Box Office Blahs: Blame It on (Fill in the Blank)
Reasons for Slump Are Cinematic in Scope
By William Booth
Washington Post Staff Writer
Friday, December 30, 2005; C01

LOS ANGELES -- Hollywood ticket sales took a little swan dive in 2005. Why?
The consensus hypothesis appears to be that the movies were -- brace
yourselves -- not good.

The industry and its observers are also variously blaming DVDs, video games,
iPods, cellular phones, HBO, crying babies, $10 tickets, Chinese pirates,
big screen plasma TVs, an aging demographic, liberal bias, video-on-demand,
annoying pre-feature commercials and the Bush administration's energy

The Great Box Office Slump has been covered by the entertainment press with
a kind of giddy obsession ever since the summer proved
blockbuster-deficient. Each week, the prognosticators sought deeper meaning
in the weekend tallies for undercooked turkeys such as "Stealth" and "The
Legend of Zorro." There was hope in the Hollywood press that "King Kong"
might "save the day," but alas, the big ape has so far "disappointed," if it
is possible for a $66 million opening five-day gross to disappoint (which it
is, since Peter Jackson and Universal spent $220 million making the monkey

The year isn't quite over, but Hollywood will likely end 2005 having sold
about 1.4 billion tickets in the United States, which is a 6 percent
decrease from last year. Revenue at the box office is expected to reach
about $9 billion, trailing last year by 4 to 5 percent (the dip is slightly
less than it would have been otherwise because of rising ticket prices).

This would be no big deal, except it appears to be a trend -- this marks the
third consecutive year for declining attendance. And so the billion-dollar
question: Does this represent the beginning of a fundamental shift in the
moviegoing habits or was it just another off year in cyclical show business?

Not only are the studio suits and the pundits not sure what is behind the
box office drop, there is disagreement over its significance.

"It's not a little off. Six percent is a big number," says Brandon Gray,
founder of Box Office Mojo, an online movie publication and box office
tracking service. "And they've got a big problem." In the press, some Wall
Street analysts are using terms like "alarm" and "doom."

Not so, says Tom Rothman, the cheery chairman of 20th Century Fox, which had
a record-breaking year. Rothman describes the current clamor as "the great
over-hyped, over-exposed, over-reported box office decline." Rothman
believes there is no fundamental revolution occurring in the movie theater
business and that the year's totals were lower simply because a relative
handful of high-profile potential blockbusters did not perform to

Rothman insists that history is on his side. "They said sound was going to
kill the movies, that TV would, that home video would, that cable would,
that pay-per-view would. Every time -- the hand-wringing! The woe-is-me! And
instead what happened was, the pie gets bigger."

John Fithian, president of the National Association of Theatre Owners, a
trade organization representing 37,500 screens, also argues there is no
reason to panic. "It was a bit of a down year for theatergoing," he says.
"There's been bigger down years."

True, there was a 9 percent fall in ticket sales in 1980, a 12 percent
plunge in 1985 and a 6 percent drop in 1990.

"We're having another fabulous year," says Dan Fellman, president of
domestic distribution for Warner Bros. Pictures, whose studio business was
up 15 percent. "A lot of people are crying wolf early." Actually what
happened was that Fox and Warner Bros. had a great year, and "a couple of
guys had a tough year," Fellman says.

A couple of guys like Sony Pictures ("Stealth") and DreamWorks ("The

It is interesting that there is consensus that one big reason for the box
office slump was the films themselves. "If you make good movies, people go,"
says Rothman. "If you make crappy movies, they stay home."

Says Fithian of the theater association: "When the movies come back, the
patrons will come back . . . and the movies this year, unfortunately, were
only so-so."

Or were they?

Judging movie quality is an imperfect science, but Senh Duong, founder of
the Web site Rotten Tomatoes, ran the numbers for us. Rotten Tomatoes
tallies critical reviews of the movies and then rates the movies as either
"fresh" or "rotten." In 2005, Duong says, 44 percent of the movies in wide
release received positive reviews in the media (both print and online),
compared with 42 percent in 2004, 43 percent in 2003 and 45 percent in 2002.

