The incredible shrinking aud

Pix suffer from audience deficit disorder

It was tough-going at moviehouses around the world in 2003 — and the problem may be getting worse.

A feel-good movie like “Finding Nemo” or a vast epic with universal themes like “The Lord of the Rings” can wow them from Bordeaux to Bangkok. But unleashing dozens of $150 million films aimed at the global mainstream audience is an increasingly losing proposition.

The Hollywood juggernauts found it a challenge to ratchet up their annual overseas box office revenues; local pics appealing to national auds were also a hit-and-miss affair.

In short, a small number of Hollywood pics did truly boffo biz, while local films in Italy, France and the like generally failed to make up the difference.

The old saw that Europe can be counted on to bail out a disappointing Hollywood movie didn’t hold up in many instances: “Peter Pan,” “Looney Tunes” and “Beyond Borders” were turkeys in Turin and Toulouse as well as in Tampa and Tucson.

On the plus side, Disney’s “Nemo” and “Pirates of the Caribbean” helped propel the Mouse House to the top spot among the majors with a studio record of $1.8 billion in grosses by year’s end.

“Matrix Reloaded” and “Matrix Revolutions” topped the performance charts for second-ranked Warners, which was just beginning its rollout of “The Last Samurai” at year’s end.

But it was another Time Warner unit, New Line, which stole the show at year’s end: “LOTR: Return of the King” was unleashed in 38 territories beginning mid-December and had reeled in a stunning $300 million from those wickets by Dec. 31.

Despite “Nemo” early in the year and the final “LOTR” installment at the end, the Hollywood majors saw their final foreign tally inch up to $7.425 billion, just a 1% increase over 2002. (And that’s despite a skyrocketing euro, which translated into noticeably more dollars at the B.O. window in Europe.)

Lingering recession, piracy, rising ticket prices — and fewer compelling movies — also contributed to making 2003 a bummer year in most foreign markets.

The impact of DVD-watching abroad is not yet clear but could cut into moviegoing in the next couple of years. The DVD phenom is part of the more customized, individualized approach to leisure that is turning the phrase “mass audience” into an oh-so-20th-century concept.

While they haven’t yet started addressing this new shift in the pop culture paradigm during brainstorming sessions, the Hollywood majors are finally beginning to tackle their most long-standing nemesis: piracy. To that end, the studios began opening more movies abroad day-and-date with their domestic release.

Warners international distrib prexy Veronica Kwan-Rubinek says we’ll be seeing “a lot more of this practice” in years to come. B.O. grosses are up in Russia and in China, she believes, because the pirates were flummoxed by the quickened release patterns.

In Europe, Hollywood held its own, but just barely. Local pics scored in a few territories but fell flat in most others.

Total B.O. was off in the U.K. for the first time in six years, and for the second year in a row in France.

Germans and Italians did line up at least to see pics about their own past — “Good Bye Lenin!” and “The Best of Youth,” respectively — while the Czechs checked in for a black comedy called “Pupendo.” A feisty Dutch distribber, A-Film, fielded a winner in “Phileine Says Sorry.”

Thanks to aggressive multiplexing, Russia’s B.O. skyrocketed almost 100% year-on-year, with the Tinseltown contingent taking three-quarters of that total; but 15% fewer Poles went to the wickets — those who did flocking mainly to Time Warner behemoths “Harry Potter” and “LOTR: Two Towers.”

Admissions were way off in Mexico, too, where a ticket price hike dampened moviegoer enthusiasm.

Recognizing what they already knew about the foreign TV biz — that local stories are most compelling and that Yank fare doesn’t always travel well — Hollywood film players got more deeply involved in foreign co-productions.

In Britain, Hollywood companies were responsible for helping to make or distribute a number of local hits, from “Love Actually” to “Johnny English.” In Spain, Disney’s local arm handled four popular local pics for an additional B.O. haul of $27 million.

Kwan-Rubinek says Warners’ efforts abroad with local pics paid off handsomely, with triple the grosses from this initiative in 2003 over the preceding year.

