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 V.14 No.26 | June 30 - July 6, 2005 

Film News

Summer Slump

Summer movie season is in full swing, and the box office is broken down

The first serious sign of trouble, a dark disturbance in the Force, came in the third weekend of May. George Lucas' long-awaited final film in the Star Wars saga, Revenge of the Sith, debuted with record-breaking numbers. The film hauled in $158.4 million in its first week of release. The film's Friday-Sunday numbers ($108.4 million) made it the second biggest movie debut in history, right behind 2002's Spider-Man. ... And yet, it wasn't enough for the American box office to break its (then) 12-week slump.

That box office slump now stands at 18 weeks and counting, leaving Hollywood insiders, studio executives and theater managers wondering when this drought will end.

Assuming this trend continues, 2005 will go down as the first year since 1991 that the yearly box office has not increased. In fact, at the current rate--down about 7 percent from last year--2005 will feature the worst drop-off in profits since 1985.

So what is causing moviegoers to turn America's cineplexes into leftover sets from George A. Romero's Land of the Dead?

Hollywood has plenty of answers. First of all, it's those pesky pirates. People are downloading movies illegally from the Internet and refusing to pay for them at their local movie theater, says Hollywood. Although movie pirates are Hollywood's equivalent to Middle Eastern terrorists--a convenient scapegoat for all ills--the numbers simply don't bear this up. Few people have the expertise or the time to download lengthy, poor-quality video files from the Internet. Recent surveys have shown that people who download music from the Internet actually buy more CDs than the average consumer. It doesn't take too much imagination to assume that many who have downloaded films from Internet file-sharing sites--let's say that Russian version of Star Wars, Episode 3--are hardcore fans who have already paid to see the film in theaters and will purchase a good quality DVD when one becomes available.

And yet, Hollywood still devotes countless misplaced man-hours to fighting piracy. Director Steven Spielberg, for example, had his cell phone confiscated by security at the War of the Worlds premiere last week. Good for you Paramount: One more dirty pirate off the streets.

Hollywood also blames the shorter and shorter period between a film's theatrical release and its debut on DVD. Well, Hollywood has no one to blame but itself for that little conundrum. Increasingly, Hollywood studios have been reliant on that big “opening weekend” box office to pay for films that now cost an average of $70 million to make. A film can rake in $50 million or more on its opening weekend. After that--once reviews and word-of-mouth get around--the studios are free to dump the film and jam another in its place.

Now, the DVD market is suffering from those same “opening weekend” blues. Video retailers recently complained about major overstocks on DreamWorks' theatrical hit Shrek 2. The DVD moved 12 million units in its first weekend, then dropped off precipitously when the studio abandoned its advertising push the very next week.

Studios complain that the DVD market is drawing business away from movie theaters. Viewers would rather spend $15 on a DVD that the whole family can watch at home than spend $10 per ticket at some dirty, loud, overcrowded, understaffed movie theater. Again, if this is true, the industry has no one to blame but itself. And the weakest end of this argument is that Hollywood is making tons more money on DVDs and slightly less money in movie theaters. Shrek 2 made $108 million its first weekend in theaters and $185 million its first weekend on DVD. Just like theatrical releases, DVDs are now generating 50 to 70 percent of their total profit in the first weekend of release.

Those on the other side of the industry, the viewers, probably have a very different perspective on what's causing the slump: Hollywood itself. If the theaters aren't packed with movies people want to see, they simply aren't going to show up. Even eagerly awaited films like the new Star Wars seem to be having a detrimental effect on the box office. Though hardcore fans packed the theater that first week with their light sabers and Anakin costumes, average filmgoers stayed away in droves.

A big summer blockbuster tends to have “spillover” effect for the other films in release. If the big film is sold out, people will go see another film, raising the overall box office. The weekend Revenge of the Sith opened with $108 million, all the other films in the top ten combined barely cleared $75 million.

This week's preprogrammed blockbuster War of the Worlds is poised to become the season's fifth $100 million smash. But experts predict a continued chill at the box office lasting well into the release of Fantastic Four.

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