Anyone who has attended an industry trade show this year or has taken even a cursory look at international box office grosses has undoubtedly noticed the increase in revenue being generated in two countries; China and Russia. It’s no secret that the cinema market in both of these territories is on the rise as each goes through their own multiplex boom. While researching a piece on international box office for the July issue of Boxoffice Magazine I was told by Veronika Kwan-Rubinek, President of International Distribution for Warner Bros., “Russia has been the single biggest growth story in the last decade, and China will be the biggest growth market looking ahead.”

I wouldn’t be surprised if Russia continued to be a growth story for some time to come. That’s precisely the subject of a recent IHS Screen Digest report authored by David Hancock. Some of the highlights from the report include:

• Record box office in Russia surpassing the USD $1 billion in 2010
• The market has 2,430 screens of which 297 were added in 2010 – the strongest growth in the last five years
• Over 30% of all the screens in Russia are in Moscow and St. Petersburg
• Of the 941 digital screens in Russia, 95% are capable of showing 3D

Of course, the IHS Screen Digest report contains enough facts and figures to prove the point ten times over, certainly more than can be recounted here. Suffice to say, Russia is now a market that is so important that Paramount held the world premiere of “Transformers 3: Dark of the Moon” in Moscow on June 23rd.

If there is any doubt over the rise of the Russian cinema market, check out some of these figures:

• In late April “Fast Five” opened to USD $11.7 million the same weekend “Thor” opened to USD $5 million.
• “Rio” opened to USD $9.27 million.
• “Pirates of the Caribbean: On Stranger Tides” has taken in USD $60 million, barely finishing second to Japan as that film’s top international territory.
• “Kung Fu Panda 2” opened to USD $15 million.

When one remembers that there are only 2,430 screens in the entire country, those grosses become even more impressive, or as they say in Russia, ????????????.

Did anyone hear that loud “whooshing” sound this past weekend? If so, don’t be alarmed. It was just the collective sigh of relief coming from dozens of studio executives upon seeing the weekend’s enormous box office receipts.

The summer movie season started off with a bang here in the United States thanks to the highest grossing Memorial Day weekend of all time. More than USD $277 million was earned by the top 50 motion pictures playing around the country. Sequels led the day with “The Hangover Part II” pocketing USD $85 million, “Kung Fu Panda 2″ chopping away an additional USD $47.6 million and “Pirates of the Caribbean: On Stranger Tides” walking off with an additional USD $39.8 million.

While I was glad to see the industry rebound from receipts and attendance that were down upwards of 17% and 18% respectively over 2010 figures, I couldn’t help but feel a little skeptical upon seeing the news. Maybe I’ve just grown ambivalent to reading about bar setting box office results that are filled with qualifiers. For instance, the following sentence is from a Box Office Mojo story from this past weekend:

Playing on approximately 6,700 screens at 3,615 locations,”The Hangover Part II” delivered the top-grossing weekend ever ($85.9 million Friday-to-Sunday) for a live-action comedy, and it ranked second to “The Matrix Reloaded” among R-rated movies.

I’m not sure when the industry became so jaded that a praiseworthy USD $85.9 million dollar opening weekend needed to be puffed up further with adjectives like “top-grossing”. Especially when such adjectives have to be qualified with yet another hyphenated descriptor, “live-action comedy”.

Not sure if the bit about “The Matrix Reloaded” adds any value either. Ratings aside, “The Matrix Reloaded” only made USD $6.4 million more than “The Hangover Part II” in its opening weekend. That’s a small difference of 6.35%. But when one takes into account that ticket prices were nearly 30% lower when “The Matrix Reloaded” was released in 2003, that means “The Hangover Part II” actually had 28% fewer audience members. Translation – even inflation couldn’t help launch “The Hangover” into first place because fewer people are attending movies.

Every time I read box office coverage that strains to turn the latest batch of receipts into some obscure industry shattering number I can’t help but think of how sportscaster Bob Costas lamented over all the records broken during Major League Baseball’s steroid era, referring to all those drug enhanced performances as historically meaningless.

Please don’t get me wrong. I’m ecstatic to see movies making enormous, healthy box office grosses. After all I work in this industry too. I would prefer however that such returns came on the back of an increased trend in moviegoing. Now that would be news worth reporting with a few extra adjectives.

North America wasn’t the only territory to break box office records in 2009. In reviewing the backlog of posts I’ve been wanting to get to, I came across an announcement from the Asociace Producentu V Audiovizi a.k.a. Czech Audiovisual Producer’s Association (APA) which reported the country reached record box office and attendance during 2009.

