The National Association of Theater Owners, the trade association of domestic exhibitors, just released its first-ever independent annual report. While it might be light on some specifics, it comes with a surprising statistic: Even with the Covid closures, the number of screens in the U.S./Canada has only dropped five percent since 2019.
NATO also provided, for the first time in three years, its estimate of the average ticket price: $10.53 in 2022, up 15 percent from 2019. This is the first time that the association has updated the ticket price since 2019. (Last October, a NATO spokesperson told IndieWire that changing market conditions made determining a current average price a matter of “apples and oranges.”)
Beyond that, NATO stuck to the consensus talking points in the report, which it produced with The Cinema Foundation, an independent non-profit largely backed by exhibitors. Highlights included the big jump in 2022 box office from the previous year, with the familiar argument that more releases and longer theatrical windows could provide a return to closer to pre-pandemic totals.
Until 2019, NATO worked closely with the MPA in shaping their annual report and held a joint press conference coordinated to Cinemacon. When the MPA became more international in its focus, and focused as much on streaming platforms as well as theatrical, their interests diverged.
The number of screens operating in the U.S./Canada fell from 44,283 in 2019 to 40,263 in 2022. Given the very new few theater openings, that decline doesn’t seem much worse than normal attrition. It speaks well for how exhibitors have coped with challenging circumstances. (Foreign screens grew, with many markets much less saturated than domestic).
It also reinforces the point that while individual circuits (such as Pacific/Arclight) fold, others often fill the gap. Even in difficult times, the best use for a theater screen is showing movies.
The ticket-price increase represents the biggest three-year jump in many years (2019 was eight percent higher than 2016). Factors include the general rate of inflation and a higher percentage of premium tickets sold, as well as fewer children-oriented hits. The $10.53 figure is less than what some studios estimate, but NATO has always been used as the industry standard.
The report also spotlights positive trends with no specific projection. Restoring attendance to 2019 levels would require $13 billion in domestic box office, up from $11.3 billion in 2019. With an expanded release schedule this year, the best-case expectation is around $9 billion.
As a sign of exhibitors’ faith in the future, the report offers that 39 percent of NATO members plan to add premium screens and 54 percent will upgrade sound systems. It cites customer interest in a wider variety of genres, led by comedies. Special mention is made of advance showings of TV programs as well as concerts. The report also claims that adult audiences have returned to pre-pandemic levels.
Particular attention is given to NATO’s recent development of Cinema Days, when prices at all theaters are $3, with 11 dedicated pages in the 58-page report. It argues that the price slash fosters audience growth, but the audience for this emphasis might be the reluctant studios who resist pricing promotions.
The MPA, of course, will have its own take on many of these points in its own report. It will be released later this month.