2006 U.S.

Theatrical Market Statistics

Worldwide Market Research & Analysis

2006 U.S. Theatrical Market Statistics

2006 Motion Picture Industry Highlights

The following document provides context and empirical data with respect to box office in 2006.

Box Office In 2006, there was a 5.5% increase in total domestic box office, bringing the total box office to $9.49 billion. Global box office reached an all-time high with $25.82 billion in 2006, compared to $23.27 billion in 2005, an 11% increase. U.S. theater admissions grew 3.3% to 1.45 billion tickets, ending a 3-year downward trend. Costs Average theatrical costs remained fairly flat in 2006 at $100.3 million a drop in marketing costs offset an increase in negative costs. Advertising expenditures on the Internet jumped up to 3.7% for MPAA member companies.

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2006 U.S. Theatrical Market Statistics

2006 Motion Picture Industry Highlights

The Movies The number of movies released has been steadily growing, with total releases topping another alltime high of 607 versus 549 in 2005, a growth of 11%. Consistent with past years, PG-13 films comprised the majority of top grossers for the industry, with PG and PG-13 films accounting for 85% of 2006s top 20 films. Who is Going Research conducted in the summer of 2006 found that people went to movies in the theater more frequently over the prior 12 months than in 2005. Likewise, the proportion of people who never go to the movies dropped in 2006. African-Americans have the highest admissions per moviegoer with 9.0 movies per year. Satisfaction Research conducted by Nielsen Entertainment/NRG in January 2007 found that an overwhelming 80% of moviegoers who saw at least one movie in 2006 believed the experience was one of time and money well spent, versus the 16% who preferred watching on DVD and the 4% who preferred they had not seen the movie at the theater. Nearly half of these moviegoers plan to buy the last movie they saw, with exactly half of them making this decision immediately after seeing the movie.

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2006 U.S. Theatrical Market Statistics

U.S. Box Office has rebounded

After a dip in 2005, the U.S. box office has climbed up 5.5% to $9.49 billion.

U.S. Box Office (Billions)

$9.52 $8.41 $7.66 $9.49 $9.54 $8.99 $9.49

2000
Source: MPAA

2001

2002

2003
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2004

2005

2006

2006 U.S. Theatrical Market Statistics

Worldwide Box Office reaches historic high

Worldwide box office also rebounded in 2006 and reached an all-time high of $25.82 billion an 11% increase from the previous year. Worldwide Box Office (Billions)

$25.19 $19.77 $16.96 $20.39

$25.82 $23.27

2001
Source: MPAA

2002

2003

2004
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2005

2006

Note: Worldwide box office includes the United States.

2006 U.S. Theatrical Market Statistics

U.S. Admissions
Theater admissions grew 3.3% in the U.S. in 2006, ending a 3-year decline.

U.S. Admissions (Billions)

1.64 1.57 1.49 1.42 1.40 1.54 1.45

2000
Source: MPAA

2001

2002

2003
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2004

2005

2006

Admissions per Capita

2006 U.S. Theatrical Market Statistics

Admissions per capita remained fairly flat with a 0.2% increase.

Admissions per Capita

4.5

4.4

4.8

4.8

5.2

5.3

5.7

5.4

5.2

4.7

4.8

1980
Source: MPAA

1985 1990

1995 2000

2001

2002 2003

2004 2005

2006

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2006 U.S. Theatrical Market Statistics

Industry Comparisons Entertainment Options

Movies drew more people than either theme parks or the major professional league sports combined. 2006: Admissions/Attendance Comparison (Millions)
1,448.5

NHL 21.0 NFL 17.4 NBA 22.0

341.0 136.9
Movies Theme Parks Sports
MLB 76.5

Sports

Source: MPAA, PricewaterhouseCoopers

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2006 U.S. Theatrical Market Statistics

U.S. Box Office

There were 12.5% more films that grossed more than $50 million at the box office in 2006 1 film even grossed more than $400 million. Further, the number of movies that made $50 to $200 million grew 19% in 2006. Number of Films Breaking Benchmarks

Box Office Range

$400 Million & Over $200 to $399 Million $100 to $199 Million $50 to $99 Million TOTAL

Year of Release 2006 2005

1 5 12 45 63 0 8 12 36 56

% Change 2006 v. 2005

100.0% -37.5% 0.0% 25.0% 12.5%

Source: Nielsen EDI

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2006 U.S. Theatrical Market Statistics

Films Released in the U.S.

