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this sums up my worries..... 11 May 2005 12:23 #10512

  • leeler
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http://money.cnn.com/2005/05/10/news/fortune500/summer_movies/index.htm?cnn=yes

NEW YORK (CNN/Money) - There are all kinds of possible explanations for why the first weekend of the summer box office was so depressing.

Maybe Orlando Bloom, the young heartthrob who starred in "Kingdom of Heaven," released on Friday, and Paris Hilton, the wealthy hotel-heiress-turned-gossip-generating-minx featured in "House of Wax," aren't ready for the big time.

Maybe the Idaho residents who got a light snowfall over the weekend didn't realize that summer had started and it was time to beeline to the movies.

Perhaps audiences are even more fickle given rising ticket prices and the knowledge that any movie out today will likely be available on home video before summer's end.

Or maybe, it's a combination of all three: uninspiring movies, a shockingly early start to the season, and finicky fans.

"What sells nowadays is excitement," said Gitesh Pandya, a movie industry analyst with BoxOfficeGuru.com. "A pretty good movie isn't good enough anymore." To hit at the box office, "a movie has got to be spectacular," he said.

This weekend's opening receipts sank a startling 22 percent from last year, according to industry tracker Exhibitor Relations. Analysts had expected year-over-year numbers to be down, given that 2004 had a stronger inaugural weekend lineup, but not this far down.

It's early yet to declare a box office crisis.

Analysts say that either one of the summer's two anticipated blockbusters, "Star Wars Episode III: Revenge of the Sith" from Lucasfilm Ltd. and "Madagascar" from DreamWorks Animation (Research), could turn mass stupor into a box office stampede. Both films debut later this month, with "Star Wars" up first on May 19. (For more on "Star Wars," click here.)

Still, while no one knows how the summer box office will fare, there are reasons for Hollywood to worry.

The box office has slumped for 11 consecutive weeks, with year-to-date ticket sales down 5.4 percent from last year even as ticket prices rose a moderate 3 percent, to around $6.40 on average, according to Exhibitor Relations. Theater attendance has tumbled about 8 percent.

"This was the worst weekend of the year at the box office and the slowest start to summer we've seen in years," said Paul Dergarabedian, president of Los Angeles-based Exhibitor Relations, who estimates summer ticket sales account for about 40 percent of annual receipts.

And with sales down year-to-date, "there is a lot riding on this summer," said Dergarabedian.

The slump is likely to continue this weekend, too. Jane Fonda's return to the screen in "Monster-in-Law" isn't expected to jolt audiences awake.

Going down, down, down
The declines so far this year aren't anomalies. Audience levels have steadily dropped since 2002, said Dergarabedian. And the only reason 2004 was a record at the domestic box office was due to higher ticket prices.

The softness at the box office comes at a critical time for Hollywood. Not only are DVD sales hitting record levels, but new technologies have created an incipient demand for movies delivered directly via the Internet, over-the-airwaves, satellite dish or cable set-top box.

At the same time, movies have become exorbitantly expensive to market and distribute, and the growth of in-theater advertising, rising ticket prices and disruptive cell phones have made movie-going far less enjoyable.

None of these handicaps matter when a movie hits with audiences. Knowing that, Hollywood bet even more heavily than in years past on a calendar full of remakes of old films, and adaptations of popular television shows or best-selling books.

"A couple of years ago it was 'sequel, sequel, sequel,'" said Dergarabedian, speaking about the summer lineup before this weekend's box office bust. "I think Hollywood is erring on the side of caution by thinking that a concept that has proven to be successful can be a way to hedge its bets and take out some of the risk."

Almost all of the heavily-hyped summer flicks are remakes or TV homages, among them "House of Wax," "The War of the Worlds" from Viacom (Research)-owned Paramount, "Bewitched" from Sony Pictures Entertainment, Paramount's "The Honeymooners," "Mr. and Mrs. Smith" from Twentieth Century Fox Film, Disney's "Herbie: Fully Loaded," and "Charlie and the Chocolate Factory" from Warner Bros.

Pandya, of BoxOfficeGuru.com, thinks the glut of copycat films could turn out to be a bad gamble for studios. The top four box office draws so far this year -- Sony's "Hitch" at No. 1, followed in order by "Robots" from Fox, "The Pacifier" from Disney, and "Are We There Yet?" from Sony -- are all based on original concepts (See correction).

So are the summer season's projected hits, the sixth and final "Star Wars" installment and "Madagascar."

"It might take getting through the whole season to see whether remakes work or not," said Pandya. "But right now they're not selling."

If the early summer trends continue and the box office once more ends the year down, odds are that Hollywood will rethink how they deliver movies.

The end of the box office?
One notable difference this year: The top studios have collectively released about eight fewer films this year and are on track to finish the year with a total 126 releases, or about a dozen less than in 2004, according to Exhibitor Relations.