"As you can see from the charts, quality-wise, it's pretty consistent with
previous years," Duong says. "So no, the movies this year don't smell much

Duong says that revenues might be off this year because the summer of 2005
only produced one breakaway blockbuster ("Star Wars: Episode III -- Revenge
of the Sith") and that sequels, though generally seen as creatively
uninteresting, pack the multiplexes; though the summer of '05 had plenty of
remakes (of TV shows such as "The Dukes of Hazzard" and "Bewitched") there
was really only one mega-sequel, and that was "Star Wars." (The other big
hits of the summer were "War of the Worlds" and "Batman Begins," which was
sorta prequelly.)

Of course, relying on the Tomatometer suggests that critics matter, which is
an idea many in Hollywood find quaint. Consider critical duds like "The
Longest Yard" (panned by reviewers but embraced by viewers, it grossed $158
million). Or "Fantastic Four" at $154 million. Or "The Pacifier" at $113

So when Hollywood studio heads and theater exhibitors talk about "bad
movies," what they really mean is movies that audiences don't pay to see.

It is a subtle point but worth remembering.

Of course, there might be more going on here than "bad movies."


Cost. The average American sees five movies a year. Fithian of the theater
owners association concedes that a top complaint from patrons is the price
of a ticket, which nationally averages about $6.50 but has now settled in at
$10 for adults in New York, Los Angeles and Washington. Studios and
exhibitors share the ticket price revenue; where the theater owners really
make their money is on popcorn, sodas, Jujyfruits and the like. When
moviegoers pay for all that, plus parking and babysitters, a movie date can
run $50, easy. Fithian counters that when compared with other two-hour
entertainments (like the ballet or a ballgame or a rock concert), movies are
still a bargain.

Gasoline. Harry Knowles, the founder of the movie Web site Ain't It Cool
News, has another idea. It is not the cost of the movie ticket that is
depressing box office. Or the quality of cinema. "The movies are fine," he
says. "It's George W. Bush's failed energy policy that is eating away at the
family entertainment budget because that extra $70 a month in gas is the
money that they would have spent on frivolous things like movies, except now
they don't have the money."

Liberals. Govindini Murty, co-director of the conservative Liberty Film
Festival, wrote in the Los Angeles Times that "Hollywood could turn things
around, but that might mean tolerating films with pro-conservative themes."
This theme is echoed by others who say that Hollywood makes too many
violent, nihilistic and sexually explicit films, and that is why people stay

The multiplex experience. Ringing cell phones, crying babies, loud talkers,
sticky floors and 20-minute-long commercial packages of advertisements.
Fithian says theater owners are concerned enough about the complaints that
they are planning to hire more ushers to shush rude patrons. As for the
commercials? The forecasting firm ZenithOptimedia expects that advertisers
will increase their buys in movie ad packages by 15 percent next year.

Couch potatoes. Bruce Feirstein wrote in the New York Observer that he knew
the home entertainment movement was about to take off when he saw that
Costco was selling lounge chairs with holders for popcorn and drinks.

DVDs. Everyone agrees there is more competition for eyeballs and ears than
ever, with video games, cable TV, video on demand, the Internet and DVDs
(and the high-definition units just around the corner). Some call DVDs
"movie killers," but Hollywood executives don't see it that way. DVDs have
been out for eight years, during which time movie box office has mostly
boomed. A strong theatrical release generally means stronger DVD sales, and
let's not forget that the studios now derive more than half their film
revenues from DVD releases. (Tangentially, it is important never to confuse
box office receipts with profitability; a movie that costs $220 million to
make has got to sell a lot more tickets than one that was shot for $22
million -- a fact always ignored in weekly box office roundups).

Most worrisome to theater owners is the prospect that Hollywood may close
the so-called "video window." Currently, there is a four-to-five-month lag
between theatrical release and DVD sales. This allows a movie to play at the
mall before being sold at the mall. If the release were simultaneous, or
nearly so, that could change the landscape.

At least one mogul plans to test the waters. Billionaire entertainment
impresario Mark Cuban believes that consumers should be able to watch a
movie in whatever format they like, whenever they like: on cable, DVD,
download or movie theater. And he plans to do just that next month when his
company releases on the same day, on DVD, digital cable and in theaters,
Steven Soderbergh's new movie, "Bubble." The film is a low-budget indie, so
this might be more of an experiment than a true test. But if the major
studios follow suit -- and Bob Iger of Disney has suggested he might be
interested in doing just that -- the future releases of "Mission: Impossible
7" or "Dodgeball 4" could challenge the moviegoing habit.
© 2005 The Washington Post Company

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