Attendance reached 12.4 million moviegoers generating CZK 1.25 billion crowns (EUR €50.4 million or USD $70.32 million) in ticket sales according to the APA. The final box office was up CZK 31 million crowns over 2008 when grosses amounted to CZK 1.20 K? billion crowns (EUR €46.3 million or USD $64.60 million). What’s impressive about this figure is that the average ticket price in the Czech Republic is only CZK 100.3 crowns (EUR €4.1 or USD $5.72).

Most of the Czech box office (87 percent) came from multiplexes were moviegoers favored homegrown content over foreign productions. Four Czech films were among top 10 grossers of 2009. They include the most successful title of the year “Líbáš jako Buh” (“You Kiss Like A God”) by director Marie Polednáková which earned CZK 90 million (€3.6 million or USD $5 million) from more than one million viewers. It should come as no surprise to find 3D Hollywood blockbusters such as “Avatar” and “Ice Age 3″ among the top finishers as well.

Pavel Strnad, a Czech producer and Chariman of the APA was happy to see that the world’s financial woes didn’t affect the countries box office or attendance:

“Although we counted on the global economic crisis and the possibility that Czech film fans would save their money instead of spend it on entertainment in cinema, the reality is fortunately different.”

Sooner or later it was bound to happen. After all, 3D movies have topped the North American box office for nine out of 13 weeks this year. And 3D films like “Avatar” and “Alice In Wonderland” have generated record breaking grosses, far beyond industry expectations. With more and more moviegoers showing up for 3D content, it should come as no surprise that at some point the public, not to mention the media, was going to start noticing the extra USD $3 they were forced to pay for the latest multi-dimensional blockbuster. In fact, after this past week the industry may begin to face some consumer backlash at the 3D surcharge, especially since a handful of large U.S. theatre chains raised 3D and 3D Imax ticket prices as much as 26% in some locations.

We’ll get to a few reasons as to why exhibitors might be raising ticket prices during an economic recession and what it might mean for the industry as a whole before the end of this post, but first lets go over the history of this recent increase.

Lauren A.E. Shuker and Ethan Smith of the Wall Street Journal were the first to report the price hikes on Wednesday, causing a rash of similar news stories to surface by Friday. The original source of the news about price increases came from a research report released on Wednesday by Richard Greenfield, a media analyst for BTIG, an institutional brokerage and financial services company.

Mr. Greenfield surveyed 10 random theatres in major cities throughout the U.S. and found that on average 2D adult ticket prices rose 4.1% (USD $0.42), 3D non-Imax adult ticket prices increased 8.3% (USD $1.13) and 3D Imax adult tickets were up 9.9% (USD $1.50). Most of the new prices, which varied by theatre took affect on Friday, just in time for the release of Dreamworks Animation’s “How To Train Your Dragon”. 

The most eyebrow raising price hike in BTIG’s report was a whopping USD $3.00 at an AMC in New York City’s Kips Bay where the cost of a 3D Imax ticket went from an already hefty USD $16.50 to an wallet busting USD $19.50. In Danvers, Massachusetts 3D Imax tickets also rose USD $3.00 from USD $14.50 to USD $17.50. That’s 20% for those who don’t want to do the math.

And to think, just a week earlier at ShoWest in Las Vegas John Fithian, the head of the National Association of Theatre Owners (NATO) and Dan Glickman, the outgoing chief of the Motion Picture Association of America (MPAA) were telling the industry during their keynote speeches how affordable movies were as a form of entertainment. Though can you imagine taking a family of four to see a 3D non-Imax film in Kips Bay? You’d be out USD $63 before you even spied the concession stand.

Last year North American box office was up 10% and most of that increase can be attributed to increased attendance at 3D films, which accounted for 11% of ticket sales in 2009. In 2008, 3D movie ticket sales barely made it past 2%. This year, ticket sale and box office continue to rise – up 8.8% so far

So with audiences cramming into the estimated 3,600 theatres that can show 3D movies in the U.S. exhibitors may have felt ticket prices were too low and that they might be able to squeeze another dollar or two out of patrons. They may also be playing with fire when it comes to engendering themselves to customers. Dan Fellman, Warner Bros.’ president of domestic distribution told the Wall Street Journal:

“Sure, it’s a risky move, but so far charging a $3 or $4 premium has had no effect on consumers whatsoever, so I’m in favor of this experiment to raise prices even more. There may be additional revenue to earn here.”

