be successfully scheduled and marketed, particularly with the gift of such a low base in 2011 to build upon?  We'll keep an eye on the business as the year reveals itself.    


NOTE:  The yearly box office numbers differ from industry figures reported elsewhere for two reasons: we track wide releases only (films released at 400+ theaters, accounting for 95% or more of total box office) and we define the year differently than others.  Since we track the yearly trends by week and not by individual day, we define the year as the first Monday in January through the last Sunday in January the following year.  These figures do not purport to be official industry accounting but instead a tool for identifying and isolating trends and patterns.