Harry Potter and Shrek team up to score a fairytale year at box office

Just a few years ago, the rise of the DVD and state-of-the-art television systems were prompting dire warnings about the imminent collapse of the cinema as a popular leisure activity.

Just a few years ago, the rise of the DVD and state-of-the-art television systems were prompting dire warnings about the imminent collapse of the cinema as a popular leisure activity.

Fears about the demise of the big screen experience seem to have been exaggerated, however, with new figures showing that box office takings from British and Irish cinemas reached an all-time last year.

Filmgoers spent nearly £840m on cinema tickets in 2004, up four per cent on the previous year.

Audience figures also soared, with 156.7 million attendances from January to November last year, compared to 148.5 million for the same period in 2003.

Industry analysts say that the huge popularity of hit films such as Shrek 2 , combined with a massive increase in older cinemagoers, has led to the resurgence.

And with a string of highly hyped releases planned for the next 12 months, cinema profits could soon be nudging the £1bn mark.

Figures from market analysts Nielsen EDI show that people in Britain and Ireland spent £838,674 on cinema tickets last year.

The top earning film was Shrek 2 , which grossed £48m, followed by Harry Potter and the Prisoner of Azkaban , which made £46m.

Bridget Jones And The Edge Of Reason was the third highest earning film, followed by The Incredibles and Spider-Man 2 .

David Hancock, a senior film and cinema analyst at Screen Digest said: "Back in the 1980s cinemas were pretty dire. Now cinemas have good screens and good standards of hygiene, so the only variable is the quality of the films.

"In 2004 we've had some very good films, such as Shrek 2 and Harry Potter .

"Two films with such high levels always helps."

The universal appeal of films such as Shrek 2 also led to a bumper summer for British and Irish cinemas.

In June, admissions rose by 57 per cent compared to the previous year, and in July admissions rose by 49 per cent.

Children's films were not the only hits of 2003, with the top 20 hits reflecting the breadth of audiences.

Troy , starring Brad Pitt, came in at number eight, while Mel Gibson's The Passion of Christ , and the Tokyo-set Lost in Translation were also among the year's biggest grossing releases.

Refurbished multiplexes and a wider range of films have also attracted increasing numbers of older customers.

Audience figures for the over 35 age range have risen by 200 per cent in the last five years, making them the fast-rising demographic group of cinemagoers.

Their dominance is highlighted by the fact that for the British film Calendar Girls , 70 per cent of the audiences was over 45.

Chris Hall, research manager at Carlton Screen Advertising, said: "The traditional age of cinema-goers tends to be in the 15 to 34 group, but that is beginning to change now.

"The older age groups tend to have more money and will go to see a wide variety of films, which makes them an attractive group to target."

Mr Hall added: "I don't think the DVD is ever going to really threaten the cinema. If people are passionate about film, they are going to do both.

"You also have children's films like Shrek 2 which have drawn in adults as well, plus the rise in popularity of things you wouldn't have seen at the cinema 10 or 15 years ago, such as documentaries like Fahrenheit 9/11. "

Film buffs are also predicting another bumper year for Britain's cinemas in 2005, with a string of highly anticipated releases and sequels due this year.

They include Star Wars: Episode III in May, a new Batman film starring Christian Bale and the fourth in the Harry Potter series. The most-hyped film of the year is set to be a multi-million pound remake of the 1933 classic King Kong , due for release in December and directed by Peter Jackson.