The 3-D Pileup: Too Many Movies, Not Enough Screens

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Cash of the Titans
The rush to 3-D began in earnest early last year, with much tub-thumping about how A-list directors like Steven Spielberg and James Cameron were testing the format. The box office verified that interest: four of the top dozen domestic hits of 2009 were shown in 3-D. Three were animated features: Up, Monsters vs Aliens and Ice Age: Dawn of the Dinosaurs. The fourth film: Avatar. James Cameron's eco-epic, which quickly became the No. 1 moneymaker in movie history, proved a couple of things about 3-D. In the right hands, the technology was an amazingly supple tool, allowing film people to create worlds that were both fantastic and convincing. And it lured audiences with the notion of a special experience, a true movie "event."

Oh, one other item: Avatar demonstrated that 3-D could bring studios gigantic bundles of cash. For ages, the rule of movie exhibition has been that customers pay the same price for a movie that cost $250 million to make (say, Harry Potter and the Half-Blood Prince) as for one that cost $15,000 (Paranormal Activity). But 3-D changes all that. You can charge audiences the moon to see a 3-D movie, and if you show it, they will come. The extra cost of making a movie in the format, or of jerry-building 3-D effects on a picture shot in the standard two dimensions, is perhaps 10% to 20% of the budget. A ticket for How to Train Your Dragon costs $12.50 in 2-D at a Manhattan movie house. For 3-D, it's $17.50 — a 40% surcharge. For the 3-D IMAX version, $19.50, or 56% higher. The better news for studios: many of the Friday and Saturday screenings are already sold out.

The best news, for studios and exhibitors: the prices keep rising. This weekend, according to a study by BTIG analyst Richard Greenfield that was reported in the L.A. Times, U.S. ticket prices for 3-D films will be hiked an average 8%, IMAX prices will balloon 10% for adults and 12% for children, and 2-D tickets will cost 4% more for adults and 3% more for kids. A 3-D IMAX movie night for a family of four, with tickets ordered over an Internet site like Fandango that charges a booking fee, can run from $60 to $75 before the family even gets to the concession stand. For all of this, you can thank Cameron — and Tim Burton, who directed Alice in Wonderland, not to mention the mass audience's compulsion to see the big new movies in the big hot format.

"Avatar was a game changer," says Bock, "but so was Alice in Wonderland. People were expecting it to do $65 [million] to $70 million [its first weekend], but then it goes and does $116 million, which is something almost unseen outside a traditional Hollywood blockbuster. So now that's something that every studio has to consider: How can you find the right window to match that sort of performance? It's a change in paradigm. You not only have to look at your weekend, but you have to look at surrounding weekends, because you need control of the most 3-D screens." Alice in Wonderland, Bock notes, opened on a weekend with little new competition and, except for Avatar, no other 3-D movie around. "So now the focus is, We've gotta make sure we get 3,500 screens for two or three weeks straight."

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