“A Year of Disappointment at the Movie Box Office”
From the NYT:
With five days left in 2011, ticket sales in North America are running about $500 million behind last year — despite higher prices — prompting a round of soul searching by studios trying to determine what went wrong and how best to proceed.
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That is only a 4.5 percent falloff from 2010. But studio executives are alarmed by the downturn nonetheless, in part because the real picture is worse than the raw revenue numbers suggest.
Revenue, for instance, has been propped up by a glut of 3-D films, which cost $3 to $5 more per ticket. Studios made 40 pictures in 3-D in the last 12 months, up from 24 last year, according to BoxOfficeMojo.com, a movie database. Theaters have also continued to increase prices for standard tickets; moviegoers now pay an average of $7.89 each, up 1 percent over last year.
Attendance for 2011 is expected to drop 5.3 percent, to 1.27 billion, continuing a slide. Attendance declined 6 percent in 2010.
Reasons for the downturn?
What has gone wrong? Plenty, say studio distribution executives, who point to competition for leisure dollars, particularly among financially pressed young people (the movie industry’s most coveted demographic); too many family movies; and the continued erosion of star power.
One more thing: “You have to go back and look at the content,” said Dan Fellman, president of domestic distribution for Warner Brothers. “Good movies always rise to the occasion. Bad ones, not so much.”
Once again with young people being “the movie industry’s most coveted demographic.” Sorry for the facts to get in the way of this conventional wisdom:
“As bad as the economy is for adults, it’s worse for teenagers,” said Phil Contrino, editor of BoxOffice.com, by way of an explanation. “Because they have less disposable income and because they are more plugged in to audience reaction on Facebook and Twitter, the teenage audience is becoming picky,” he added. “That’s a nightmare for studios that are used to pushing lowest-common-denominator films.”
Mr. Fellman said he had seen evidence that younger consumers were choosing other leisure activities over movies.
“There may be a correlation to the recent strength of video game sales,” he said. “You look at a game like the new ‘Call of Duty’ selling $400 million in its first 24 hours and say, ‘What? How is that even possible?’ ”
Young people have less disposable income than adults and have grown up with many more options for entertainment activity than older generations. Meanwhile:
On the other hand, several movies aimed squarely at older audiences attracted stronger-than-expected revenue, “The Help” was the prime example. That period drama cost DreamWorks about $25 million to make and took in more than $169 million in North America. “We definitely benefited from coming out at the end of summer, when women are sick of going with their husbands and boyfriends to nothing but robot and superhero movies,” said Brunson Green, a producer of the film.
The R-rated “Bridesmaids” (Universal) also clicked with older moviegoers, who perhaps responded, distribution executives said, to a premise that seemed fresh: women behaving as badly as the guys of “The Hangover Part II” (Warner), which was a smash with $255 million. “Bridesmaids” cost about $33 million and took in $169 million, causing a race in Hollywood to develop copycat films.
But still Hollywood focuses a majority of its movie development and production dollars on a demographic (young males) that seemingly is drifting away from movies.
This makes sense?
Here are some really startling numbers: Box office and ticket sales results from 1980–2011.
In 1980, ticket sales were 1,022 billion. That reflected a trend from the emergence of TV in the late 50s and early 60s: basically 1 billion ticket sales per year.
Then the number started to creep up… 1.1 billion in 1982… 1.2 billion in 1989… eventually hitting a peak of 1,575 billion in 2002. That represented an expansion of the market by over 50%.
Since then a general decline to an anticipated total in 2011 of 1,233 billion.
Is the number returning to that 1 billion mark? If so, what does this mean for the film business? What if 3-D peters out? How much higher can theaters push ticket prices before consumers push back? Indeed is the decline in sales already a reflection of consumers rejecting higher ticket prices?
Will Hollywood continue to chase after young people who may be turning away from the movie theater experience? Or will studios begin to develop more content for adults, Baby Boomers and seniors who continue to reliably show up in numbers for good movies?
Do these domestic numbers mean anything when international box office continues to grow? In 2010, foreign sales comprised 62% of all revenues, a figure sure to go up when 2011 numbers are finalized.
Finally a question: Speaking of disappointments, which 2011 movies disappointed you the most? Conversely which movies surprised you the most?
For more of the NYT article, go here.
And an AP article here: “Movie crowds dip to 16-year low as apathy lingers”.
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