Movie-going has been stagnant in the U.S. for many years now, and revenue actually fell by 2% last year with American on average seeing 4.5 movies per year in theaters. Modest revenue growth over the past several years has come from higher ticket prices as large theaters continue to retrofit their service environments with better seating and higher quality fare. The movie biz in the U.S. has been a little slow. But globally speaking, movie receipts are up a full 5% and are now over $40 billion annually. Some American movies do very well overseas.
In fact, one could say that the U.S. market should be a secondary consideration when developing movie products since the market is only $11 billion and is contracting. Perhaps that's why producers make Fast and Furious movies so fast and furiously. China alone represents $8 billion of the market, and the government there strictly controls what its citizens are allowed to watch. The most successful locally-made movie in Chinese history? You guessed it. Wolf Warrior 2. The Chinese are hungry for better content.
Indeed some American movies seem to be made specifically for the Chinese market, but Russia now represents a billion dollars with 22% growth from the previous year. Opportunities abound. Major studios released 130 movies last year, and only a fraction of those were distributed in China so the potential for more growth in that country as well as growth in more international markets, such as Saudi Arabia and Russia, is great. This is certainly good news for an industry that has struggled domestically amidst a fast-growing home entertainment market and competition from upstarts like Netflix, a company that has become more of a competitor than a distribution partner in recent years. Hopefully more revenue will result in higher quality products. Hopefully.
Discussion: How many movies do you see in theaters per year? How many movies do you view at home? How should marketers approach product development for these emerging international markets? What should they do differently to penetrate international markets?
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