The film industry encompasses the films themselves, movie theaters, TV subscriptions, distribution , and consumption. Box office receipts surpassed $11 billion in 2019, where TV and home video earnings reached $96 billion. Due to the rapid expansion of streaming video on demand, television subscriptions are expected to experience a slight decline in 2020, but its clear streaming revenue will dwarf the theater experience as we move into the new decade.
Most box office numbers are expected to grow as theaters adopt digital screens, increase ticket prices and diversify concession options. Consumer products and brand-related merchandise create great margins for behemoths like Disney, and expect many membership discounts to attract viewership. Traditionally the film industry consisted of multinational umbrella corporations, major studios, and independent studios or “indies.” Today, multi-channel networks engage in the filmed entertainment sector and new platforms are major drivers in the filmed entertainment sector, think Amazon.
Drawing on formidable strengths, the U.S. film industry has a proven ability to produce films that generate hundreds of millions of dollars, including revenues from distribution across strong domestic and international networks. Success in the industry is based on creativity and financing, and the industry is largely self-regulated. The U.S. market has a large talent pool of writers, actors, producers, directors, and technical experts, and is home to a variety of film crews, post-production firms, backdrops, and infrastructure to support production. U.S. filmmakers also receive critical protections for their intellectual property.
Many of the leading motion picture studios are part of larger media conglomerates that often include television, video and streaming services, music services, newspaper, cable and magazine segments. The U.S. filmed entertainment sector enjoyed a trade surplus of $10.3 billion in 2016, which was roughly 4 percent of the total U.S. private sector services trade surplus that year. The numbers are now more visible as we experience the data explosion, and new players enter the fray.
The industry offers attractive possibilities for international companies, both large and small, and provides film production tax incentives. With the shift toward digital production and distribution, foreign firms are continually seeking out U.S. digital and animation expertise and new formats.
As quickly as the industry changes, many old world ways dominate the landscape. The best way to understand the evolution of the film industry is to have a close look at how you spend money on content and entertainment, we have all become our own island of data as options for content expand. One thing we know for sure is that the days of sitting in a movie theater are behind us and streaming revenue will dwarf the box office in the future.