As those of us in the motion picture business ‘review’ 1995, we can conclude that indeed the film exhibition industry remains healthy. Moreover, attendance has increased over the past several years, a trend that will likely continue into the next millennium.

As I sit here in mid-November preparing this retrospective, the industry looks ahead with enthusiasm to the significant number of anticipated box office hits on the horizon for the holidays.

The holiday season traditionally accounts for approximately 15% of the year’s box office take. This year, however, it is difficult to predict how the ‘picture’ will end, because to date, the storyline has been punctuated with many unexpected twists and turns.

The first quarter of 1995 was one of the weakest in the past eight years. We experienced a box office drought due to the lack of commercially viable film product. Box office admissions heated up during the second quarter, so that it was neck and neck on a year-over-year basis.

Despite summer ’95’s gangbuster opening, the third quarter ultimately declined approximately 5% from the previous year. The weakness was attributable to a greater number of mid-range performers compared to 1994’s megablockbusters Forrest Gump and The Lion King, which each grossed more than $300 million at the domestic box office and were among eight summer flicks to generate over $100 million, as opposed to only five hits during the summer of 1995.

The lifeblood of the exhibition industry is film product. Despite the rising cost of production and advertising, we are continuing to see an increase in the number of films released. A film today has a shelf life not only at the domestic box office, but also internationally, which is expected to dwarf North American box office over the next several years.

Moreover, there are significant ancillary revenue streams from videocassettes, pay-per-view, pay-tv, licensing, etc., which elicit considerable returns to offset a film’s production and marketing costs. Exhibition continues to be the engine that drives the train.

The industry is experiencing demographic changes. The baby boomers are now 40-plus and they have not lost their moviegoing habits. Their attendance has increased from 15% to 36% of all patrons. With the continued graying of the population, this propensity bodes well for exhibition.

This rise in 40-plus attendance is likewise being fueled by the plethora of family product which now inhabits our screens. The return of ‘the family’ is great for exhibitors.

Trends for the future include a rise in the teenage moviegoing audience. While teenagers have comprised a shrinking segment of society over the past decade, from now through to the year 2010 they will grow as a percentage of the general population. This is positive, as teenagers are frequent moviegoers, although it will be several years before we see this trend manifest itself.

1995 saw the beginning of more, modern multiplexes, or in some instances, megaplexes being built.

This is being fueled by the economic reality of real estate with reasonable leases. Developers have acknowledged that a movie theater can indeed be a major traffic draw in the context of a retail development.

All of the above, along with the general well-being of the industry, results in the creation of extraordinary new theater complexes throughout North America.

Movie lovers can now order tickets in advance by phone or make their purchase through an automated ticketing machine at the theater.

Food offerings continue to evolve to cater to the diverse and ever-changing palates of our consumers and in the theater auditorium, guests can sit back in plush seats and enjoy the sensory experience of dts or sdds sound systems.

Looking to the future, you can expect to discover more modern multiplexes across North America. Although in limited number, some exhibitors plan to develop entertainment centers adjacent to their theaters where you can ‘ride the movies’ through motion simulators, or encounter the movies through virtual reality or 3D technology. As this is a relatively costly proposition and has yet to be proven lucrative, family entertainment destinations will not likely emerge in every corner mall.

Despite the roller-coaster cyclicity that we witnessed in 1995, when we analyze movie exhibition over the past several decades, it emerges as one of the most stable businesses, with attendance comfortably over 1.1 billion on an annual basis.

howard lichtman is executive vp of marketing and communications at Cineplex Odeon.