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Filmed entertainment

Executive summary

The film industry was one of the hardest hit by COVID-19, with local large-scale production all but stopping, and cinemas closed for extended periods at the height of the pandemic, drastically reducing year-on-year box office and advertising revenues.

Forecasts at a glance

Box Office Spend (A$ millions)

CAGR 2019-2024 based on gradual recovery trajectory

Box Office Spend -4.23%


Cinema Advertising (A$ millions)

*2015 - 2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Cinema Advertising      0.02%

Physical Sell Through Market (A$ millions)

CAGR 2019-2024 based on gradual recovery trajectory

Physical Sell Through -13.22%

Transactional VOD Market (A$ millions)

CAGR 2019-2024 based on gradual recovery trajectory

Transactional VOD  6.71%

Total Filmed Entertainment Market (A$ millions)

*2015 - 2018 figures have been updated to reflect recently available market information

CAGR 2019-2024 based on gradual recovery trajectory

Total  -3.24%

Global blockbusters dominated box office pre-COVID-19.

In 2019 Disney’s Avengers: Endgame was the number one film in Australia, grossing US$59m, but there was only one Australian title in the top-30 films of the year - Ride Like A Girl, the biopic of the first female jockey to win the Melbourne Cup. Underlining the appetite for studio blockbusters, two titles released in 2019, Avengers and The Lion King are already ranked number three and four in the all-time Australian box office lists.

COVID-19 all but shut the industry for months, as production halted and new releases appeared on over the top (OTT) platforms.

Total cinema revenue (including box office and advertising) contracted sharply in 2020 with the outbreak of COVID-19, and there has been a severe flow on effect for the Australian film industry.

In the forecast period, box office revenue was A$1.229b in 2019 and is set to fall to A$994m by 2024. While it is believed consumers will still want to see the blockbusters on a big screen, the experimental release of recent titles direct to streaming platforms - such as Mulan and Pixar’s Onward on Disney+ - demonstrate the additional pressure felt by the industry as consumer habits evolve and distribution methods change.

Local titles had 3.3 percent share of Australian box office revenue in 2019: 59 Australian titles competed with 694 foreign films for screens.1 It is worth noting that there is a concerted effort - both from a budget and investment perspective - to increase the number of Australian productions in development to ensure that Australian stories and productions remain a feature of the local film sector.

Cinema groups continue to evolve their offerings to create superior customer experiences, as the competition for consumers’ time spent with video content heats up.

Compared to other developed markets, cinema ticket prices remain relatively high in Australia, and the pricing strategy post-COVID-19 - along with health and safety measures - will have an impact on how quickly people return to cinemas given their increased use of at-home services in the period.

Additional cinemas were planned to be built and the total number of screens is set for a modest rise from 2,332 in 2019 to 2,360 in 2024, representing a 0.2 percent CAGR. It remains to be seen if the COVID-19 crisis has delayed or modified the plans of the major cinema groups. Cinema groups continue to evolve their model to create superior customer experiences beyond the now entrenched ‘gold class’ premium services with enhanced seating, sound and food and beverage services that make for a much more tailored and premium experience.

The cinema and film industry is expected to fight their way back from crisis with government support and industry ingenuity.

One upside of the COVID-19 crisis has been the identification of Australia as a 'safe' place for productions to be filmed, given the relatively low infection rates, and the ability for states to create production ‘bubbles’ that keep crew and cast in safe locations. The accessibility and appeal of regional film locations and services has also gained momentum since the crisis, with new film production facilities being explored in locations such as in the Ballina/Byron Bay region through a combination of government, private and local funding.

Attracting international productions to Australia has been further enhanced through the Australian Government's $400m increase to the Location Incentive Scheme to attract foreign film and television productions to Australia over the next seven years.When coupled with the COVID-Support Fund from Screen Australia, and a further $50m available through the Government-funded Temporary Interruption Fund, the Australian film industry is set to fight back with the return to production as quickly as circumstances allow.

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