B.O. goes from fat to flat

High hopes shattered as summer ticket sales dip

The music industry has hit a low note and television’s future has gone blurry, so thank goodness that the movie biz is going gangbusters — right?

Wrong. The celebration about the year’s box office seems like a once-tantalizing ice cream cone that quickly melted in the summer sun.

Sure, B.O. was up this summer — but so were marketing and production costs. And the key factor in the “record” box-office was the rise in ticket prices, not attendance. In fact, ticket sales dropped this summer.

From January through May, box office for 2002 was pacing as much as 20% ahead of last year. But those gains hit a wall in summer, when grosses were $6.27 billion — a measly 2.4% ahead of last year. No official data is available yet on mid-year ticket prices, but the best guess is that they’ve risen at least 3%.

Still, due to the rah-rah first five months, the year’s box office is 12% ahead of 2001. But the summer slump raises the question: What’s going to happen for the rest of the year?

As always, summer provides key clues.

Despite a season that was chockablock with tentpole releases distributed in an ever-wider numbers of theaters, the bottom line is that the number of moviegoers is simply not going up in most demographics. (Interestingly, the biggest jump in moviegoing is in the over-50 demo — an audience that was often ignored by studios in their summer slate.)

The summer’s “saturation”-level releases — pics that unspooled in 2,000-plus theaters — opened to an average $21.9 million. That was 14% less than the average opening gross in the previous summer, according to data from B.O. tracker Nielsen EDI.

Should the film biz hit the panic button?

Most major-studio execs contacted by Variety were relatively sanguine about the plateau-ing of summer admissions; some even argued that flat stats are good amid plummeting TV ratings and ever-expanding entertainment choices tugging at prospective moviegoers.

But summer 1999 proved that box office could go beyond the plateau. The season hit a modern peak with a record 549.8 admissions, topped by the $281.2 million seasonal perf of “Star Wars: Episode 1 — The Phantom Menace” (the bulk of that pic’s $431.1 million in total domestic B.O.).

This year’s crop of weaker bows came despite an increase in the average theater count. From Memorial Day through Labor Day, saturation-level releases unspooled at an average 2,836 locations, 3% more than last year.

And there were 33 saturation-level releases this summer, compared to 26 in summer 2001.

“The leading contributor to the record summer was more films playing in more theaters, because our average opening gross was actually down,” EDI exec veep Dan Marks summarizes.

One factor in the softer opening grosses may be the aging of the U.S. moviegoing population: Older moviegoers are much less likely to see a film in its opening weekend than younger patrons.

Demo breakdowns of moviegoers surveyed by the Motion Picture Assn. of America in 1990 vs. 2000 showed shrinkage or stagnation in all demos under age 50.

For instance, 14% of all moviegoers in 1990 fell in the key moviegoing demo of 25-29, but by 2000 (the latest year for which such data is available) the figure had shrunk to 12%.

Twelve years ago, kids aged 12-15 made up 11% of all pic-goers; 16-20 year-olds were 20%. By the year 2000, those figures had shrunk to 10% and 17% — significant drops, since teens are a main focus in studios’ summer B.O. pushes.

However, over the same time span, the percentage of moviegoers age 50-59 swelled to 10% from 5%.

Summer pace

As for the pacing of the last three months, summer ’02 started strong but got weaker by the month.

Thanks to strong pics such as Sony’s “Spider-Man” and Fox/Lucasfilm’s “Star Wars: Episode II: Attack of the Clones,” May — which technically includes only one summer weekend — saw more B.O. than any of the following three months.

In May, the average opening was $36.4 million; June bows averaged $26.3 million, July $20.6 mil and August $18.9 mil. (Last year, perfs peaked in July.)

Further adding to the seemingly impossible task of putting together a truly boffo summer, the industry’s biggest releases continued to see precipitous second-weekend drops from opening grosses.

This summer saw an average second-sesh drop of 50%. That was a modest improvement over the 52% average dip of summer ’01 but compares horribly to the 40% average falloff in the record summer of 1999.

As for the rise in ticket prices, the actual figures won’t be tallied until next year; but with $10 tickets now common in a few markets and premium-cinema concepts getting a push, it’s safe to say that prices are still climbing. (Same is true of marketing and production costs.)

Sony on top

Among studios, final summer ’02 tallies give Sony industry bragging rights. Sony set a new summer B.O. record of $694 million with hits including “Spider-Man,” “Men in Black 2,” “Mr. Deeds” and “XXX.”

The result was an impressive 23% market share.

Disney — whose summer winners included “Lilo & Stitch” and “Signs” — finished No. 2, ringing up $437.1 million in summer B.O., or 14% of the market.

Warner Bros. squeaked by 20th Century Fox for third place with $366.7 million, or a 12.1% share; Fox tallied $364.9 million, repping a 12% share.

New Line’s “Austin Powers in Goldmember,” a July 26 opener, proved the top perf between Memorial Day and Labor Day frames with $203.5 million. Disney’s “Signs,” which bowed Aug. 2, was second-best with $195.6 million.

With its Pyrrhic victory at the summer box office, Hollywood is looking at the rest of the year with a mixture of hope and anxiety.

John Fithian, prexy of the National Assn. of Theater Owners, emphasizes that exhibitors are benefiting from the studios’ newish strides toward a year-round release schedule.

Accentuating the positive, Fithian concludes, “The last three months of the year look strong and next year looks good, too.”

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