Monday, March 19, 2007

Movie Box Office Is Exploding

Hollywood is getting off to a great start at the box office, when Jan through March is usually a dead zone. "300" has grossed $125 million and could hit $175 to $200 million. John Travolta's "Wild Hogs" is over $100 mil and should hit $150 mil. Nicolas Cage's "Ghost Rider" cost a hefty $120 mil, but for a movie they effectively dumped, it's going to make about $125 million and went from an expected flop to a movie that will bring a profit. I'm not sure how the budget works out for "Norbit," but it is just a shade under $100 mil. And "Bridge To Terabithia" is a definite word of mouth hit at $75 mil for a no-stars family flick. "Music and Lyrics" is just at about $50 mil, another movie that opened so-so but had good word of mouth and can now expect to be profitable thanks to a good run and presumably strong DVD sales. So, we've already got three $100 mil+ hits, and break-out indie flick with "Terabithia" and a solid Eddie Murphy grosser. That's a lot of success stories so early in 2007.

It all reminds me of a story that slipped by while I was away. The head of the MPAA addressed ShoWest and banged the drum for how successful movies have been. Don't believe anyone who tells you movies are struggling because of some year-to-year comparison or rising budgets. It doesn't get simpler than this look at admissions:

The 1970s -- 980 million admissions average per year
The 1980s -- 1.1 billion admissions average per year
The 1990s -- 1.3 billion admissions average per year
The 2000s -- 1.5 billion admissions average per year

Did you catch that? Decade by decade, movie admissions have steadily increased, with the 2000s averaging 50% more tickets sold than in the 70s. How can anyone think movies are in trouble? Usually because they're stupid or compare one year to a previous year. Even if the previous year set all sorts of records, they think it's a disaster if the movies don't ALWAYS gross more than the year before. That should be impossible. But the simple truth is that in the long term the business HAS been growing steadily, decade by decade.

Now here's something more to keep in mind. In the 70s, the overseas box office was often far less than the box office here, even for blockbusters, and it was usually an afterthought. In the 70s, Hollywood studios made NOTHING from VHS sales or rentals and sales to cable were just beginning to bring in tiny amounts. Now the studios often make more money overseas than they do at the US with a lot more room for growth in China and elsewhere. Studios also gross TWICE AS MUCH MONEY from DVDs as they do at the US box office. You can also throw in worldwide sales to cable and satellite channels, pay per view, online downloads and on and on. Movies are a MUCH bigger business today than they were in the 70s. People go to the movies more often and spend much more money on them. It's a $50 billion business (easily) rather than the $5 billion annual box office you might have seen in the Seventies. Do movies cost a lot more to make and market? They should: they're bringing in a lot more money.

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