As to why Hollywood is managing so well to horn in on local projects, one British exec opines: “First, the majors are smarter at their greenlight decisions, and second, they are more invested, emotionally and financially, in getting a successful outcome.”

Meanwhile, a number of Hollywood blockbusters, especially but not exclusively summer popcorn movies, landed like a thud in foreign hardtops.

Auds in Japan, for example, turned up their noses at a clutch of American franchise pics, including “The Hulk,” “Charlie’s Angels” and “X2,” preferring local faves like “Yomigaeri” and “Kisarazu.”

Even likely Oscar contenders didn’t always translate well: Fox’s “Master and Commander” found itself in rocky waters here and there around the globe, while Universal’s “Seabiscuit” failed to come out of the gate in various countries.

Below, a rundown of the past year’s B.O. fortunes of Hollywood and local players in a dozen key territories:

UNITED KINGDOM

Britain headed for its first admissions drop in six years, with ticket sales topping out at approximately 165 million, down from 176 million in 2002.

But that 2003 tally is still the second-highest admissions figure in three decades, so talk of a crisis is premature.

The big question is whether growth will resume in 2004.

British admissions have been on an upward curve since they hit a rock-bottom 54 million in 1984. Subsequently there have been a couple of one-year blips when ticket sales fell, but never two down years in row.

One topper at the British arm of a Hollywood major fears the 2003 slump might be the first evidence of piracy starting to bite into B.O.

“We’re at a turning point,” he warns. “(2004) is the litmus year. If admissions go down again, we’ll know that the period of growth is over.”

Amid the overall B.O. gloom, however, it was a relatively good year for the Hollywood majors — and a terrible one for local indie distribs. Only exception: Entertainment Film Distributors, buoyed by its New Line output deal.

The market share of the majors midway through December was 82%, compared with 75% at the same point last year. In fact, the majors look set to record their highest market share since the peak of 84.5% in 1999, after which their share dropped for three consecutive years (testimony partly to the “LOTR” effect).

Entertainment alone accounts for 10% of the total indie share of 18% in 2003 to date. New Line in turn accounts for more than three-quarters of Entertainment’s take (pre-“Return of the King”), although the U.K. outfit’s top pic was a non-NL title, “Gangs of New York” ($18.3 million, No. 17).

Remove Entertainment from the picture and the highest-grossing indie movie comes in at No. 49 — “Jeepers Creepers 2” from Pathe ($6.1 million).

British movies fared especially poorly in 2003.

Calculating market share for Brit pics is always a vexed issue, since there are so many Anglo-Hollywood co-productions. However, best estimates suggest that Brit market share fell to 9.5%, even including Hollywood’s Brit pics; local pics had been nudging 20% or more for the last few years.

The absence of a “Harry Potter” pic accounts for some of that difference.

More startling is the revelation that the market share for Brit pics released by local indie distribs was a paltry 0.4%. In other words, Brit pics handled by the Hollywood majors accounted for 9.1% out of a total British share of 9.5%.

That list is headed by Universal/UIP’s “Love Actually” ($53 million), Buena Vista’s “Calendar Girls” and Universal/UIP’s “Johnny English.”

Then come “S Club Seeing Double” (Columbia TriStar, $4 million) and “Nicholas Nickleby” (UA/Fox, $1.9 million).

The most successful indie Brit pic was Icon’s “Bright Young Things,” although its $1.9 million gross is regarded as a flop.

Adam Dawtrey


GERMANY

Germany saw a noticeable drop at the B.O. this past year, but local hits like “Good Bye Lenin!” and “The Miracle of Bern” helped propel the market share of Teutonic films well above the 15% mark after a disappointing showing in 2002 of 12%.

End-of-the-year Hollywood blockbusters like “LOTR: Return of the King” were set to make up for some of the disappointments earlier in the year.

“Finding Nemo,” which opened Nov. 20, had netted $46 million by Dec. 28, and local exhibs are expecting “LOTR: King” to surpass the $89 million registered by last year’s “The Two Towers,” thanks to increased interest from the second pic’s DVD success and the fact that “King” is the final installment in the Tolkien trilogy. (In its first two weeks in release in late December, “King” had grossed $49 million.)

