Movie Tickets Sales Are Declining, But Don't Blame SVOD Services

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Global movie theater revenue growth is slowing, but subscription video-on-demand (SVOD) services aren't the reason. Some see a natural link between increased SVOD viewing and lower movie theater attendance, but the one isn't causing the other, says data from London-based Ampere Analysis. It finds that SVOD subscribers are actually much more likely to go to the cinema than are non-subscribers. In 9 of the 15 markets it looked at (Brazil, Japan, Mexico, Netherlands, Poland, Spain, Sweden, U.K., and USA) SVOD customers were twice as likely to go to the movies. 

So what's causing the slow growth in movie theater revenues? High ticket prices, for one thing. Ampere said attendance is lowest in markets where ticket prices are highest. In the markets it examined, Mexico had the lowest ticket prices and the highest attendance, while Scandinavian countries had some of the highest prices and lowest attendance. 

With SVODs gaining in popularity and movie theater attendance declining, Ampere forecasts global SVOD revenues overtaking those of movie theaters in 2019. SVOD revenue in the U.S. outpaced theaters in 2017, and will do the same in the U.K. in 2018 and China in 2019.

"Theatrical video’s global market share as part of the paid-for video space is flat—as the market as a whole is growing, so are theatrical revenues," said Toby Holleran, senior analyst with Ampere. "However, we find consumers are increasingly stacking multiple SVOD services, and with the average monthly subscription at a similar price point to a cinema ticket, this is driving up SVOD revenues at a rate that cinema cannot keep up with."

To maintain a healthy market, Holleran recommends theater owners keep tickets "realistically priced."

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