Alarm bells for Hollywood

From the first weekend in May to Labor Day, a period that typically accounts for 40 per cent of the film industry’s annual ticket sales, domestic box-office revenue is projected to total $4.38 billion, an increase from last year of less than one per cent, according to Hollywood.com, which compiles box-office data.

The bad news: higher ticket prices, especially for the 18 films released in 3-D, drove the increase. Attendance for the period is projected to total about 543 million, the lowest tally since the summer of 1997, when 540 million people turned up.

Hollywood has now experienced four consecutive summers of eroding attendance, a cause for alarm for both studios and the publicly traded theatre chains. One or two soft years can be dismissed as an aberration; four signal real trouble.

But there was a silver lining. Harry Potter and the Deathly Hallows — Part 2, Transformers: Dark of the Moon and a spate of superhero films, including Captain America: The First Avenger and Thor, generated enough interest to reduce the box-office hole created by winter flops like Mars Needs Moms.

After the first quarter, ticket sales were down a staggering 20 per cent compared with the same period in 2010. Sales lag four per cent for the year. “In an economy that has been unfortunately pretty depressing, the marketplace expanded to accommodate big pictures stacked back to back,” said Dan Fellman, president for domestic distribution at Warner Brothers.

The studio, owned by Time Warner, released two of North America’s top three summer movies. Its final Harry Potter installment was No. 1 with about $375 million in ticket sales and The Hangover Part II, which took in over $254 million, was third. Transformers: Dark of the Moon, released by Paramount, a division of Viacom, was second with about $350 million in sales.

On a global basis, three movies took in more than $1 billion, the industry’s new threshold of smash success. Those films were Deathly Hallows — Part 2, Dark of the Moon and Walt Disney’s Pirates of the Caribbean: On Stranger Tides.

However, the old Hollywood power source — star wattage — continued to dim. Audiences still turned out for Johnny Depp in the Pirates series, but stars otherwise failed to draw crowds.

Julia Roberts and Tom Hanks flamed out Larry Crowne. Jim Carrey, who almost seems to be adopting a creepy public persona of late, flopped in Mr. Popper’s Penguins. Harrison Ford and Daniel Craig fell off their box-office horses in Cowboys & Aliens. The careers of Kevin James (Zookeeper) and Ryan Reynolds (Green Lantern) also cooled off.

Three movie companies managed to breathe life into aging or moribund franchises or seed new ones — Hollywood’s equivalent of home runs. Marvel Studios, a division of Disney, already has sequels to Thor and Captain America in the works, while Sony’s movie studio has moved a follow-up to The Smurfs, which came out of nowhere to sell over $132 million in tickets in North America.

Efforts by 20th Century Fox, owned by the News Corporation, to restart its X-Men and Planet of the Apes franchises were particularly impressive. Fox took creative risks with X-Men: First Class and Rise of the Planet of the Apes, and it was rewarded with hits that will spawn sequels.

“The lesson for us is that different and original is always hard and always a risk but has great upside,” said Tom Rothman, co-chairman of Fox Filmed Entertainment. “While both of those films had genetic material in common with their original franchises, both were very, very original pieces.” Notably, First Class and Rise received some of the summer’s best reviews.

Though the US remains the world’s largest movie market, one of the summer’s lessons centres on the growing importance of overseas ticket sales. Several films — including Stranger Tides, Kung Fu Panda 2 from DreamWorks Animation, and Disney-Pixar’s Cars 2 — disappointed at home, but generated big returns internationally.

This phenomenon helps explain why studios keep churning out bland sequels despite an erosion of interest in them at home; fatigue does not set in as fast internationally, in part because moviegoing in many foreign countries is less of a habit, studio executives say.

Stranger Tides, for example, took in almost $70 million less in North America than its 2007 predecessor, Pirates of the Caribbean: At World’s End. But Stranger Tides took in $145 million more than At World’s End overseas. “America used to set the course — if a movie disappointed here, then it was done,” said Phil Contrino, editor of BoxOffice.com. “That’s simply not the case anymore. America is just another territory now.”

Amid all of the special effects and computer animation, two old-fashioned films aimed at adults turned in impressive results. The Help, a DreamWorks Studios adaptation of a best-selling novel, has ridden strong reviews to $122 million in ticket sales and counting.

Earlier in the summer, Midnight in Paris, distributed by Sony Pictures Classics, became an outsize hit for Woody Allen, selling $53 million in tickets. “It’s always kind of funny to see Hollywood surprised that movies aimed at adults succeed in the summer,” said Contrino of BoxOffice.com. “If you don’t feed them garbage — surprise — they buy tickets.”