The total films released in 2006 increased by 11% from 2005 driven by new film releases, which grew 12%. Number of Films Released
471 420 51 1996 2002 466 449 17 473 459 14 482 474 8 2005 549 535 14 2006 607 599 8

2003 2004 Total New Releases Reissued

Feature Films Released in the U.S. Year 2006 2005 2004 2003 2002
Source: MPAA

MPAA Total 203 34% 190 36% 199 42% 194 42% 220 49%

% of

New Releases Reissues All Other % of Total New All Other Total New MPAA Distributors Total Releases Distributors Reissues 66% 396 599 1 7 8 64% 345 535 4 10 14 58% 275 474 1 7 8 58% 265 459 4 10 14 51% 229 449 5 12 17

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2006 U.S. Theatrical Market Statistics

Top Films & Ratings

In 2006, 13 of the top 20 grossing films were rated PG-13. PG and PG-13 films account for 85% of 2006s top 20 films.
2006 TOP GROSSING FILMS
Rank Title
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Pirates of the Caribbean: Dead Man's Chest Cars X-Men: The Last Stand Night at the Museum The Da Vinci Code Superman Returns Ice Age: The Meltdown Happy Feet Casino Royale Over the Hedge The Pursuit of Happyness Talladega Nights: The Ballad of Ricky Bobby Click Mission: Impossible 3 Borat The Departed The Devil Wears Prada The Break-Up Scary Movie 4 Dreamgirls

Distributor
Buena Vista Buena Vista Fox Fox Sony Warner Bros. Fox Warner Bros. Sony Paramount Sony Sony Sony Paramount Fox Warner Bros. Fox Universal TWC Paramount

Box Office Rating (Millions)

$423.3 $244.1 $234.4 $218.6 $217.5 $200.1 $195.3 $192.1 $165.5 $155.0 $154.3 $148.2 $137.4 $134.0 $127.9 $126.3 $124.7 $118.8 $90.7 $88.7 PG-13 G PG-13 PG-13 PG PG-13 PG PG PG-13 PG PG-13 PG-13 PG-13 PG-13 R R PG-13 PG-13 PG-13 PG-13

2006 Top 20 Films by Rating

R 10% PG-13 65%
2

G 5%
1

PG 20%

13 films

Year
2006 2005 2004 2003 2002

Top 20 Grossing G PG PG-13

5% 5% 5% 5% 5% 20% 25% 25% 15% 30% 65% 60% 55% 60% 65%

R
10% 10% 15% 20% 0%

Includes box office data as of February 2007

Source: MPAA, Nielsen EDI

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2006 U.S. Theatrical Market Statistics

MPAA Member Companies Average Theatrical Costs

Since 2003, average theatrical costs of MPAA member companies were down 5.5% overall. From 2005 to 2006, negative costs were up 3.4% and marketing costs decreased by 4.4%. In absolute numbers, average negative and marketing costs hit their peak in 2003.
$105.8 $100.5

$99.7

$100.3

$78.2

$39.5

$34.8

$36.1

$34.5

$30.4
Millions

Marketing Costs Negative Costs

$66.3 $47.8

$65.7

$63.6

$65.8

2002
Source: MPAA

2003

2004

2005

2006

Note: MGM data is no longer collected historical figures have been adjusted to reflect this omission.

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2006 U.S. Theatrical Market Statistics

MPAA Member Subsidiary/Affiliate* Average Theatrical Costs

Average theatrical costs for member subsidiaries grew 22.7%. Negative costs were up 28.9% while marketing costs were up 13.2%.