On top of shrinking the movie supply, another option that analysts point to is an accelerated DVD cycle. Certain movies could have a more limited theater release so as to generate just enough buzz to drive home video sales. This way, analysts say, Hollywood studios can cut back on their soaring marketing and distribution costs and get DVDs, a bigger moneymaker than box office ticket sales, to consumers faster.

One current example, according to Pandya, is "Crash," the star-studded drama about race relations in Los Angeles that opened this past Friday. The movie, said Pandya, "didn't open in 3,000 theaters like everything else." Lions Gate Films, the film's distributor, decided to do a smaller release on the hope the film will find a bigger audience with DVD sales.

A more extreme version of this -- known as direct-to-video, which involves bypassing theaters altogether -- has been happening for years with animation and horror films.

Pandya says faster DVD debuts with more films are possible if the box office slump continues.

That said, Pandya said the box office will never go away completely. "Harry Potter," "Lord of the Rings" and "Spider-Man" are always going to sell buckets of popcorn.

Said Pandya: "The big franchises are always going to sell. There's a level of excitement around them that sells."

"What a crazy business"
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Re: this sums up my worries..... 11 May 2005 15:20 #10513

  • Rialto
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Let's not all dive headfirst into mourning just yet. Consider this article which appeared today in Variety and reconsiders this year vs. last year comparisons without the anomoly of Passion of the Christ, which skewed last year's numbers. Read on...

Stop the madness

Reports of B.O. death greatly exaggerated

By GABRIEL SNYDER


Is the sky really falling at the box office?
Despite a steady drumbeat of dour diagnoses -- spurred by this past weekend's weak summer start -- a closer look at the numbers shows the movie business has been surprisingly healthy so far this year.

While fewer wide releases have bowed in 2005 -- and none of them has been "The Passion of the Christ" -- they are performing on average much better than the 2004 crop.

Also, many think a lot of the talk about the shrinking audience is going to be difficult to square with next week's expected monster opening for "Star Wars: Episode III -- Revenge of the Sith."

"The sky isn't falling," said Warner Bros. distrib prexy Dan Fellman. "It's important to look at where we are going."

Through last Sunday, receipts for 2005 stand at nearly $2.6 billion, according to Nielsen EDI. Over the same period last year they were almost $2.8 billion, meaning 2005 is running 6% (or $178 million) behind last year.

But it is impossible to talk about early 2004's box office without mentioning "The Passion," which, with $367 million in grosses before summer, was responsible for 14% of the entire spring and winter total.

At the time, some argued that because "Passion" had brought in so many people who hadn't been to the movies in years, its grosses weren't a good measure of the overall health of the marketplace (Daily Variety, May 19).

In fact, if it weren't for Mel Gibson and his crucifixion pic, 2004's winter and spring grosses would have been down 8% from 2003. Likewise, if you compare the 2005 winter and spring receipts to a "Passion"-less 2004, this year's box office is running 8% ahead of 2004.

The other big difference between this year and last year is that there have been far fewer wide releases thus far. In 2004, 52 pics were launched at 1,000 or more theaters in the winter and spring. This year there were just 39.

And this year's crop of pics has performed, on the whole, far better. Of last year's wide releases, 29 -- more than half -- opened lower than $10 million, and among them were some clunkers no studio would wish to repeat: "The Alamo" (which went on to cume only $22 million), "Envy" ($13 million), "Connie and Carla" ($8 million), "The Big Bounce" ($6.5 million) and "Against the Ropes" ($6 million).

Still, taken together, those low-grossing films (not every pic that opens below $10 million is a bomb) combined for a pretty big chunk of biz: Just their opening weekend grosses total $181 million -- or more than the entire gap between 2005 and 2004.

This year, only 10 of the 39 wide releases have failed to open bigger than $10 million. On the whole, the early wide releases in 2005 already have an average gross of $48 million per title. Last year, the eventual cume per pic was $45 million -- or $36 million not including "The Passion."

It doesn't matter much to theaters owners which movies people show up for -- tickets and popcorn cost the same at hits as they do at flops -- so studios see the bigger average gross per picture as a positive sign.

"It's better for the studios that those films didn't come out," said Revolution partner Tom Sherak, noting, "Even though they didn't work, they were a lot of business for exhibitors in concessions and whatever else."

This year, the studios have done a much better job at building hits before summer. So far in 2005, four pictures have grossed more than $100 million: "Hitch" ($178 million), "Robots" ($125 million), "Meet the Fockers" (which took in $117 million of its $279 million cume this year) and "The Pacifier" ($109 million). A fifth, "Million Dollar Baby," came very close, with $98.8 million for the year. Similarly, in 2003 and 2002, there were five films that had grossed more than $100 million through the first weekend of May.