At least that’s the way Fellman felt late last week before Dreamworks Animiation’s 3D film “How To Train Your Dragon” opened to a modest USD $43.3 milion in North America, 27% lower than the studio’s previous 3D animated release, “Monsters vs. Aliens” which opened over the same weekend a year earlier to USD $59.3 million. To be sure, there are a number of extenuating variables that could have caused for “Dragon’s” lower opening weekend, though studying the raw numbers could prove to be an interesting Economics 101 case study.

“Dragon” opened on 638 more 3D screens than “Monsters vs. Aliens” did in 2009 and 3D showings made up 68% of “Dragon’s” debut gross rather than 56% of “Monster’s”. (Both “Avatar” and “Alice In Wonderland” took 80% of their revenue from 3D showings.) Thanks to increased 3D ticket prices these numbers are misleading at best. When “Monsters vs. Aliens” the average U.S. ticket price was USD $9.29, but for “Dragon” it jumped to USD $11.61. Not only was the box office gross higher for “Monsters” but so was the estimated attendance; 6.4 million versus 3.7 million for “Dragon”.

Other than an endless string of numbers and statistics, what does this mean? Well, it’s quite simple really. In his 1890 book “Principals of Economics” Alfred Marshall detailed the groundwork of supply and demand wherein price functions to set the quantity demanded by consumers and ultimately the quantity supplied by producers. Put another way, a higher ticket price will mean fewer moviegoers demanding tickets. To hammer the point home and add a little perspective, in 2001 when the average ticket price was USD $5.65 Dreamworks animated hit “Shrek” opened to USD $42.3 million which would mean an estimated attendance of 7.5 million. Nearly 10 years later, “Dragon” earned just over USD $1 million more than “Shrek” with ticket prices that are now more than twice what they were in 2001. This may account for why half as many people saw “Dragon” during its opening weekend than saw “Shrek” during its debut.

So then why are theatre owners raising ticket prices? Because what seems to be attracting audiences to movies like “Dragon” these days is the 3D technology. Showings of “Dragon” in 3D generated 65% higher box office revenue on average than 2D screenings. This is especially true of Imax 3D screens which earned more than four times the gross than 2D screens. Imax accounted for $5 million of “Dragon’s” weekend gross, roughly 12% of the total take and on par with what “Avatar” and “Alice In Wonderland” earned on Imax screens during their initial weekend.

The cost of installing 3D systems in theatres is surely one of the reasons exhibitors have raised ticket prices. This is also why ticket prices for Imax, which costs more to install, cost more than those for traditional 3D screens. That theatre owners must also pay a portion of their ticket sales back to Imax is another reason. Realistically though, raising ticket prices may have to do more with greed than anything else. What exhibitors may learn is that there was indeed a huge demand for tickets to see 3D films such as “Avatar” which was an event film made by one of the world’s most daring filmmakers, but in the end, just like with 2D titles, not all 3D movies are made alike nor will they perform the same.

In regards to the long-term prognosis for “Dragon”, it’s actually quite good. The film received glowing reviews and audiences who had seen the film gave the film an average rating of A when polled by CinemaScore. With kids out of school for spring break over the next three weeks, “Dragon” could have some staying power.

That is if Warner Bros.’ “Clash of the Titans”, which opens on Friday, doesn’t steal most of “Dargon’s” 3D screens. Based on preliminary tracking reports, “Clash of the Titans” is trending to what looks like a USD $65 – $70 million opening.

It’s fitting that on the eve of theatrical exhibition trade show Showest—and as DCIP claimed its long-awaited funding—Disney’s “Alice in Wonderland” topped the weekend box office during its second week in release and demonstrated the continued strength of 3D.
Alice earned an estimated $62 million, extending its domestic haul to $208.6 million, according to weekend box office figures announced Sunday by Rentrak and its Box Office Essentials theatrical box office data collection and analytical service.
Tim Burton’s fantasy played in 3,728 locations, and of course included a digital and Imax 3D release.
Many insiders believe this wildly successful start—Burton’s most successful do date—is t least in part due to the “Avatar effect.” And insiders suggest that 3D can account for roughly 80% of the “Alice” box office figures.
But “Alice” is not likely to benefit fully from this bump, as Dreamworks Animation’s “How To Train Your Dragon” is set to open March 26, taking the majority of the 3D screens. This of course is not a new concern, but it only becomes more pronounced as box office numbers climb to record heights and tentpole titles demonstrate staying power.
“Dragon” of course has a similar problem, with the opening of the 3D “Clash of the Titans” on April 2, when the industry will get its first look at a film entirely converted to 3D by Prime Focus.
“Alice” was lensed in 2D, and the live action scenes were converted to 3D by companies including In-Three and Legend Films. The film’s lead VFX house, Sony Picture Imageworks, handled the 3D conversion for the CG Wonderland environment that makes up the majority of the run time.
According to Rentrak estimates, the top five in the domestic market included the debuts of “Green Zone” with $14, 5 million, “She’s Out of My League” with $9.6 million, and “Remember Me” with $8.6 million. “Shutter Island” rounded out the top five with $8.1 million, giving the film a new domestic total of $108 million. “Avatar” continued to perform, earning an estimated $6.6 million, for a new domestic total of $730.3 million.