$62.0

$45.4

$15.1
$40.4 $38.7

$48.5

$11.4 $11.4
Millions

$17.8

$15.2 $30.7

Marketing Costs Negative Costs

$46.9 $34.0 $29.0 $23.5

2002
Source: MPAA

2003

2004

2005

2006

* Subsidiaries include studio classics and specialty divisions such as Fox Searchlight, Miramax, New Line, Sony Pictures Classics, etc.

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2006 U.S. Theatrical Market Statistics

MPAA Member Company Distribution of Advertising Costs by Media

The distribution of advertising expenditures among member companies on the Internet grew to 3.7% from 2005 to 2006.
% of Total Network Internet/ Other Other Newspaper Spot TV Trailers TV Online Media Non-Media
10.8% 12.7% 12.9% 14.0% 13.6% 21.2% 23.1% 23.0% 23.0% 22.8% 13.9% 12.8% 13.2% 15.6% 17.5% 3.7% 2.6% 2.4% 1.4% 0.9% 4.3% 4.4% 7.6% 4.5% 4.6%
Spot TV 14% Network TV 21% Newspaper 11%

Year
2006 2005 2004 2003 2002

Avg $
(Millions)

$30.71 $32.35 $30.96 $34.34 $27.13

24.4% 22.4% 22.2% 21.9% 21.7%

21.6% 22.0% 18.9% 19.5% 18.8%

Other Media includes: Cable TV Radio Other Non-Media includes: Magazines Production/Creative Services Billboards Exhibitor Services Promotion & Publicity Market Research
Source: MPAA

Internet/ Online Trailers 4% 4%

Other Media 24%

Other NonMedia 22% Note: MGM data is no longer collected historical figures have been adjusted to reflect this omission.

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Frequency of Moviegoing

2006 U.S. Theatrical Market Statistics

Moviegoers went to the movies more frequently in 2006 the % of people who never or infrequently attend movies fell. Frequency of Moviegoing 2002-2006
35% 28% 26% 11% 36% 27% 25% 11% 35% 28% 24% 13% 34% 29% 34% 28% 26%

40% 35% 30% 25% 20% 15% 10% 5%

24% 13%

11%

2002

2003

2004

2005

2006

Frequent
Frequent = at least once per month (12x/year) Occasional = at least once in six months (2-11x/year) Infrequent = less than once in six months

Occasional

Infrequent

Never
Source: MPAA

Yearly totals represent data from mid-July to mid-July of the following year not calendar years

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Ethnicity

2006 U.S. Theatrical Market Statistics

While each ethnic group experienced some change in 2006, the total public average admissions per moviegoer stayed static at 7.6 movies per person per year. Admissions per Moviegoer by Ethnicity

9.0 7.8 7.3

9.8 8.8 8.0 7.0 7.1 7.6 7.6

2006

2006

2005

2005

2006

2005

2005

2005

AfricanAmerican
Source: MPAA

Other

Hispanic

Caucasian

2006

Total Public

Note: Survey is conducted only in English Yearly totals represent data from mid-July to mid-July of the following year not calendar years

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2006

2006 U.S. Theatrical Market Statistics

When they choose to go, Moviegoers like the Experience

The vast majority of moviegoers say their overall theater experience is time and money well spent. Satisfaction with theater experience at last movie

Source: Nielsen Entertainment/NRG

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2006 U.S. Theatrical Market Statistics

The Movie-Watching Experience

About two-thirds of respondents still feel that the theater offers the ultimate moviewatching experience. Of the segments, younger males are the most likely to prefer the theater experience.

What is the ultimate movie-watching experience?

