DIGITAL SCREENS BOOST FROM 3D

SAWA News June 2009

Source: Screen Digest

 

DreamWorks Animation notches milestone with record opening

·         3D now consistently generates the majority of box office revenue from fewer than half the screens

·         3D versions generate on average three times the revenue of standard 2D screen in the US

·         This superior ratio has not (so far) been diluted by a corresponding increase in 3D screens

 

DreamWorks Animation’s first 3D effort Monsters vs Aliens grossed  $59.3m  from  an  estimated  7,300  screens  in  4,104  theatres  in  its  opening weekend 27 March 2009, marking both the largest opening  of any title  in 2009 and the  largest ever take from 3D screens  in a  US  opening  weekend  performance.  The  majority  55.0  per  cent  ($32.6m)  of  the  box  office  came  from  screens with  3D  capability,  which make up  less  than 30 per cent of  the  total. Nine  titles have  been  released  since  the  format’s  first  outing  in  2005 where  a  2D  version was available (see chart), plus a further five 3D-only releases.  This number will more than double again by end 2009.

 

Audiences are already demonstrating a heavy preference for 3D to  the extent  that  the majority of a  film’s revenue  is now consistently  from 3D (where a 2D was also available), on fewer than half of the  allocated  theatres.  The  first  two  3D  feature  film  releases  in  2009,  Lionsgate’s  My  Bloody  Valentine  and  Coraline  from  Universal’s  subsidiary  Focus  Features,  3D  screens  generated  approximately  three quarters of  the  total box office  from  fewer  than half of  the  allocated theatres (albeit both more moderately sized releases). So  3D’s box office share has continued to rise to an average 68 per cent  of  those  films’ box office  in 2009  (based on  two  releases and one  opening weekend of My Bloody Valentine), up  from a 56 per cent  share in 2008 and just 36 per cent on average in 2007. 3D screens  accounted for 1.8 per cent of US box office in 2008.

 

Monsters vs Aliens set a new record for box office opening from 3D  screens, eclipsing  the previous  record held by Hannah Montana  in  February 2008 with $31.1m— although the latter’s gross was derived  from less than one third of the release width (683 theatres). However,  Monsters  vs Aliens  3D’s  share was  undoubtedly  boosted  by  $5.1m  from 143 Imax domestic locations, equivalent to 9.0 per cent of box  office  from  just  2.0  per  cent  of  theatres.  Imax’s  contribution  was  therefore  instrumental  in pushing 3D’s share of  revenues over  the  50 per cent marker for this title.

•    3D now consistently generates the majority of box office  revenue from fewer than half the screens  

•    3D versions generate on average three times the revenue  of standard 2D screen in the uS  

•    This superior ratio has not (so far) been diluted by a  corresponding increase in 3D screens Cinema

 

Together, Monsters  vs Aliens 3D  screens  secured over  three  times  the revenue of the standard 2D versions, showing that 3D’s superior  revenue ratio, in the region of x3 on a per-screen basis, has not yet  been  diluted  by  a  relative  increase  in  the  3D  screen  base  (widest  release to date).In addition, My Bloody Valentine 3D screens secured  an  impressive opening weekend ratio of over five times regular 2D  versions, the largest margin of any 3D title to date.

 

High  profile  3D  releases  are  driving  exhibitors  to  upgrade  their  screens. Over  560  new  3D  screens were  added  in  the  first  three  months  of  2009,  leading  up  to  the  release  of Monsters  vs  Aliens  (March  2009)—more  than  the  total  number  of  new  3D  screens  added  in the full year 2008. There are now over 2,000 3D screens  in North America, up from 1,500 at end 2008. There were over 1,000  international 3D screens at end 2008,  led by China  (+160), France,  UK and Russia (+80).

 

The ability to charge a higher price for 3D is attractive to both studios  and  cinema  operators.  Studios  are  looking  to  recover  their  incremental investment in 3D production, which adds 10-25 per cent  over  and  above  the  average  film  budget  from  3D’s  enhanced  box  office. However, there is now a limited window of opportunity of just  three or four weeks to capitalise on 3D revenues, as there is still not  sufficient scope to be able to release several 3D movies at the same  time. Recent  credit market  turmoil  has  limited  deployment  of  the  expensive  underlying  digital  cinema  equipment,  necessary  before  3D—an incremental and optional layer of d-cinema—can be added.