Such a phenom was welcomed after a year plagued by record summer temperatures that kept auds out of cinemas, as well as flops including “The Hulk,” and sputtering franchise installments “Lara Croft: Tomb Raider” and “Star Trek Nemesis.”

“Charlie’s Angels 2: Full Throttle” and “Terminator 3: Rise of the Machines” also turned in disappointing B.O. performances.

German Film Board spokeswoman Ann-Malen Witt says piracy and an overabundance of sequels added to the B.O. doldrums.

For local pics, however, 2003 will go down as the year in which German filmmakers delved into the country’s complex history to create pics that were embraced by both local and international auds.

The local market share is expected to near the 18% level of 2001, when comedy Western “Manitou’s Shoe” took the country by storm.

“Good Bye Lenin!,” which swept both the German as well as European film awards and raked in $47 million at the B.O., highlighted the East-meets-West culture shock that resulted with the fall of the Berlin Wall and the country’s reunification.

“The Miracle of Bern” ($22 million gross) looked at the seldom-discussed issue of Germany’s World War II POWs and their bittersweet homecoming after years in Soviet prisons. That experience is set against the 1954 World Cup soccer championship (Germany vs. Hungary) that lifted the spirits of a war-wearied nation.

Similarly, Eric Till’s “Luther,” about the rebel Catholic priest who led the 16th-century Protestant Reformation, turned out to be a sleeper hit for both religious western Germans as well as traditionally atheist eastern Teutons who nonetheless see Martin Luther as an iconic local hero.

The English-language international co-production, which was shot throughout Germany and stars Joseph Fiennes and Peter Ustinov, has grossed $16 million.

— Ed Meza

JAPAN

“Yomigaeri: Resurrection” was the year’s first sleeper. Last January, local distrib Toho planned a maximum of three weeks in limited release for the pic, but it went on to gross an impressive $24 million during 12 weeks of a wide release.

This was the beginning of a year in which local films bested major Hollywood entries in the world’s second-largest market for American fare.

“Things are changing. The old rules don’t apply anymore,” says one local distributor. “Audiences got tired of the American tentpoles, which are always the same, just in different wrapping.”

Case in point: The local police drama sequel “Bayside Shakedown 2” hit screens July 19 amid the important summer season in which U.S. blockbusters traditionally dominate Japan’s 2,700 screens.

By summer’s end, “Bayside” had become Japan’s biggest-grossing live-action feature ever. Three months later it was still in release, with a tally of 12.7 million viewers and $158 million in the kitty.

Meanwhile, the Hollywood majors could do little as one after another of their tentpoles folded after buoyant opening weekends — aggressive promotion notwithstanding.

“The Hulk” was one of the main disappointments, followed by “Charlie’s Angels 2: Full Throttle,” “The Core,” “2 Fast 2 Furious,” “Lara Croft: Tomb Raider,” “The Italian Job,” “The League of Extraordinary Gentlemen,” “Phone Booth” and “X2.”

This debacle left few top performers for the U.S. majors in Japan during 2003.

“The Matrix Reloaded,” “Terminator 3” and “Pirates of the Caribbean” did manage impressive performances, with “Chicago” and “Kill Bill Vol. 1” following closely.

“The Last Samurai” and “Finding Nemo” were both released Dec. 6 to boffo B.O. while “Matrix Revolutions” was still going strong after five weeks. “Samurai” was approaching the $45 million mark in Japan by year’s end.

The usual predominance of Hollywood movies was also impacted by competish from other parts of Asia.

China’s blockbuster “Hero,” released locally by Warner Bros. Japan, was shrewdly marketed as the “Matrix from the East” and came home with $35 million from its theatrical release.

Several Korean films did respectably as well.

But local faves — “Bayside,” “Yomigaeri: Resurrection” and “Kisarazu Cats Eye” (released in mid-November on only 128 screens, with $10 million in receipts in six weeks) — combined to boost the market share of local films to 40% (from 29% in 2002).

Despite “LOTR,” “Samurai” and “Matrix,” 2003 will be remembered as the year in which Japan’s audience showed clearly that it wants more than f/x and action heroes.

