September 3, 2008

Smaller Audiences, Bigger Payout Higher Ticket Prices and ‘Batman’ Lifted Hollywood Income

By Brooks Barnes

Fewer people went to the movies in the United States this summer than last, confirming Hollywood's fears that this year's slate of pictures would not match the crowd pleasers of 2007.

But luckily for an industry that cares mostly about the money, higher ticket prices and a "Batman" sequel delivered near-record revenue to the major Hollywood studios.

For the crucial summer season, from the first weekend in May to the Labor Day holiday in early September, when studios record about 40 percent of their annual box office revenue, domestic ticket sales totaled an estimated $4.2 billion, according to movie tracking firms.

Despite attendance falling 4 percent (to 586.6 million moviegoers), according to Media by Numbers, that performance still surpassed the $4.18 billion in revenue last year. Factoring in inflation, the summer of 2002 still holds the industry record with $4.63 billion.

Studios in 2007 served up an unprecedented number of sequels and comic book-derived movies, both thought to be easy sells. The crop this year had fewer such films, and the big-budget pictures that studios did deliver came with sizable risks.

They consisted of B-list, or drunken, superheroes ("Iron Man" and "Hancock"), a TV show years distant from original episodes ("Sex and the City") and an animated film with a 45-minute silent stretch ("Wall-E.")

There was also comedy gridlock with Ben Stiller, Mike Myers, Adam Sandler, Will Ferrell, Eddie Murphy, Steve Carell, Seth Rogen and Cameron Diaz all headlining different films.

Yet nearly all of those movies landed on their feet, providing financial peace of mind for all of the big studios, except 20th Century Fox.

"You're always trying to put together new franchises, and this summer the industry was able to do just that," said Brad Grey, the chairman of Paramount Pictures.

"Iron Man," a Marvel Studios film that was distributed by Paramount, is perhaps the strongest contender to become a megawatt franchise. The picture, starring Robert Downey Jr., has sold $317.5 million in tickets at North American theaters and more than $250 million overseas. The studios have already locked in April 30, 2010, for the sequel.

Other summer entries that performed well enough to spawn sequels include Universal's "Wanted," about superhero assassins, and the DreamWorks Animation film "Kung Fu Panda."

Reading the box-office tea leaves for clues about consumer tastes or Hollywood currents is akin to pontificating about symbolism in works of fiction: any halfway plausible argument works. Indeed, veteran movie executives caution about reading too much into the success of any one film.

"Sex and the City," for instance, surprised Warner Brothers with a strong domestic take of $152.4 million, but does that mean Hollywood will start cranking out more female-oriented films?

Probably not. One test comes on Sept. 12, when "The Women," the long-gestating remake of George Cukor's 1939 classic, reaches theaters.

Even so, clear winners and losers emerged over the summer, with some strategies paying off and some Hollywood truisms receiving fresh corroboration.

The movie business, for instance, remains highly volatile. The industry had huge flops and huge hits - sometimes at the same studio.

Warner, part of Time Warner, was whipsawed between the crash of "Speed Racer" and the surprising success of "The Dark Knight," a follow-up to "Batman Begins" in 2005.

"Speed Racer," a remake of the old television series, cost an estimated $250 million to produce and market but took in just $43.9 million at the domestic box office.

Then "The Dark Knight" came along and cruised to a $504.7 million tally, enough to make it one of the biggest-selling movies of all time. (Warner also had the No. 1 comedy of the summer in "Get Smart.")

Paramount, part of Viacom, reaped huge profits by playing it safe: Most of its summer entries were financed by other production companies with Paramount acting as the distribution partner.

The strategy allowed Paramount to limit its risk while focusing on big-budget bets for next summer, including "G.I. Joe," a reboot of "Star Trek" and "Transformers 2" (the latter is a co-production of Paramount and DreamWorks).

The studio did suffer one of the biggest flops of the summer, however. "The Love Guru," starring Mike Myers, sold $32.2 million in tickets - less than half of its cost.

"I think that Mike is hilarious and deserves the chance to continue making pictures he believes in," said Grey. "Not every movie is going to hit every time."

Universal's summer was robust, with "The Incredible Hulk" financed by Marvel overcoming bad buzz to become a legitimate hit, and with the musical "Mamma Mia" printing money, especially overseas.

In addition to "Wanted," the studio also squeezed a hit out of "Hellboy II: The Golden Army," notable because Sony had passed on making a sequel.

"The industry had a great summer because most studios made really satisfying and compelling movies," said Adam Fogelson, Universal's president for marketing and distribution.

Other movie companies had a harder time.

Sony hatched hits with "Hancock," a Will Smith entry that sold $226.5 million in tickets at the domestic box office, and three modestly budgeted comedies, including Sandler's "You Don't Mess With the Zohan."

"Comedies, even R-rated ones, continue to perform very well," said Rory Bruer, the president for distribution at Sony. "People want to laugh and escape."

Still, Sony suffered from comparisons with last summer, when it had juggernauts like "Spider-Man 3." The same was true for Walt Disney, which enjoyed a record summer last year because of the final "Pirates of the Caribbean" installment.

This time around, Disney had "The Chronicles of Narnia: Prince Caspian," a substantial disappointment because its box office total of $141.6 million was less than half that generated by the first movie in the series.

Fox, part of News Corp., struggled outright, having its longest losing streak in nearly a decade. The cost-conscious studio, long praised by analysts for its healthy profit margins, stumbled with "X- Files: I Want to Believe" and the disastrous "Meet Dave," an Eddie Murphy vehicle.

A Fox spokesman said some potential blockbusters in coming months should end the drought. Among Fox's coming films are "The Day the Earth Stood Still," a remake of the science fiction classic, and "X- Men Origins: Wolverine."

One question about next summer involves the potential impact of the industry's recent three-month writers' strike. Warner recently said that the strike had affected its summer 2009 pipeline to such a degree that it was shifting the release of "Harry Potter and the Half-Blood Prince" from November of this year to July.

But the other five major studios said there would be no slowdown in their release schedule.

"There is very little evidence there will be a thinning out of the marketplace anytime before next fall," Fogelson of Universal said.

The 2008 summer season ended with a whimper this past long weekend, as Hollywood dropped a smattering of weak movies into theaters and executives turned their attention to the start of the awards season.

The Vin Diesel action picture "Babylon A.D." sold an estimated $12 million in tickets from Friday to Monday in North America, landing in second place, behind the holdover "Tropic Thunder," which made $14.3 million ($86.6 million total).

"Traitor," a thriller starring Don Cheadle, sold about $11.5 million and came in third for the long weekend.

"The Dark Knight" was fourth. "The House Bunny," a low-budget comedy from Sony, rounded out the top five with $10.2 million ($29.8 million total.)

Originally published by The New York Times Media Group.

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