Box Office Blues: The Blockbusters That Weren't

The first few weeks of summer have been one disappointment after another for Hollywood. Why the blockbusters — and box office — are doing so poorly

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Warner Bros.

The cast of Sex and the City 2

In May, the first month of blockbuster summer movies, Hollywood brought out its big guns — sequels to Iron Man, Shrek and Sex and the City, plus the pricey action-adventures Robin Hood and Prince of Persia: The Sands of Time — and most of them turned out to be popguns. The month's total take was 11% below May 2009's in revenue and 19% down in attendance. Then last weekend, four more films opened: Get Him to the Greek, Killers, Marmaduke and Splice. They all "underperformed," in industry parlance, marking the first June weekend in five years that no new movie earned $20 million at the box office. The weekend gross dropped a parlous 28% from the same frame last year, despite a hefty rise in ticket prices.

All through the Great Recession, Hollywood enjoyed a relative boom. Last year the domestic box office — the revenue from movie theaters in the U.S. and Canada — exceeded $10 billion for the first time ever. Now the numbers look anorexic, big-budget films are flopping left and right, and studio bosses have begun wondering what has gone so horribly wrong. Is the recent downturn a blip in the business, or a harbinger of the end of America's long love affair with paying to see picture shows? Have audiences suddenly decided, "Moviegoing — that's so 2009"?

Ahh, 2009. Studio bosses stroke their three-day-bearded chins and sigh at the memory of that wonderful year. The summer season opened with a predictably profitable May menu of remakes (Star Trek), sequels (Night at the Museum: Battle of the Smithsonian), prequels (X-Men Origins: Wolverine) and Pixars (Up). Making money from familiar franchises is pleasing to Hollywood but not unexpected. Then, in early June, came the comedy smash The Hangover, which opened to $45 million and eventually took in $277 million on a $35 million budget. For the rest of 2009, the hits just kept on coming, often in surprise packages: a South African sci-fi parable (District 9), a strong-woman sports drama (The Blind Side) and an indie horror film (Paranormal Activity) that earned $150 million worldwide — 10,000 times its $15,000 budget. All those pictures, plus Avatar.

The gold rush continued through the first quarter of 2010, when James Cameron's eco-epic racked up most of its $749 million domestic take, the highest in film history. As soon as the Avatar avalanche abated, Tim Burton's Alice in Wonderland stormed in and soon joined Avatar as one of just six films to have earned more than $1 billion worldwide; for the first time ever, two films had crossed that magic threshold in the same year. Industry swamis predicted that 2010 would top the record haul of 2009, figuring that 1) Avatar gave the new year a great head start and 2) the rest of the year would naturally produce the same number of hits.

Hasn't happened so far. And June looks even worse than May, with only two inevitable hits — Toy Story 3 and Twilight: Eclipse — and a lot of romantic comedies and '80s retreads. Nor does the rest of the summer look so rosy for the industry. Instead of a reliable blockbuster like Transformers for the Fourth of July, we have M. Night Shyamalan's The Last Airbender, another stab at movie-izing a kids' TV show. Hollywood has learned the lesson that came too late to the wise guys on Wall Street: no industry is assured of ever rising profits. And at least for now, Hollywood has lost its audience-enticing mojo. Let's see why.

1. The Boom Wasn't All That Boomy
The five years from 2005 to 2009 showed remarkably consistent ticket sales, all in the range of 1.39 billion to 1.42 billion, according to movie-stats blog the Numbers. Indeed, in 2009 moviegoers bought no more tickets (1.42 billion) than they did in 1997; the 62% increase in box office revenue, from $6.51 billion to $10.65 billion, was entirely due to the gradual hike in prices. But the bust could be real: if current trends hold, the number of admissions this year will be 1.27 billion, the lowest since 1996. Historical note: None of the recent years comes anywhere near the 4 billion tickets sold in 1946, back before TV gave Americans a free, at-home option for watching entertainment. That's three times the tickets, when the U.S. population was half what it is today.

2. It's the Movies, Stupid
In the 1940s, filmgoing was a habit; the average person went three times a week. Today it's a habit for some — the under-25s, which is why Hollywood aims its product at them — but an event for most. The irregular attendee may scan the listings each week but won't necessarily go see anything. To get beyond the core audience, the studios must create something that is either new or better, at least by the industry's definition of quality. Who can explain why The Blind Side, the umpteenth sports-inspirational, or The Hangover, the 463rd rowdy-boys comedy, became such a megahit? Well, they did, and whatever that elusive essence, Hollywood hasn't been able to bottle it this year.

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