UIP heads for $2 billion year

United Intl. Pictures, the joint venture between Universal and Paramount, is on track to become the first theatrical distribution company ever, foreign or domestic, to gross $2 billion in a calendar year.

That was the tough target UIP set itself at the start of 2004. With a little help from the weakening dollar, it’s going to pass the $2 billion threshold a week or two before Christmas. The precise timing depends on just how boffo U’s “Bridget Jones: Edge of Reason” and DreamWorks/Par’s “Lemony Snicket’s a Series of Unfortunate Events” turn out to be. As of Nov. 28, UIP’s annual total stood at $1.86 billion.

The charge has been led by “Shrek 2” and “Shark Tale” from DreamWorks, the second “Bridget Jones” and “Van Helsing” from U, and the Par/D’Works coproduction “Collateral.”

The “Bridget” sequel is set to top its predecessor in foreign, with a gross to date of $193 million excluding France (where it will be released by Studio Canal, not UIP), vs. $210 million outside North America for the first movie. By contrast, “Edge of Reason” is unlikely to beat $50 million domestically, vs. $72 million for the first installment.

Tickets are tip of iceberg

Anyone who goes for a night out at the movies knows the ticket price is just a fraction of the evening’s cost. By the time you’ve loaded up on popcorn, gone for a burger afterward, paid the fare home and maybe the babysitter too, your pocket is considerably emptier.

Now, for the first time, research commissioned by the Film Distributors’ Assn. in Blighty has put a figure on all of that extra outlay. Per the FDA, £809 billion ($1.53 billion) spent on cinema tickets in 2003 directly generated another $2.49 billion in spending.

That total includes $900 million inside the cinema (popcorn etc); $1.58 billion immediately outside (dinner, travel, or linked leisure activities such as bowling or amusement arcades); and then further down the line, $593 million on buying the DVD of the film previously seen in the theater.

The FDA clearly intends to demonstrate that P&A spending by theatrical distributors is the engine for much more economic activity than they normally get credit for — the vast majority of which, probably 80%, never flows back into their pockets.

But the study, carried out over the past two years by research firm TNS, also contains an intriguing revelation about how little direct connection there is between the theatrical market and the DVD retail business.

TNS found that on average, only 20% of movie DVDs are bought by people who have seen the film previously on the bigscreen. That’s contrary to the industry model for DVD retail, which assumes that theatrical impact is the primary driver of ancillary sales, and that there’s a big crossover between the two audiences.

But if four out of five British DVD buyers haven’t even seen the movie, that means DVD retail is reaching a largely different audience, one which doesn’t go much to the cinema and has different tastes and characteristics. With DVD generating such huge revenues, the implications of that insight for production and acquisition decisions could be profound.

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