At Forbes magazine, editors used to tell reporters: There’s nothing more powerful than two crossing lines. They meant trend lines on a graph, as when rising expenses exceed falling revenue, sending a business into loss.
In the 2016 Theatrical Market Statistics report released last week by the MPAA, just such crossing lines, on Page 21, point toward what might be digital disruption of the film ratings system. That system, called the Classification and Rating Administration, is overseen by the MPAA and the National Association of Theatre Owners, whose members are among those conferring at CinemaCon in Las Vegas this week.
Historically, far more films received ratings from CARA than actually were released. In 2007, for instance, 840 films were rated, but only 611 were released in theaters. Presumably, the rest went to video, sat on the shelf or were held for a later year. In any case, film ratings peaked the next year at 897, then began dropping, to a contemporary low of 605 in 2016. But meanwhile, the number of theatrical releases increased, from that base of 611 to a recent peak of 718 last year.
By the MPAA’s count, the two lines crossed in 2014, when 708 films were rated and 709 released. In the next two years, the gap rapidly widened, so that releases outstripped ratings by fully 113 films last year.
That could mean that a growing number of movies are entering the marketplace with no rating. If so, those almost certainly would be independently distributed movies that are visiting a small number of theaters before moving to digital platforms. More, since the ratings statistics include many films that are set only for home entertainment release, the fact that ratings have fallen far below theatrical releases is particularly striking.
The major studios still are sending virtually everything through the ratings system; in fact, the top-grossing 140 movies — all rated and most from big studios — accounted for over 95% of the theatrical box office last year, the MPAA said.
Yet the gap between ratings and releases has become very wide for companies that use the ratings system but do not belong to the MPAA. Among those, 579 films were released last year, but only 429 were rated — a deficit of 150.
In truth, ratings statistics are a slippery business, as the annual counts only include ratings that are accepted as final by the film’s owner, rather than as a basis for appeal, editing or provisional advice pending the addition of effects. Last year, according to people briefed on the CARA ratings process, an unusually large number of films received ratings that have not yet been accepted — and many of those eventually might be added to the count when the movies are finished or set with a distributor. (Cost likely is not a factor in the ratings decline; the minimum cost for having a film rated is only about $2,500 and has not changed much through the years.)
So the crossed lines might creep toward each other again, if the past two years proved to be aberrational.
Otherwise, the ratings system — like the rest of the film business — might be experiencing a serious digital jolt. Indeed, if the past decade’s trends were to continue through 2025, ratings would be assigned annually to only about half as many films as the number released, and the digital marketplace almost certainly would be flooded with unrated films.