PwC Predicts Bright Future For Film Industry
The Toronto International Film Festival is just days away and the future looks bright for the film industry, according to PwC. The firm’s study shows global consumer spending on filmed entertainment will grow at a 5.9% compound annual rate over the next five years reaching US$114.8 billion in 2015 from $86.2 billion in 2010. This growth is strongest in markets showcased at TIFF, and Canada’s biggest film festival will screen more than 300 films from over 60 countries.
Producers from both major and emerging markets like China, Vietnam, Romania, Russia and India will see high compound annual growth rates ranging from 10% – 26%, between now and 2015. At the same time markets in North and South America, Europe and the Middle East will see moderate to strong gains between 3% and 9%.
“Revenues for filmed entertainment will be fuelled by the youth market and a variety of options for consumers to access movies. Watching movies online and via mobile devices will supplement box office spending on filmed entertainment,” says Michael Paterson, partner in PwC’s Entertainment & Media practice. “Expect to see higher quality film experiences for consumers as the industry looks for new ways to stay competitive by differentiating the way we access movies and enhancing the movie going experience.”
| Filmed Entertainment Market, 2011 – 2015* | |||||||||||||||||||
| Country | Spending in $US millions | 2011-2015 CAGR (%) | |||||||||||||||||
| 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||
| Canada | 3,956 | 4,123 | 4,304 | 4,477 | 4,641 | 4.2 | |||||||||||||
| US | 36,842 | 38,853 | 41,151 | 43,448 | 45,686 | 5.4 | |||||||||||||
| France | 4,002 | 4,195 | 4,372 | 4,538 | 4,683 | 4.2 | |||||||||||||
| Germany | 3,750 | 3,871 | 4006 | 4137 | 4,241 | 3.7 | |||||||||||||
| Italy | 2,123 | 2,228 | 2345 | 2463 | 2,552 | 4.4 | |||||||||||||
| United Kingdom | 6,047 | 6,362 | 6711 | 7069 | 7,364 | 4.9 | |||||||||||||
| Czech Republic | 140 | 147 | 156 | 163 | 169 | 4.9 | |||||||||||||
| Romania | 40 | 45 | 50 | 55 | 60 | 11.4 | |||||||||||||
| Russia | 1,734 | 1,972 | 2208 | 2375 | 2,547 | 10.7 | |||||||||||||
| Israel | 170 | 177 | 184 | 192 | 198 | 4.1 | |||||||||||||
| South Africa | 319 | 337 | 357 | 372 | 389 | 4.9 | |||||||||||||
| Australia | 3,872 | 4,115 | 4353 | 4585 | 4,810 | 5.8 | |||||||||||||
| India | 2,058 | 2,325 | 2561 | 2819 | 3,095 | 10.8 | |||||||||||||
| Japan | 7,403 | 7,812 | 8,296 | 8,686 | 8,932 | 3.1 | |||||||||||||
| Argentina | 254 | 279 | 304 | 332 | 360 | 8.9 | |||||||||||||
| Brazil | 1,499 | 1,641 | 1,790 | 1,937 | 2,070 | 8.6 | |||||||||||||
| China | 2,716 | 3,508 | 4,358 | 5,269 | 6,254 | 26.0 | |||||||||||||
| Vietnam | 8 | 10 | 12 | 14 | 17 | 23.2 | |||||||||||||
*Includes consumer spending at the box office, cinema advertising, in-store rental market, physical sell-through market, and electronic distribution.
According to PwC, worldwide box office spending will increase from US$33 billion in 2010 to US$48.7 billion by 2015, an 8.1% compound annual interest gain, supported by the growth in 3-D film screens. The increase in the number of 3-D screens will raise average prices which consumers will pay, keeping movie admissions steady. In 2010 in Canada, there were 350 3-D screens and the average price of a single movie ticket rose 5.5% over 2009, the first gain of more than 5% since 2000.
“While consumers may become more selective in choosing to see a 3-D film over the next few years, we believe 3-D and other innovations will have a long-term positive impact on admissions because these enhancements help to distinguish the theatrical experience from the home video and online experiences of watching a movie,” says Paterson.
In Canada, film and TV production generated about $6.8 billion in GDP in the Canadian economy in 2010 and led to the employment of over 117,000 individuals on a full-time basis across the country. North America will continue to be the biggest region for filmed entertainment, growing at 5.2% from US$39 billion in 2010 to over US$50 billion by 2015.
Ontario, British Columbia and Quebec have the highest share of total volume production in Canada at 39%, 27% and 25% respectively.
“Tax incentives are a critical part of the growth of the film industry, including domestic and international co-productions,” says Tracey Jennings, PwC’s Canadian Entertainment & Media Leader. “PwC continues to assist clients to obtain these tax credits which help to offset the cost of production in Canada. We have also seen many of the provinces enhance, and others introduce, digital media tax incentives which are becoming more important in a world of digital convergence. “