Home 37% Home 22% Home 37% Home 31% Home 45%

Theater 63%

Theater 78%

Theater 63%

Theater 69%

Theater 55%

TOTAL
Source: Nielsen Entertainment/NRG

M<25

M 25+

F<25

F 25+

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2006 U.S. Theatrical Market Statistics

The High-Tech Household

Those moviegoers who own or subscribe to four or more home technologies were actually more avid moviegoers, seeing an average of three more movies per year than the moviegoer who owned or subscribed to fewer than four.
MOVIEGOERS WHO OWN OR SUBSCRIBE TO 4+ TECHNOLOGIES (22%) Avg. Movies/Yr = 10.5 MOVIEGOERS WHO OWN OR SUBSCRIBE TO <4 TECHNOLOGIES (78%) Avg. Movies/Yr = 7.1

Source: Nielsen Entertainment/NRG

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Appendix
Worldwide Market Research & Analysis

2006 U.S. Theatrical Market Statistics

Box Office
Year
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986

Box Office Gross (Billions)

$9,487.8 8,991.2 9,539.2 9,488.5 9,519.6 8,412.5 7,660.7 7,448.0 6,949.0 6,365.9 5,911.5 5,493.5 5,396.2 5,154.2 4,871.0 4,803.2 5,021.8 5,033.4 4,458.4 4,252.9 3,778.0

% Change vs. Prev. Period 2006

5.5% -5.7 0.5 -0.3 13.2 9.8 2.9 7.2 9.2 7.7 7.6 1.8 4.7 5.8 1.4 -4.4 -0.2 12.9 4.8 12.6 0.8 5.5% -0.5 0.0 -0.3 12.8 23.9 27.4 36.5 49.0 60.5 72.7 75.8 84.1 94.8 97.5 88.9 88.5 112.8 123.1 151.1

Source: MPAA

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2006 U.S. Theatrical Market Statistics

Admissions
Year
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986

Admissions (Millions)
1,448.5 1,402.7 1,536.1 1,574.0 1,639.3 1,487.3 1,420.8 1,465.2 1,480.7 1,387.7 1,338.6 1,262.6 1,291.7 1,244.0 1,173.2 1,140.6 1,188.6 1,262.8 1,084.8 1,088.5 1,017.2

% Change vs. Prev. Period 2006

3.3% -8.7 -2.4 -4.0 10.2 4.7 -3.0 -1.0 6.7 3.7 6.0 -2.3 3.8 6.0 2.9 -4.0 -5.9 16.4 -0.3 7.0 -3.7 3.3% -5.7 -8.0 -11.6 -2.6 1.9 -1.1 -2.2 4.4 8.2 14.7 12.1 16.4 23.5 27.0 21.9 14.7 33.5 33.1 42.4

Source: MPAA

Note: 1989 to present based on NATO average ticket price

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2006 U.S. Theatrical Market Statistics

Average Annual Admission Price

Year 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996

Avg. Annual Admission Price (USD) $6.55 6.41 6.21 6.03 5.81 5.66 5.39 5.08 4.69 4.59 4.42

% Change Prev. Period 2006 vs. 2.2% 3.2 2.2% 3.0 5.5 3.8 8.7 2.7 12.7 4.9 15.8 6.1 21.5 8.3 28.9 2.3 39.6 3.9 42.8 -48.3

% Change CPI 3.2% 3.4 3.3 1.9 2.4 1.6 3.4 2.7 1.6 1.7 3.3

Note: NATO average ticket price based on a survey by Goodman & Company and reflects average price paid for all admissions to movie theaters, inclusive of first run, subsequent runs, senior citizens, children, and all special pricing.

Source: MPAA, Bureau of Labor Statistics

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2006 U.S. Theatrical Market Statistics

Industry Comparisons Entertainment Options

Going to the movies remains an affordable outing for most families with admission prices significantly lower than alternative entertainment options. 2006: Average National Ticket Price Comparison
2006 2005* Admission Cost for Admission Cost for % Change Price Family of Price Family of 2006 vs. (1 Ticket) Four (1 Ticket) Four 2005 $61.60 $246.40 $58.95 $235.80 4% $46.00 $184.00 $45.28 $181.12 2% $41.20 $164.80 $44.55 $178.20 -8% $34.21 $136.84 $33.57 $134.28 2% $22.40 $89.60 $21.17 $84.68 6% $6.55 $26.20 $6.41 $25.64 2%

Event
Football Game Basketball Game Hockey Game Theme Park Baseball Game Movie

Source: MPAA, PricewaterhouseCoopers

* 2005 data updated by source; 2004 data used for NHL due to cancellation of 04-05 season.

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