— Lukas Schwarzacher

FRANCE

France remains Europe’s B.O. leader this year, even though Gallic admissions fell 7% to around 172 million.

It will be the second year in a row for ticket sales to go down in France, after more than a decade of steady growth.

Local product tends to determine a good year over a bad one in France, and a defining factor in 2003 was the absence of a smash hit on the scale of “Asterix and Obelix,” which notched 14.5 million admissions in France in 2002.

“It’s simple,” says a spokesman for France’s National Federation of Cinemas. “If we’d had an ‘Asterix’ this year, we’d be up to 2002’s figures.”

Instead, in the first 11 months of 2003, the closest thing was “Taxi 3,” which came out in January and didn’t perform half as well as “Asterix,” notching 6.1 million admissions.

“Taxi 3” was the only film to have crossed the 5 million threshold last year, with Gaul’s second-best-performing pic the Warner Bros. France-backed transvestite comedy “Chouchou,” with nearly 3.9 million admissions.

Compare that with the four French pics that scored more than 5 million admissions in 2001 — “Amelie,” “The Closet,” “Brotherhood of the Wolf” and “La Verite si je mens! 2.”

The French retreat in 2003 has naturally benefited Hollywood fare, which crept up a percentage point to a 52% share of the B.O. in the first 11 months of the year, compared with 50% for the same period the year before. Local films share has dipped by 1% to 38%.

But “Nemo” notwithstanding, American pics didn’t exactly shine in France in 2003.

The only U.S. pic to pass 5 million admissions, pending final late-December calculations, was “Matrix Reloaded,” although the final “LOTR” pocketed $29 million in its first two weeks.

Having become accustomed to growth over the past decade, exhibitors and distributors are genuinely worried about the year’s B.O. decline, offering myriad — and often conflicting — explanations for the phenom.

“There aren’t the films,” is the common moan of exhibitors.

Continuing economic gloom, a series of strikes in the first half of the year and a long, hot summer also did their bit to keep French auds out of theaters.

But many exhibitors fear that the habit of moviegoing is under greatest threat from the DVD explosion and the ever widening availability of movies on theme channels and the Internet.

Alison James

ITALY

While admissions dropped dramatically across most European territories, Italy held on to its moviegoers in 2003, tallying 74 million tickets sold between January and November, a 0.1% drop compared with the same frame the previous year.

But the Italian market remains severely underdeveloped — and underscreened — compared with Spain, Germany, France and the U.K. That’s despite a 9% rise in the number of screens. Screens grew due to a belated plex proliferation.

Yet too many plexes are in urban areas and not in remote parts, such as the country’s south, where they are most needed.

Total B.O. during the year was approximately $580 million, up 2% up from 2002, due to price hikes.

Admissions were not expected to total more than 110 million by year’s end.

“We are in a transitional period,” says UIP Italy chief Richard Borg, who is also prexy of the country’s distrib org. “But the indicators are positive, considering the negative economic climate and the lack of really strong product.”

The U.S. share of the Italian market in 2003 grew about 5% to 65%, with “Harry Potter and the Chamber of Secrets” and “LOTR: The Two Towers,” well above the $25 million mark.

Like the rest of Europe, Italians were also magnetized by the “Matrixes” (“Reloaded” and “Revolutions” were both in the top 10) and boatloads sailed with “Pirates of the Caribbean.”

Unlike their neighbors, Italos all but dissed 007’s “Die Another Day,” which made a measly $7.2 million. They also snubbed “Charlie’s Angels 2: Full Throttle,” which grossed just $3.1 million, according to Cinetel, the box office compiler that monitors some 70% of the country’s screens.

And like most other Europeans, they didn’t ride with “Seabiscuit.”

Instead they made time for “The 25th Hour.” Distributed by BVI, Spike Lee’s drama about a convicted drug dealer’s final day of freedom pulled in a cool $4.4 million, pic’s best performance in Europe and a record for Lee in Italy.

It was a pretty positive year for Italy’s indie distribs, which account for 44% of the market, while Hollywood studios comprise the other 56%.