Last year, though, other than "The Passion," only "50 First Dates" had crossed the century mark, with $120 million through this point.

Nonetheless, no one is disputing that summer got off to a soft start last weekend. Led by "Kingdom of Heaven's" disappointing $20 million bow, total box office for the weekend, according to Nielsen EDI, was $87 million, one of the worst starts for summer ever.

But one disappointment doesn't define a summer.

Fox is opening "Sith" on the same weekend that "Shrek 2" bowed last year, and the "Star Wars" sequel could rival the toon's $108 million opening. And during the Fourth of July weekend, where last year "Spider-Man 2" bowed with $116 million over four days, Paramount and DreamWorks have "War of the Worlds"

A big "Revenge of the Sith" bow will do much to quiet the box office pessimists. New Line is expecting big business for "Monster-in-Law" this weekend, as are Paramount and DreamWorks for, respectively, "The Longest Yard" and "Madagascar" over the Memorial Day span.

"You can quote me on this," Sherak said: "Give us some rain on Memorial Day, and Katie, bar the door!"
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Re: this sums up my worries..... 11 May 2005 16:13 #10514

  • onourown
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I think last weekend's BO would have at least doubled for Kingdom of Heaven if it was PG-13. I'm a baseball coach for my 11 year old's team. Most of the parents on my team would not take their 11 and 12 year olds to an R rated movie, even though all of the boys wanted to see Kingdom of Heaven.

I think Fox made a huge mistake by not insisting that this film come in as a PG-13. This film had the potential to draw in families and particularly young teen boys, but they missed it. This film could have brought in at least 50 million plus last weekend then all these cries of "the sky is falling" would not have been voiced.
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Re: this sums up my worries..... 11 May 2005 16:47 #10515

  • sevstar
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Most of us here are theatre operators. So how is it really going out there, Up, Same or Down from than last year? We are down from last year, since Sahara came out April 8th. I blame it on two things. So so product to choose from. None of it really exciting people. And most of all for us anyway the arrival of nice warm spring weather especially on the weekends. Nothing quite helps the sale of tickets like a rainy weekend. And the public around here love their outdoor activities.
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Re: this sums up my worries..... 11 May 2005 17:06 #10516

  • jacker5
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The last 3 weeks including this weekend coming has been bad weather. I am in Ny and the theatres i have been going to are empty, so are the ones my freinds work at the same.
Can't understand?
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Re: this sums up my worries..... 11 May 2005 19:23 #10517

  • wimovieman
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April for me, circuit wide, was 48% down from a "normal" April--and starting out shaky in May (hoping for good numbers with 2 prints "Star Wars 3" 2 "Medagascar" and 1 "Longest yard" but will take most of summer to recoup losses from April/May.

I do blame mostly soft product, but the summer-like weather we had here for 2.5 weeks of April did contribute.
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Re: this sums up my worries..... 11 May 2005 23:52 #10518

  • outaframe
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Well, I'm glad somebody finally opened up this can of worms... I have been sitting on my hands to keep from being the resident crepehanger and bringing up the current sad state of affairs... The numbers I have been seeing are even worse than those mentioned: admissions off nearly 10%, and BO down almost 8% from last year... That someone can spin this as ACTUALLY being good news just points up how many BS merchants there are in the studio's PR Depts... IF by some miracle Georgie's latest brainstorm should manage to snag enough suckers to bring things back to "average," then the smoozers will be telling us they told us all along there was nothin' to worry about... What they don't say is that Georgie is gonna take most of the cake, and although the numbers are back up, our end is STILL down, and the problem is STILL there, just with a pretty ribbon on it... Personally, I hope Georgie's epic falls on its over-hyped face, and then perhaps the industry will wake up and accept the fact they're making crap that nobody cares about seeing... How many pictures have YOU played in the last 2 years that YOU would pay to see?... Less than a dozen I'd bet...
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Re: this sums up my worries..... 12 May 2005 05:20 #10519

  • Mike Spaeth
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My box office is down 12.12% YTD. Attendance is down 21.39%.
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Re: this sums up my worries..... 12 May 2005 08:58 #10520

  • muviebuf
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There are two factors at work here one short term and one long term. For us independents in smaller markets it is the long term which has me the most concerned.

IN THE SHORT TERM - The movie business has always been the 'harbinger' of the economy. When things get a bit tight the average family cuts back on entertainement and small outings. Likewise it is the first thing to come back. In this era of $2.00 gas, a sputtering economy and rising inflation (can you say "stagflation") look for the average family to cut back.

