Box office heading toward record despite economy
LOS ANGELES (Reuters) - A popular boy wizard, comic-book heroes and some foul-mouthed women are leading Hollywood toward a record-breaking summer despite the sour economy and high unemployment resulting in tightened consumer spending.
Underscoring the notion that movies are recession-proof, U.S. and Canadian ticket sales are expected to finish nearly 5 percent higher than a year ago thanks to the "Harry Potter" finale and other big-budget sequels plus raunchy adult comedies such as "Bridesmaids."
Summer ticket sales in the domestic (U.S. and Canadian) market through last weekend stood at an estimated $3.8 billion. Attendance was up 2.8 percent, though that was compared with last year's 13-year low, according to figures from tracking firm Hollywood.com. Premium charges for 3D films and slightly higher average ticket prices helped raise revenue.
"If we keep at this pace, we should wind up with $4.5 billion," the highest summer total ever, said Paul Dergarabedian, box office analyst with Hollywood.com.
The summer film season -- usually measured from early May through Labor Day weekend in September -- represents the most lucrative time of the year for studios, providing as much as 40 percent of annual box-office dollars.
Still, year-to-date box office revenue is down 4 percent from 2010 while attendance has shrunk 5 percent after weak winter and spring ticket sales. Studios need a strong holiday season to regain lost ground at a time when the U.S. economy is sputtering.
"Overall I think people are feeling good" about the summer results, said Rory Bruer, president of worldwide distribution for Columbia Pictures, a unit of Sony Corp that rang up big sales with family film "The Smurfs."
HOLLYWOOD BUCKS THE ECONOMY
The strong summer box office belies recent data on consumer spending from the Bureau of Economic Analysis, which showed that Americans spent less and saved more money in June, just as the summer season was moving into full swing. It also goes against concerns among economists about the possibility of a double-dip recession brought on by high unemployment and anemic economic growth.
But moviegoing, which is one of the cheaper entertainment options for consumers, usually holds up in weak economies, industry players said. For instance, in summer 2008, the most recent comparable period to this summer in terms of the macro-economy, domestic box-office sales gained 0.5 percent year-over-year, though that was largely due to ticket price increases. Attendance actually fell 3.7 percent that summer.
Box-office success is tied more to the quality of the films than economic trends, Dergarabedian said. "Good movies are recession-proof," he said.
Chris Aronson, senior vice president for domestic distribution at 20th Century Fox, added that "lower-quality 3D films could be under pressure as audiences become more discerning." Overall box-office totals for 2011 "will probably get to a position where we are level with last year," he said.
WINNERS AND LOSERS
This summer's standout performers thus far include "Harry Potter and the Deathly Hallows - Part 2," which broke records worldwide and was among three movies to sell more than $1 billion globally. The others were the third "Transformers" and fourth "Pirates of the Caribbean."
"The one consistent area of success is still in the big franchise and in the big sequel," said Rob Moore, vice chairman of Paramount Pictures, a unit of Viacom Inc.
Foul-mouthed women scored big with better-than-expected sales for "Bridesmaids" and "Bad Teacher." Another adult comedy, "The Hangover 2," also was a hit.
Superheroes abounded on screens -- to mixed results. "Captain America: The First Avenger" and "Thor" performed well while "The Green Lantern" fizzled.
Four of the five highest-grossing summer 2011 films were offered in 3D, as were several other summer flicks. But filmgoers often decided to live with two dimensions, sparking a debate in the industry over whether the appetite for 3D movies had petered out.
"Avatar" director James Cameron recently urged Hollywood to make sure 3D movies provided a quality experience to justify the higher price.
"This is a good moment for Hollywood to acknowledge that they have to try harder to maintain the idea that 3D is a premium experience. We can't take cheap routes," Cameron told Reuters in an interview.
Walt Disney Co's revered Pixar animation unit for the first time stumbled with critics who panned "Cars 2." The film has proven resilient with audiences, however, surpassing the original's box-office tally with more than $476 million in gross sales worldwide.
But the strong performance of sequels this summer has a downside.
"There really weren't any new franchises created ... This summer may wind up with record gross (box office), but I don't know if enough seeds were planted for the future," said Brandon Gray, president of industry tracking firm boxofficemojo.com.
From that perspective, the rest of the year appears ominous for studios, with sequels to "Twilight," "Mission Impossible," "Happy Feet" and "Alvin and the Chipmunks" all set for release.