Equity Research L O S ANGELES | S A N FRANCISCO | NEW Y O R K | B O S T O N | C H IC A GO | MINNEAPOLIS | MILWAUKEE | SEATTLE Movies and Entertainment January 9, 2017 Michael Pachter Alicia Reese Nick McKay (213) 688-4474 (212) 938-9927 (213) 688-4343
[email protected] [email protected] [email protected] Biweekly Review -- A Look Ahead from Early January and Our Take on Current Events in Film Exhibition and Video-On-Demand • Q4 box office ended down 3.5% year-over-year to $2.81 billion, while the year ended up 2.2% to $11.4 billion – the second consecutive domestic box office record. October was down 8.1% ($657 million), with the top five films grossing over $50 million each and collectively grossing $306 million during the month. October faced a difficult comparison from The Martian and Hotel Transylvania last year, which, along with number three Goosebumps , totaled $331 million for the month. November was up 7.6% ($959 million), with Doctor Strange, Fantastic Beasts, and Trolls leading the box office and all surpassing $100 million each. December was down 8.8% ($1.2 billion), with Rogue One: A Star Wars Story generating $408 million, compared to December 2015 when The Force Awakens earned $652 million. We expect solid box office growth in 2017, but expect a challenging start to the year given difficult comps in the first quarter. • Premium ticket comparisons were difficult in Q4 and we expect difficult comparisons to a lesser extent in Q1. In Figure 2 on page 3, we compare the top ten films in each quarter to the prior year’s quarter, denoting which was or will be available in IMAX or IMAX 3D.