Pic costs growing astronomically while admissions decline
Film production and marketing costs soared last year as Hollywood studios continued to focus on mega-wide openings of tentpole pics.
Detailed at ShoWest 2004 by retiring Motion Picture Assn. of America prexy Jack Valenti, the latest figures on studios’ theatrical expenditures were extravagant enough to make a Sin City high-roller blanch.
Production spending by the seven MPAA members rose 9% to an average $63.8 million last year, and studios coughed up another $39 million to market each pic. That amounted to a breathtaking 28% leap in prints and advertising.
Together, the outlays repped an average $102.9 million to make and market a picture, up 15% from 2002.
“There’s not much more that can be said, except that budget discipline will be a fervid priority among studio executives,” Valenti said in his final state-of-the-industry address.
Among other tidbits noted in Valenti’s speech: a 4% decline in U.S. admissions, with 1.57 billion tickets sold to reap $9.5 billion in box office.People ages 50-59 marked the biggest annual increase in moviegoing as a demo, with a 20% surge. So it was perhaps not so coincidental that R-rated pics were more prevalent last year: Six of the top 25 grossers were rated R, compared with just one in 2002.
National Assn. of Theater Owners prexy John Fithian welcomed Hollywood’s recent return to releasing select films with an NC-17 rating.
“Every rating in the system has a function,” Fithian said, noting three 2004 titles will be marketed with the adults-only designation. “The myths about why the NC-17 rating wouldn’t work have been shown to be just that — myths.”
Valenti, who pledged to maintain an industry connection after he steps down for a successor yet to be named, was honored at a show-closing awards gala March 25 with a ShoWest Medal of Honor bestowed by Warren Beatty.
Celebs were also on hand elsewhere at ShoWest, with distribs staging high-gloss receptions of the sort once thought to be on the way out at the annual confab for exhibs and distribs.
Some studios used technology partners to help shoulder costs of their shindigs, but Lions Gate, Miramax, Paramount and 20th Century Fox all staged their own events.
Sony brought cast members to its presentation of an extended clip of “Spider-Man 2,” whose release date the distrib announced will move from July 2 up to June 30.
DreamWorks partnered with electronic cinema proponent DLP Cinema to present a behind-the-scenes look into digital filmmaking.
Lions Gate, partnering with d-cinema vendor Christie Digital, screened its Marvel Studios co-production “The Punisher,” Miramax offered a look at its family release “Ella Enchanted,” and New Line showed off lit-adaptation “The Notebook.”
In perhaps the glitziest event during the four-day confab, stars from Par’s upcoming “The Stepford Wives” including Nicole Kidman, shared a dinner dais with cast members from several other of the studio’s looming releases. Denzel Washington, Meryl Streep and Liev Schreiber were on hand for “The Manchurian Candidate,” as were Jude Law and Gwyneth Paltrow for “Sky Captain and the World of Tomorrow.”
Fox and Fox Searchlight similarly tubthumped upcoming titles, including former’s summer tentpolers “The Day After Tomorrow,” “I, Robot,” “Alien vs. Predator” and “Garfield.”
Among events aimed at international exhibs, Valenti provided for the first time a state-of-the-industry overview of foreign territories similar to his traditional address on domestic stats.
International B.O. including Canadian grosses rose 5% to $10.85 billion last year. That repped 53% of an industrywide $20 billion in worldwide B.O.
Some 51% of the foreign total came from Europe — though admissions were down in most European territories — while Asian-Pacific territories contributed 35%, Latin America 7% and Canada 6%.
Seven movies topped $250 million in foreign coin, with “Finding Nemo” and four other films repping the top five grossers in both domestic and international markets.
Veronika Kwan-Rubinek, international distribution prexy at Warner Bros., said at the fest that markets including Russia, Japan, Italy and Brazil remain underscreened. Execs noted that the advent of digital cinema is helping a quicker expansion of Asian-Pacific exhibition than otherwise would be possible, and general market expansion is fueling an exponential rise in Russian receipts.
An $18 million market in 1999, Russian B.O. has doubled every year since to reach $190 million in 2003. Moscow and St. Petersburg grosses accounted for 50% of that total, suggesting continued growth opportunities elsewhere in the market, execs noted.
Movie piracy siphoned off an estimated $275 million in potential additional revenue, Kwan-Rubinek said. But she added that a recent crackdown on street vendors hawking pirated videos should help.
“Day-and-date releasing has had an impact on Internet piracy,” she added. “But it is not always the right strategy for every film.”
Movie piracy “is no longer limited to smaller markets,” the Warners exec said, with annual piracy losses in the U.K. and Germany estimated at $120 million and $100 million, respectively.
Valenti screened an antipiracy trailer created with help from Warners, 20th Century Fox and others. Billed as a “public persuasion” measure, trailer is being tailored to individual markets and will be distribbed in Europe, Latin America and Asia.
Organizers said ShoWest attendance rose about 9% this year to 2,700 fully paid registrants.