Relative newcomer Nexo celebrated its third year, boasting best European grosses for “My Big Fat Greek Wedding,” “About Schmidt” and “I Am Sam.”

Eagle, also a 3-year-old outfit, fared handsomely with “The Texas Chainsaw Massacre” which recently opened at No. 1, and did fairly well with “Confessions of a Dangerous Mind” and “Far From Heaven.”

Silvio Berlusconi’s Medusa — the local top dog — lorded it with the second “LOTR” installment, while for RAI Cinema the best performers were domestic comedy “Caterina Goes to Town,” Paolo Virzi’s ironic portrayal of Berlusconi-era Rome, and Marco Bellocchio’s Red Brigades-themed drama “Good Morning, Night.”

Generally, Italians embraced local pics centered around family themes and rooted in their recent past.

Besides Bellocchio, historical trend was underscored by Bertolucci’s 1968 tribute “The Dreamers,” which had a nice run, and also by Marco Tullio Giordana’s six-hour “The Best of Youth.” Giordana’s two-part epic tracking 40 years in the lives of two brothers who grew up in the ’60s, scored an eye-popping $2.5 million.

Italos rejected Mafia and conspiracy-theory pics, such as “Secret File,” a pic about a 1947 anti-Communist killing spree.

As usual, top Italian titles were two Christmas laffers, “Christmas on the Nile” and “The Legend of Al, John and Jack,” which scored more than $25 million.

Two more weighty titles, Ferzan Ozpetek’s tale of repressed romance, “Facing Windows,” and Gabriele Muccino’s portrait of a dysfunctional family, “Remember Me,” fared handsomely, pulling in more than $12.5 million each.

Comic Carlo Verdone’s “It Can’t Be All Our Fault,” about a bunch of Romans in group therapy, weighed in above the x5 million ($6.2 million)mark. Pic went out via Warners and marked that major’s first foray into Italian production.

Fox Italia also started dabbling with local product in 2003, releasing two small comedies, “Io no” and “Uomini e donne, amori e bugie.”

Fox is expected to start boarding more beefy Italo pics under recently appointed head of Euro co-productions Teresa Moneo.

Nick Vivarelli


SPAIN

B.O. grosses should hold their own in Spain, though just barely. Total B.O. through Nov. 30 rose 1% to $669 million compared with the same period in 2002.

Admissions dropped 3% to 116 million.

A sparkling “Nemo” bow (five weeks: $24 million) led a late-year rally, with full-year 2003 B.O. expected to finish slightly up on 2002’s $762.5 million and tix sold a touch down on 2002’s 140.7 million.

“B.O. should roughly be level with 2002, admissions a bit below,” says Jose Manuel Pimenta, managing director of EDI Nielsen Spain.

After year-on-year admissions growth from 1988 to 2001, frantic multiplexing — 750 screens will have opened in 2003-04 — now seems insufficient to drive Spain’s B.O.

Exhibs blame underperforming blockbusters.

Spanish movies’ share should come in around 15%, up from 2002’s 13.7%.

Yet U.S. market share may top out at 70%. That’s par for 1998-2003 (an average 69%), but below 1994-98’s average 74%.

With U.S. market share seemingly flat, profit-pressured majors’ sub-branches are creating production/distribution relationships with Spain’s biggest production outfits.

The trend is gathering pace: Distribbed by Disney’s local arm BVI Spain, “Football Days,” “Carmen,” “La Fiesta” and “Fourth Floor” grossed a total $27 million during 2003.

Columbia TriStar has its first Spanish production, “Say I Do,” in post; WB is prepping its first Spanish production slate; Fox’s Teresa Moneo, who is Spanish, will galvanize co-productions across the Continent as recently appointed head of Euro co-productions.

The studios are also mopping up local indie pics: BVI Spain signed theatrical/video on 16 Miramax titles in early December.

U.S. studios’ market share (including the WB-Sogecable joint venture, Warner Sogefilms), rose from 70% in 2002 to 75% in ’03.

But producing successful local pics is no slam dunk for the studios either.

Best-perfing recent titles have a deep local retro appeal (“Mortadelo & Filemon”) or skew upscale (“Take My Eyes”), which is unfamiliar production territory for the Hollywood majors.

