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BRIC Markets Emerge as Cinema Powerhouse

17 March 2013

The BRIC countries of Brazil, India, China and Russia represent a rising powerhouse in the global cinema business, with their combined box-office revenue doubling from 2008 to 2012-and then again by 2017-according to a new IHS Screen Digest Cinema Intelligence report from information and analytics provider IHS.

The BRIC box-office total has expanded dramatically in just five years, rising to $6.2 billion in 2012, up from $3.08 billion in 2008. Growth is mostly being driven by two factors: increasing ticket prices and new screen construction. But other variables are also helping spur the BRIC cinema markets, including the loosening of market regulations in China for 3-D and IMAX films, the popularity of premium films in Russia and the rise of shopping centers in Brazil.

All these factors will continue to expand the BRIC territories' share of the world box office, forecast to reach $11.0 billion in 2016 or 25.2 percent market share of the global cinema business. By 2017, the box-office value of the BRIC regions is projected to hit $12.1 billion-approximately equal to the IHS forecast for the North American box office that same year.

To put the growth of the BRIC region in context, the territories recorded a combined average compound annual growth rate (CAGR) of 14.9 percent at the box office from 2008 to 2012. Such a rate is impressive when compared to other international markets that rose by just 5.5 percent, and is even more remarkable when viewed against the 2.2 percent CAGR of a mature region like North America. The future forecast for the BRIC box office also calls for a CAGR of 14.4 percent through 2017, showing only a minor reduction from the previous period.

Country breakdown

All four of the BRIC markets were in the Top 12 world rankings last year in both cinema admissions and box-office revenue.

China led the way with more than $2.7 billion in 2012, and the country was also the No. 2 world market by size, behind the U.S. India was the next largest market, sixth overall in the world in 2012, while Russia climbed to the ninth position. Brazil, the only country in the Top 12 to not reach the $1 billion plateau, came in at No. 12.

By 2017, both Russia and India will be among the Top 5 box-office markets with a projected $2 billion in revenue, putting them ahead of the U.K. and France. Meanwhile, Brazil is forecast to be ranked No. 10 by 2017, ahead of Mexico and Italy.

Behind the d-cinema curve

At the end of 2012, more than 70 percent of the world's modern screens had been upgraded to digital cinema (d-cinema) technology. However, of the four territories comprising the BRIC region, only China is ahead of this penetration rate with more than 85 percent of screens upgraded in 2012. This higher rate was driven by new screen constructions, with 100 percent of all new screens based on the d-cinema standard. China now has more than 12,400 d-cinema screens in 2,926 sites.

Russia is second among BRIC countries in d-cinema with a total screen penetration reaching 58.3 percent in 2012, below the world average. The rollout in Russia has been driven almost entirely by 3-D, with a large 83 percent of the 2,100 d-cinema screens 3-D-enabled, compared to a global digital to 3-D screen ratio of just 50.8 percent for the full year of 2012.

The other two BRIC countries have a long way to go to reach the world average. Brazil ended 2012 with just 32.1 percent being converted to digital, and India's d-cinema penetration stood at only 10.2 percent. Still, given such low penetration rates, the future growth path of these countries will open up a flood of activity for suppliers in the coming years.

Read More >> Cinema Market Intelligence



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