This morning Statistics Canada released interesting data on the Canadian movie distribution business. The data confirms what is likely obvious to most people: the industry has never done better despite the fact that movie attendance is experiencing a sharp decline. The reason of course is the emergence of the DVD and home theatre market. People are still watching movies, but they’re doing so from the comfort of their own homes.
The data makes for a very interesting case study in how technology is changing longstanding habits. Using data from 2003/4, the industry increased its revenues by nearly five percent and its profit margins by 22 percent. Meanwhile, earnings from movie theatres declined by more than 17 percent. The savior is the DVD market, which did not even exist four years earlier. During this data period, pre-recorded movies accounted for 53 percent of total revenue, with DVDs constituting more than three-quarters of that revenue.
As an aside, the data also illustrates the impact of Canadian content requirements. Canadian content films did better in 2003/4, due largely to some successes in Quebec. As an overall percentage, however, they still only garnered 4 percent of theatre revenue and 2.4 percent of DVD revenue. Where Canadian content is mandated by regulation, namely on conventional and pay television, the numbers are dramatically different. Canadian content revenues grab 24 percent of pay television revenues and 17 percent of conventional television revenues.