IN THE LONG TERM - the constantly rising ticket prices and the focus on "event" films is slowly turning our business from a habit to an occassion.
For most small operators consistancy is the key to long term success.... the same people coming week after week. It is much better to do consistantly good than have huge weeks followed by empty ones (what I call the "rollercoaster effect")

Yet more and more the industry seems to drive people away from the "habit" of going out to the movie theatre. There are many factors.... continually rising prices being just one. I have heard all the arguments that a movie is still cheaper than sporting events, concerts etc. but that just reinforces my point. People don't go to concents and sporting events every week. Which is the kind of attendence we need to survive.

AND EVERY TIME YOU RAISE YOUR PRICES YOU ALWAYS GET LESS PEOPLE. You actually may make more money (at least in the short term) but it is cutting your own throat in the long term. I was just talking with Roxy who at the beginning of this year raised his evening price to all seats $3.00. While he is way ahead in money he is down nearly 1,000 people through the door.
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Re: this sums up my worries..... 12 May 2005 15:16 #10521

  • outaframe
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Well said BUF, you nailed it right on the head!... We killed the once a week moviegoing habit (some time ago) with ticket price increases, and have been living with the results for the last 20 years... We used to be mass entertainment, but are now indeed another special event thing... The crap they have been churning out lately is neither special, nor an event, and you're right again that $2 gasoline is gonna slow everything AND raise prices which just keeps the cycle feeding on itself... We're sliding downhill on the sharp edge of that mile long razor blade...
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Re: this sums up my worries..... 13 May 2005 12:46 #10522

  • jacker5
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To back up the Dying theater theory. I think the whole state of Pa. is going under. In my searches for theaters for sale I must have come across about 4 there alone. Juts going out of business. Small twins and there are plenty more form OK all around.
Some places are not even for sale they just pulled out and left the businesses.
It used to be the big guys would come in and take over but even there downsizing there small houses and either selling or going out of business all together.
Your going to see a lot of this but that always happens and things always turns around.
National amusements out were I am have a few smaller theaters there closing down this year and none of the big chains here unless started have any plans to build anything. There is also a great downsizing in union projectionist with more and more theaters going non union and only part time.
Everything from the Indies to the big chains is feeling a shakedown of a combination of the DC take over and people just not going to the movies.
What to do? I am worried because this is what I always wanted to do was get my own theater and I want to get more than a couple of years out of it.
I see the effects in a big city I can imagine the panic in the little cities.
I guess that is why the sudden theares for sale and the prices vary from almost giving away to the outragous!
The numbers don't add up for these porr guys trying to sell for big bucks! Lets all pray that this is just a bad year and things turnaround. We need a little gremlin for one thing to get into the DC peoples workshop and play havoc!
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Re: this sums up my worries..... 13 May 2005 20:46 #10523

  • Mike
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Man oh man. A few of you are really on a negative self flaggelation trip. Everything fluctuates and this happens to be a down moment. "killed the daily movie going by raising prices"? Did tv and news so people didn't have to get their news from the movies have anything to do with this? Things are not great but we are doing okay and expect to do better when the uptick pops along. I don't buy the negative. And like Mark Twain's there's a lot of "vastly premature" obits here. Lighten up.

Michael Hurley
Impresario
Michael Hurley
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Re: this sums up my worries..... 13 May 2005 23:52 #10524

  • RoxyVaudeville
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What bad year?

Every year fluctuates somewhat, and I don't see anything out of the usual here at my place. Yes, my admissions are down slightly, but only 2%. It's only down by 489 admissions. That can change with just a few films, and I see my product for the next month as being stronger then the same period last year.

Since I did have a slight increase in evening kids & senior prices, I am actually 10% ahead of last year in BO gross. Concession is also ahead of last year.

Why are my patrons still coming when others are not... nice theatre, low admission prices, low concession prices, No obnoxious video games, and NO SCREEN ADS!
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Re: this sums up my worries..... 14 May 2005 01:03 #10525

  • leeler
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I think the point of the article is that the industry as a whole is down significantly from last year. Attendance at my theater is actually higher this year from last but I'm new and so, that's skewing my numbers. I'm worried for two primary reasons at this point:

1). Moviegoing attendance has been down in the industry as a whole for several years now.

2). Digital cinema is coming in some form at some point and whatever form it takes is going to change the industry more then any other time in the past



[This message has been edited by leeler (edited May 14, 2005).]
"What a crazy business"
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Re: this sums up my worries..... 14 May 2005 01:49 #10526

  • revrobor
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OK Guys:

Did it ever occur to you that, if things are down, it's because you are playing the same thing everyone else is and what they are playing is what the distributors are promoting?

There is no shortage of product worldwide. Whatever happened to booking quality films from indies, Canadian, British and other foreign film makers and doing your own promotion? It's called "showmanship".

It's time to take back control of your own businesses and expand your audience demographic.



Bob Allen
The Old Showman
"Back In The Saddle Again"
Bob Allen
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