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2013 Was a Schizophrenic Year at the Box Office

Box office saw big successes, big failures and a glimmer of tolerance between studios and exhibitors

The domestic box office haul of 2013, which observers estimate will eclipse last year’s record $10.8 billion tally, is part of a schizophrenic 12-month period punctuated by supersized hits like “Iron Man 3,” “The Hunger Games: Catching Fire” and “The Hobbit: The Desolation of Smaug,” as well as disastrous misses such as “After Earth,” “Lone Ranger” and “R.I.P.D.”

The high-stakes tentpole game has never been more perilous for studios, which are grappling with how to monetize new revenue streams even as they try to manage established — and often strained — relations with exhibitors.

But for all the talk of box office becoming a 52-week game, industry players still have plenty of bad habits that need breaking. “If you’ve got too many movies aiming for the same audience, something has got to give,” says Patrick Corcoran, VP and chief communications officer for the National Assn. of Theatre Owners.

For exhibitors, attendance is the most important gauge of industry health, and similar to box office, admissions are expected to see another year-over-year improvement. Corcoran says a diverse slate spread more evenly throughout the calendar is key — as was made painfully obvious this summer, when even some of the most successful films, like “World War Z” and “Man of Steel,” saw limited playability.

The beginning of the year also saw a dearth of adult-skewing fare, says Landmark Theatres head Ted Mundorff, adding that films based on real people (e.g., “Lee Daniels’ The Butler” — released mid-August) resonated with audiences throughout 2013.

Corcoran agrees on the positive effect of good release patterns. “Smart scheduling has helped us this year, and not-so-smart scheduling has really hurt,” he says. “ ‘Gravity’ was a big hit in October, but we could have used another film like that.”

The unexpected success of Warner Bros.’ sci-fi epic, largely a one-woman-show set in outer space, proves that Hollywood is still willing to take risks with bold original product. That said, the failure of such non-franchise fare as Universal’s aptly named “R.I.P.D.” and Disney’s “The Lone Ranger” suggests that studios have created a culture of sequel wannabes, making it ever more difficult for fresh content to break out.

“How you cut through the clutter with an original film has become a challenge,” says Megan Colligan, president of domestic marketing and distribution for Paramount. Colligan notes that a film’s theatrical success remains the benchmark for ancillary markets — and exhibs made significant compromises in 2013 to protect that release status.

Exhibitors still bristle at the idea of shrinking the theatrical window, as the growing digital presence looms to woo consumers. Irritation over the hot-button topic was aggravated last month when Netflix chief content officer Ted Sarandos delivered an industrywide bombshell, arguing for day-and-date digital distribution. Sarandos later backtracked, saying: “I wasn’t calling for day-and-date with Netflix. I was calling to move all the windows up to get closer to what the consumer wants.”

Even exhibitors are beginning to embrace that notion — at least in part.

“The realities are no different for us than for any other industry,” says Rolando Rodriguez, the former Rave Cinemas chief who was brought on this summer as president and CEO of Milwaukee-based Marcus Theatres. “We are a very capital-driven business, and you have to be willing to invest in what the consumers’ wants and needs are.”

Theater owners themselves are lobbying to make specialty films with limited platform releases available earlier on in regional cinemas.

While it’s impossible for studios to ignore the effectiveness of the platform release, as well as the prime potential of summer box office, Par’s Colligan sees new execs with new ideas among both studios and exhibs. “People have been doing unprecedented things to support each other’s businesses,” Colligan says. “That’s been a seismic shift. Nothing has been game-changing yet, but you can’t get there until you’ve taken risks.”

For example, studios are working with exhibitors on the innovative program Super Ticket, a theatrical/digital-download one-stop-shopping package that lets consumers buy a movie ticket along with the right to later buy a copy of the movie. “This has been the year for experimentation,” says the Par marketing chief. This summer, her studio partnered with AMC Theatres on a super-ticket package for “World War Z”; Warners is teaming with Regal for similar packaging on “The Hobbit” sequel.

Premium venues (especially Imax) have flourished thanks to fanboy fare and original effects-driven movies like “Gravity” and “Pacific Rim.” But other filmgoing options have been driving up attendance as well, including dine-in theaters or reclining seats.

AMC, currently in a quiet period due to its pending initial public offering, expanded its presence in the dine-in space to 25 domestic locations and counting. Marcus has four. Both circuits have retrofitted most of their premium theaters with reclining seats to encouraging results. For instance, while the installation of recliners in the AMC locations decreased seating capacity by 64%, attendance at those sites grew 84%, according to the company’s latest quarterly SEC filing.

“It’s the responsibility of both the film companies and exhibitors to continue to wow the consumer,” Rodriguez says. “We know what our responsibilities are as exhibitors to provide that unduplicated moviegoing experience.”

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