John Hopewell

HOLLAND

The Dutch B.O. inched up from $165 million to $166 million year-on-year in the first 11 months of 2003 due to higher ticket prices, while admissions remained flat at 21 million.

Hollywood’s grip on the local market is not necessarily increasing in the territory.

Major Hollywood distribs in the same 11-month period took a 71% market share. Local indies’ slice, at 29%, continued to edge up.

RCV Entertainment several years ago became a major distrib player, but now A-Film Distribution, with pics such as “Phileine Says Sorry,” is also taking a larger share.

Robert Jan Westdijk’s “Phileine” had already taken in $2.4 million by its ninth week. That’s compared with an American pic like “Bad Boys 2,” which by its own ninth week was drawing $3.7 million.

Market share for local pics rose to 12%, up 1.7% year-on-year in the first 11 months, with increased interest in home-grown fare pushing the numbers.

That interest has been boosted by increased quantity and quality of Dutch fare, stimulated by the extra coin put into movies under the on-again/off-again Dutch tax incentive scheme, which has been extended by parliament through 2004.

Dutch auds are increasingly taking to local romantic comedies.

Pics like “Costa” in 2001, “Full Moon” in 2002 and 2003’s “Phileine” drove numbers, but films like kidfare “Peter Bell” and dramas like Ben Sombegaart’s “Twin Sisters” also brought in healthy auds. “Twin Sisters” was the Dutch pic chosen to be considered for an Oscar nom for best foreign film.

U.S. pics took a 68% slice of the market share, up 1.5% from a year earlier, and other non-American films took a 20% share of the B.O.

Hollywood majors picked up six of the 31 Dutch films distributed in ’03 this year, but the market share of those pics was only 3%.

Marlene Edmunds

AUSTRALIA

The Hollywood majors tightened their vice-like grip on the Aussie B.0. in 2003 — more by default than design as Oz films struggled.

Through the end of November, the 20 local titles released had grossed $18.6 million, a 3.7% market share.

That’s shaping up as the worst result since local pics collared just 3% of the market in 1999; Aussie product clocked nearly 8% in 2000 and 2001, and 4.9% last year.

Producers can’t blame any slackening in the overall B.O., which is expected to post another record this year, improving by about 2% over 2002’s $591 million.

Nor can they say their films were crushed by Hollywood juggernauts.

“Most of the local films released this year got pretty good playdates and the number of screens the distributors wanted,” says Peter Cody, programming director of the Greater Union loop. “With a few exceptions, audiences did not respond to these films.”

The top-grossing Aussie pic, “Ned Kelly,” a bushranger saga featuring Heath Ledger and Naomi Watts fully financed by Working Title/Universal, fetched a disappointing $5.8 million. The best performers, relative to their costs, were low-budget laffer “Fat Pizza” ($2.5 million) and road movie “Japanese Story” ($2.4 million).

Through the end of October, the U.S. majors plus Roadshow (New Line’s distrib) dominated the market, accounting for nearly 93% of the industry’s grosses. The balance was divided among indies like Hoyts, Icon and Palace.

Some producers argue a string of critical and commercial failures has colored auds’ perception of Aussie cinema and hurt a few films that otherwise would have sold more tickets.

Brian Rosen, chief exec of funding agency Film Finance Corp. Australia, disagrees with that thesis, pointing to market research the FFC commissioned in August after the flop “The Night We Called It a Day,” which starred Dennis Hopper as Frank Sinatra and Melanie Griffith as his wife.

The research showed 64% of those surveyed were willing to see and support local films — as long as they were perceived to be good.

The top earners this year mostly were the usual Hollywood suspects.

Over-achievers included “Bruce Almighty,” “Charlie’s Angels 2: Full Throttle,” “How to Lose a Guy in 10 Days” and “The Italian Job.” Among those that didn’t match exhibs’ expectations were “Matrix Revolutions” and “Seabiscuit.”

— Don Groves

RUSSIA

Growth over the last 12 months looked set to repeat the stunning rate of 80% for 2002: Total returns should rise from 2002’s $110 million to the $200 million mark for 2003.

