Unlocking emerging markets? Not without a map…

A key constraint on growth of cinema in emerging markets is lack of box office data. IHS Markit’s David Hancock explains that, without data, finding a way ahead is tough


It’s the summer of 1991. Boris Yeltsin has been elected President of Russia, in South Africa apartheid is being dismantled and, in Poland, Lech Walesa is the newly elected president. On the communications front, internet is now available to unrestricted commercial use and the number of computers on it reaches 1m during the year; Microsoft releases MS Dos 5.0; “Terminator 2” rules the North American box office and Disney signs a deal with a small outfit called Pixar ‘to make and distribute at least one computer-generated animation movie’ — “Toy Story”. Amidst these momentous, world-changing events, consider the small… a young research analyst in his first job needs to find out information on a range of large media groups and countries. There’s no internet, a fax is the best there is. He sends out 150 letters to press and communications officers around the globe and waits for annual reports to come back by post. The process takes weeks, a lot of paper and air travel by postal services. Yes, that young researcher was me. 

Moving on 28 years, the same process would take less than a day, using no paper and no air travel. Information is easier to obtain, and there is an abundance as governments, organisations and companies share more and store more. This applies to the film sector as much as any other. Film agencies have become more willing to publish key film and cinema metrics in a consistent and regular way, making markets more transparent to outsiders. This is a process that research firms like mine have helped and encouraged in various ways over the years. The reason we encourage this is not only self-interest so we have more accurate and timely data, but more importantly because it is vital for the industry as a whole to have high-quality and up-to-date information for use by investors, professionals, film agencies and strategic co-ordination bodies. Industry development happens because of a belief in growth, underpinned by good decisions. These can’t be made without understanding the competitive position of a sector at the beginning point. 

There are still a great many countries that do not have a regular and credible data collection system in place for the film industry. In one Eastern European country with a sizeable number of cinema screens, which I will not name, you could find out the number of admissions to the circus in a given year but not the total visits to the cinema. Given the potential for investment in both of these entertainment forms, this seems a skewed sense of data priorities. 

As I allude to above, there is little excuse for ignoring the basic information needed for cinema in an age of elevated access to information. When I hear of countries being talked up as the next big thing in the world of cinema, the first action I take is to see what data is available. If there is very little — and what there is in the public domain is confusing — that country is unlikely to make it to the next level of development in the short to medium term.

The first thing possible investors from inside or outside a country want to see or do is some form of market analysis to gain an understanding of the potential inherent in a country usually compared to others that may well have more information. It is not just imperative to have good data to understand a market, it’s also a measure of the importance authorities place on that industry. Setting up a data infrastructure takes time and money. If it has been done, then it is likely that a high value is placed on the sector. Such information can be leveraged to unlock latent investment, creating economic growth and employment opportunities. At a cultural level, a strong film industry createa stories that reflect a country’s culture and challenges and its social tensions. This has the capacity to change stereotypes and perceptions for the better. Cinemas also provide entertainment, making quality of life better. The cultural area may not be a priority but with growing middle classes and incomes comes a greater desire for paid entertainment.


Outside of South Africa, African nations such as Nigeria (population 196m), Ethiopia (106m), Egypt (99m), Tanzania (59m), Kenya (51m), Uganda (44m), and Algeria (42m) all represent potential returns for producers and distributors if a cinema infrastructure can be put in place — preferably alongside a sustainable local film production sector. Africa has a population of 1.2bn, compared to Europe at 740m and the US at 327m. While it is not realistic to expect similar levels of screen density and cinema-going any time soon as levels of both are currently low in the majority of countries, the potential is clear. Without data collection and reporting structures, this growth will not occur. It’s imperative that authorities in these countries, those representing supra-national interests in these regions, and companies seeking to operate in them, grasp this opportunity to develop modern cinemas by urging the creation of better data and information. I would say this, wouldn’t I? Well, yes, I would. I’ve seen the transformative effects of data and information. Countries may face other challenges, some of which seem (and may be) more pressing, but the film and cinema sector can help solve some and alleviate others. Setting up such an information infrastructure is the best place to start.


There is much focus on untapped markets for cinema, as the industry seeks to grow. The obvious ones, such as Saudi Arabia, are widely discussed, but there are countries in the Middle East, Latin and Central America and South East Asia which are untapped in the truest sense, offering a huge potential for box office. Arguably the most under-developed, in cinema terms, is Africa with over 50 countries, most with under-developed film and cinema infrastructures. IHS Markit tracks around 1,500 modern screens on the continent, of which just under half are in South Africa. Of them all, only a handful of African countries has any cohesive data collection, harmonisation and dissemination provision in the field of cinema. Most will have a central statistical agency, and global bodies such as the World Bank and IMF (and companies such as IHS Markit) can supply demographic and economic data, but most lack a culture ministry or film agency as a co-ordinating body. Political will to create a data infrastructure may, understandably, be missing. The downside of not having any accurate and timely data over a period is that potential investment in that country is unlikely to be forthcoming.


A good example is South Korea, which took a decision to grow its cinema sector in the 1990s. Once the policy had been outlined and growth began, the country found it could only move to the next level of development once it had set up a box office collection system. Initially resisted by both cinema circuits and distributors as it would mean sharing information, the resulting system has laid the foundations for one of the world’s biggest cinema sectors ­­— and Korean cinema companies are now also investing on a global level.

When China began its short and relentless march to being the world’s largest cinema market (by screens) a decade ago, one of the first acts of the government was to establish a ministry responsible for its growth and regulation. Funding policies adopted led to high levels of investment and the rapid growth we have witnessed, but the body also began to collect and release data on the sector for the first time. Admittedly, there have been teething issues with this data — but from a position of zero data, the current situation is a marked improvement.


David Hancock is Research Director, Cinema at IHS Markit and President of the European Digital Cinema Forum.