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2004 Year-end Film & Music #s

Posted By Barry Ritholtz On January 6, 2005 @ 7:40 am In Film | Comments Disabled

The year end numbers are now out for both Film and Music sales in the US, and they are rather interesting. Each data point contains both good news and bad for the industry:

Sales of Movie Tickets Were Soft in 2004; Revenue was up while actual number of tickets sold were down.

US CD sales rose by 2.3% in 2004; It was the first rise in four years, but was far below the 8% year over year gains in the first Q of the year.

AP [1] reported:

"U.S. box office receipts soared to a new record in 2004, although the actual number of moviegoers declined for a second year in a row.

Movies took in $9.4 billion in 2004 at the domestic box office, according to tracking firm Exhibitor Relations. Revenue for the year was lagging last year going into the final weeks, but "Meet the Fockers," the sequel from Universal Pictures, propelled gross revenues with total ticket sales of $162.5 million in the last two weeks of the year.

But the record gross was due more to rising ticket prices than attendance.

Factoring in the nationwide average ticket price of $6.22, attendance fell about 1.7% in 2004 to 1.51 billion. Attendance in 2003 was 1.54 billion, down 4.3% from 2002. The average ticket price last year was $6.03.

The highest grossing film of the year was "Shrek 2," which earned $436.5 million.

As to actual CD sales, the BBC reported:

US CD sales rose by 2.3% in 2004 -  the first rise in four years – despite the growing popularity of legal digital music downloads.

The CD format still accounts for 98% of the 666 million albums sold, according to research company Nielsen Soundscan.

A total of 140 million digital tracks were legally downloaded last year, equivalent to 14 million albums . . . By the end of the year, purchased downloads reached a weekly high of 6.7 million tracks, up from 300,000 in mid-2003.

The top 5 selling US CDs were

1. Usher – Confessions
2. Norah Jones – Feels Like Home
3. Eminem – Encore
4. Kenny Chesney – When the Sun Goes Down
5. Gretchen Wilson – Here for the Party

Note that both Usher and Eminem were heavily downloaded on P2P networks.

Quite telling were the results in the Great Britain: "The UK recorded a record year for album sales in 2004, with 237 million sold in the 12 months up to September, an increase of 3%."

Note that the UK population is over 60 million [2] people, while the US has under 300 million people; With a population 20% the size of the United States, the British buy 37% as many CDs as we do. In other words, on a per capita basis, UK consumers buy nearly twice as many CDs as do consumers in the US.

Why is that?   

How is it that they are setting records — despite vibrant broadband penetration, and access to P2P services — while the US remains far below 1999 levels?

I suspect there are three likely causes:

1) A more vibrant, less consolidated broadcast radio music scene;
2) Less mass produced corporate McMusic so prevalent on the radio in the States — from Ashlee Simpson to insipid Boy Bands;
3) A robust economic expansion. The US ’90s bubble was far more muted in the U, so its after effects are also less insidious.

A careful analysis of the P2P phenomenon continues to reveal that the claims of the music industry are greatly exaggerated . . . 


US sees growth in CD sales market    [3]
BBC News, Thursday, 6 January, 2005, 09:56 GMT

Sales of Movie Tickets Slump in 2004 [1]
AP, January 03, 2005  8:06 PM

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/01/2004-year-end-film-music-s/

URLs in this post:

[1] AP: http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20050103-000426-2000

[2] 60 million: http://www.cia.gov/cia/publications/factbook/geos/uk.html

[3] US sees growth in CD sales market   : http://news.bbc.co.uk/2/hi/entertainment/4150747.stm

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