The impressive gains, matched by few world territories in today’s market, are largely fueled by a renaissance in exhibition, as more screens and plexes are built or upgraded.

The opening in September of Moscow’s 11-screener KinoStar, backed by National Amusements, may be the latest example — but it certainly won’t be the last.

With economic recovery continuing, the exhibition market is tipped to reach $500 million in a couple of years.

The only galling issue in the wider market remains piracy, which hits ancillary sales but not theatrical: In addition to the estimated $1 billion in revenue covering theatrical, VHS, DVD and through to TV, an impressive sum continues to evade the Russian exchequer and producers alike.

Growth of distribution is reflected most obviously in the number of prints.

This time a year ago, 175 copies was a topper; now the pinnacle is more like 240. The $26,500 screen average over the first five days of “Matrix Revolutions” indicates that top films are finding a ready audience.

Still, because local cultural feelings are strong — and often overlap with an anti-Hollywood sentiment — indie and arthouse releases attract larger audiences than in many Western European markets.

Not only do Moscow indie distribs buy more product than, say, their London counterparts, but they also release them much faster.

Russia is already the No. 1 territory for films from France — no doubt a remnant of the popularity of Gallic pics in the Soviet period, as well as active promotion by Unifrance.

The distribution of British films is a key activity of the U.K.’s British Council, while even movies from India — again, very popular in the old days — are also beginning to get a look-see in Russia.

Bottom line is that U.S. pics garner 75% of B.O. grosses, followed by Euro/world movies with 19%, and Russian pics with 6% — almost double the previous 12-month period for the last category, though hardly inspiring for those who remember the glory days (when there was little or no competition from abroad).

Nevertheless, even here prospects look better.

Summer’s key local hit “Boomer” has taken more than $1.5 million, while on the arthouse side, Venice prizewinner “The Return” grossed $343,000 in its first month. Neither went out through any of the major distrib companies.

Fest acclaim for the latter may have brought wide news coverage, and personal interest from Russian president Vladimir Putin only helped, but the fact is clear: More producers are learning to control and match budgets to potential results, so that quality product can once again stand a chance of breaking even — or making money.

Tom Birchenough

POLAND

In 2003, 22 million people went to the movies in Poland, 15% fewer than the previous year.

Despite multiplex buildout, the country is still mired in recession, and unemployment is high.

American blockbusters distributed by Warner Bros. occupy the first four places on the Polish list of B.O. hits: “LOTR: The Two Towers,” “Matrix Reloaded” “Harry Potter” and “Matrix Revolutions.” “Bruce Almighty,” “Chicago” and “Nemo” were also boffo.

After several years of local Polish hits, the U.S. regained its place at the wickets, scooping up 80% of B.O. grosses.

For European movies, a good result was 30,000-40,000 tickets sold. Some 860,000 folks went to see local fave “When the Sun Was God,” enough for the pic to place in the top 10.

But it wasn’t quite enough.

The producers of this film did not manage to pay off the bank loan, and investors haven’t seen a return on their money. (“When the Sun Was God” needed 1.5 million viewers to make back the bank loan.)

“Quo Vadis” the year before did not pay off its loan, either.

These failures spell trouble, as bankers are now reluctant to make such loans for expensive local fare.

On the other hand, modest films made by young directors are doing quite well.

Among 18 Polish titles in 2003, seven boasted more than 100,000 admissions. Their budgets are so low ($50,000 is typical) that some of them can pay back their investors.

In 2004, hardtops are counting the most on “Harry Potter 3” and “LOTR 3.”

Barbara Hollender

CZECH REPUBLIC

A wealth of commercially and critically successful Czech films are driving the 2003 Czech theatrical boom.

B.O. was on target to crack the 1 billion crown ($40 million) mark by the end of 2003, a 13% increase over 2002’s record year. Equally impressive was a 12% rise in admissions, bringing the average attendance to 1.2 annual visits to the cinema.

While that may be a far cry from the golden days before commercial TV invaded Eastern Europe, compare the Czech Republic with neighboring Slovakia: There, admissions fell by nearly 6%, to a 0.5 per person rate of attendance.

