-By Susan Newman-Baudais & Martin Kanzler, European Audiovisual Observatory

As part of our coverage of Cinema Expo International, FJI focuses on moviegoing trends in Europe, courtesy of the European Audiovisual Observatory.

2009 was a record-breaking year for the European exhibition sector. At the box office, earnings reached a record high, with an estimated European Union gross box-office total of 6.27 billion euros, a hefty 12% rise from the 2008 total. Behind the scenes, the rate of conversions of screens to digital projection showed a dramatic upturn, fueled by an attractive calendar of 3D releases and audience enthusiasm for the new experience. The popularity of 3D also impacted on overall market shares and contributed to increasing concentration on the European market.

EU cinema attendance up, but box office grows faster
Theatrical markets grew in most territories across Europe in 2009. Admissions were up in 24 out of 32 countries, with small drops or stability reported in Croatia, Italy and Portugal and more marked falls in the Czech Republic, Latvia and Turkey. Major theatrical markets which performed particularly well in terms of admissions were Germany (+13.1%), France (+5.7%) and the United Kingdom (+5.6%). Total EU admissions were 981 million, up 6% from 2008 and the best result since 2004. Rising average ticket prices, strongly influenced by premium prices for 3D screenings, multiplied the positive effect on revenues. Gross box-office takings, measured in euros, increased in 24 out of the 29 European countries for which data are available, with notable growth in Austria (+25%), Germany (+23%), the Netherlands (+22%), Romania (+64%) and Sweden (+22%). A number of other Eastern European countries also performed strongly, with Bulgaria, Poland and Slovakia reporting significant gains.

3D injects new life into digital rollout
If cinema-going has over the years proved itself to be a generally recession-proof activity, 2009 saw an added boost in the form of a series of highly anticipated 3D releases. This, coupled with premium ticket pricing for these screenings, injected new life into the digital rollout in Europe and resulted in a record number of digital installations during the year. According to data collected and compiled by MEDIA Salles, there were a total of 4,693 digital screens in wider Europe at the end of 2009, a 207% rise from the previous year (1,529 screens). This represents a market penetration for digital screens of around 13% of the European screen total, up from 4% in 2008. With 904 digital screens installed, France overtook the United Kingdom (668 screens) during 2009 to become the leading European territory with regard to digital equipment.

Exhibition landscapes vary widely across Europe, from the mature Western markets to the fast-growing and sometimes volatile Central and Eastern European ones. A similar variety of pattern can be observed in relation to the digital rollout. Though most of Europe’s digital screens are situated in Western Europe—where the big five countries account for around 60% of total digital installations—Central and Southeastern Europe showed faster overall growth in 2009, with digital screen counts rising by 259% year-on-year, compared to 198% for Western Europe. Starting from very low bases, countries like the Czech Republic, Poland, Russia and Turkey all added significant numbers of digital screens during 2009. Given the concentrated nature of the rollout in these countries, screens added were almost always 3D-capable, so that in many smaller Eastern European and Mediterranean markets, such as Cyprus, Croatia, Malta, Serbia, Slovenia and Slovakia, 3D screens represent almost 100% of the total. This compares to a Europe-wide penetration level for 3D at the end of 2009 of 69% of all digital screens.

2009: The year of the blockbuster
2009 was also a year in which the European cinema landscape was more than ever dominated by blockbusters, with the number of films generating more than five million admissions increasing from 34 in 2008 to 42 in 2009 and signs of increasing concentration around these top titles. For example, the top 100 films by admissions in Europe captured 69% of total admissions in 2008, whereas in 2009 the top 100 earned a market share of 75%.

Three U.S. films produced and released in 3D—Ice Age 3, Up and Avatar—figured among the top five films in Europe in 2009 and all but two of the top 20 places were held by U.S. titles. Harry Potter and the Half-Blood Prince, produced in the United Kingdom with inward U.S. investment, and prize-winning U.K.-produced drama Slumdog Millionaire, in its second year of release, were the only European films to find a place in the chart. Overall results for U.S.-origin titles in the European Union market were slightly better in 2009 than in previous years, with U.S. market share of admissions estimated at 67%, up just over one percentage point from 2008 and the highest total since 2003. The improved performance of U.S. titles was almost entirely at the expense of European films, whose provisional market share fell back slightly to just under 27%, down from 28% in 2008.

2008 had been a year in which many European countries registered exceptional market shares for domestic titles, but the phenomenon did not carry over into 2009, with 23 out of 29 European countries for which data is available registering a drop in admissions to local films. Nonetheless, there were some noteworthy national results, with Germany and Sweden standing out. Popular successes Wickie und die starken Männer and Zweiohrküken, together with historical drama Die Päpstin, propelled national film market share in Germany to record heights (27%); in Sweden, the Millennium trilogy of thrillers boosted admissions to domestic films by 81% year-on-year, contributing to the highest national market share on record (33%). 2009 was also a good year for Spanish films, with historical drama Agora and animated feature Planet 51 among the titles responsible for a 22% rise in admissions to locally produced works.

Outlook 2010
Behind the records in 2009 lay a number of other concerns for the exhibition sector, some of which will no doubt fuel debates during 2010. Among these is the coordination of the digital rollout in Europe, a topic once more in the spotlight due to the rapid increase in the rate of conversion during the second half of 2009 and early 2010. While for most larger exhibitors across the continent, conversion is either underway or foreseen using their own finance, VPF models or private buying groups, for Europe’s large number of small operators, in particular single-screen and municipally run theatres, the situation remains less than clear, despite initiatives by public authorities in many, but not all, European countries. Without such intervention, many fear that Europe’s screen landscape will undergo significant alterations in the years to come.

FJI thanks the European Audiovisual Observatory for their insights. Learn more about the European market at www.obs.coe.int.