“It’s absolutely clear,” Bonton Film distributor Ales Danielis tells Variety. “The difference between here and the rest of Europe is Czech films.”

Led by “Pupendo” (Jan Hrebejk’s black comedy follow-up to his Oscar-nommed “Divided We Fall”), which hit 1 million admissions at year’s end (one in every 10 Czechs), six Czech films will have spots in the top 15 releases of 2003.

They include David Ondricek’s “One Hand Doesn’t Clap” and Ondrej Trojan’s Oscar entry “Zelary.”

The usual Hollywood franchises showed up in second, third and fourth places: “LOTR: The Two Towers,” “Matrix Reloaded” and the second installment of “Harry Potter.”

New multiplex expansion, which accounted for 2002’s growth, was minimal. Just one multiplex opened in 2003, and none is expected to open in 2004.

That leaves distributors worried about recently announced cuts in film funding.

Czech TV, which is normally a primary source of funds for local filmmakers, has put co-production on hold for at least six months.

“I’m concerned,” WB Czech Republic general manager Ladislav Stastny says.

WB distributes “Smart Philip,” directed by former Barrandov film studio CEO Vaclav Marhoul, which held on to second place at the B.O. in its second week.

The film is one of the first of a new wave of acquisitions by WB — an acknowledgement of the commercial potential of Czech films.

But distribution money normally comes at the end of the funding process.

“The situation is very dangerous,” Danielis says. “It will have a very bad influence (in 2004), and it can be very drastic in 2005.”

Distributors, who earn some 30% of B.O. from Czech films, are willing to help rescue the filmmakers. While there has been a minimal surcharge on tickets that goes toward a film fund, the formerly reluctant distributors are now ready to accept an increase.

“Let’s say we’re not lobbying against it,” Danielis says. “But we can’t replace the money from Czech TV.”

Cathy Meils

MEXICO

Simply put, 2003 was a lousy year at the Mexican B.O.

In January 2003, ticket prices soared — and attendance proceeded to plummet, to the surprise of no one but exhibitors. The latter busied themselves erecting a record number of screens around the country.

Hollywood studios tried to take advantage of the situation, but even their massive marketing budgets gave Tinseltown only a marginally greater piece of a smaller pie.

The figures look bad for everybody — the Hollywood majors, the indies, the local film students hawking microbudget pics billed to dad’s MasterCard.

Overall, ticket sales in Mexico fell 11% to 134 million tickets, from 152 million in 2002.

The year’s top film, “Finding Nemo,” brought in a seemingly respectable $19.2 million, until compared with 2002’s smash, “Spider-Man,” which set an all-time Mexican record of $31.3 million.

Indeed, “Nemo” would have been a fourth-place finisher here if it had bowed a year earlier.

The scariest figure of all, at least as far as homegrown production is concerned, is this: While Mexican movie bows nearly doubled, to 28 pics from 15 the previous year, their share of total B.O. fell by nearly half, to an anemic 5%, from 9% in 2002.

The top-grossing Mexican pic in 2003, “Nicotina,” would come in a distant fifth place in the category if it had bowed in 2002.

“Unfortunately, 2003 was one of the most difficult years for the cinema industry in Mexico in the last eight years,” says Miguel Angel Davila, managing director of Cinemex, the nation’s second-largest exhib and the leader in the huge Mexico City market, where attendance fell further than in the rest of the country.

Davila blames poor attendance on the economy, the weather, piracy, bad movies — and most importantly on rising ticket prices, which he claims were due to a 1 peso-per-ticket tax imposed as of Jan. 1, 2003.

He does not explain, however, how a 1 peso tax destined to help Mexican production was converted to a 3 to 4 peso price hike, roughly 10%, by most exhibitors.

Despite these worrying figures, Mexico’s exhibitors, led by Cinemex and rival Cinepolis, built an eye-popping 220 screens last year. They plan to build that many more in 2004 and expand into Guatemala, Costa Rica and Panama.

The good news: Mexico’s top four exhibitors, which control 86% of the market, all announced they would not be raising prices in January, the first time that’s happened in years.

Ken Bensinger

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