We all knew Summit’s “The Twilight Saga: New Moon” would have a huge opening. The question was just how huge.
Box Office Mojo answered this question with Sunday estimates that suggest a North American gross of $140.7 million, which would make it the third highest opening weekend of all time, behind “The Dark Knight” and “Spiderman 3.”

It also reports that “New Moon” now holds various records including highest opening day gross, with $72.7 million.

The third film in the Twilight saga, “Eclipse,” is slated to open June 30, 2010.

While the weekend belonged to the vampire romance, Box Office Mojo’s early estimates for additional debuts include: “The Blind Side,” $34.5 million; and “Planet 51,” $12.6 million.

Sunday estimates also show that “2012” climbed to $108.2 million in North America. Disney’s 3D “A Christmas Carol” sits at $79.8 million in its third weekend. And “Precious: Based on the Novel “Push” by Sapphire” earned $11 million in 629 locations—with a $17,500 per theatre average—for a new total of $21.4 million.

“Precious” has generated a lot of buzz as a likely best picture Oscar nominee. With awards season underway, we’ll be watching the box office numbers for “Precious” and other releases with Academy Awards potential.

Already one of the most anticipated film releases of 2009, it should come as no surprise that “Twilight Saga: New Moon” is setting all sorts of records, both at the box office and on Internet social networking sites.

According to Variety, the second installment in the “Twilight” franchise smashed the North American box office record for midnight showings by grossing $26.3 million when it screened on 3,514 screens Thursday evening (or more precisely Friday morning). The previous record of $22.2 million was set this past summer by “Harry Potter and the Half-Blood Prince”. On Thursday the Los Angeles Times was predicting the film would open in North America to over $90 million. Ben Fritz’s article points out that the first “Twilight” film had a significant box office drop off of 41% from Friday to Saturday in its opening weekend and a similar decline is expected this time around.

Spurring such wild daily swings of the box office is moviegoers use of Internet social networking sites such as Facebook and Twitter. On Wednesday 81,000 messages were posted to Twitter and “New Moon” was the top trending topic on the site on Thursday evening and Friday.     Mashable has a post this morning detailing what people are saying about the film in their online conversations. They pull their information from a quick study put together by Crimson Hexagon, a company that analyzes social networking trends. Below is a chart measuring 4500 tweets, as Twitter postings are called, referencing the film:

Apparently the stars are to blame for not delivering more hits this summer, which appropriately enough finished this past weekend with the star-less sci fi film District 9 taking the top spot. Not that it was a bad summer, since early reports indicate that there is a year-on-year increase for 2009 so far. It is just that the hits were not delivered by the actors with $20m pay packets, according to the New York Times:

The gradual trend away from big-star vehicles in the summer has been under way for years.

At the start of the decade, summer still belonged to names: Cruise (“Mission Impossible II”), Crowe (“Gladiator”) and Clooney (“The Perfect Storm”) were the top three in 2000. But the three biggest films of this summer season, a crucial period from May 1 to Labor Day that typically accounts for 40 percent of annual ticket sales, have been “Transformers: Revenge of the Fallen,” “Up” and “Harry Potter and the Half-Blood Prince.”

The fading ability of Hollywood stars to command box-office attention, and why that is happening, has been a perennial topic in Hollywood. And economists and academics have long argued that marquee names are not worth their expense.

The biggest names attached to those films: Shia LaBoeuf, Ed Asner and Daniel Radcliffe.

So are the studios going to stop using stars? No, they will simply ask them to take a pay cut as they always have. And further into the article the blame falls on social networking and Twitter – as discussed below.

The Peter Jackson-produced scifi release “District 9” from TriStar debuted in the North American box office’s top spot this weekend, with an estimated $37 million.
In its second week, Paramount’s “G.I. Joe: Rise of the Cobra” was behind it with an estimated $22.5 million; and Warner Bros.’ “The Time Traveler’s Wife” debuted at number three with an estimated $19.2 million.
Another debut in the North American box office this weekend was animation great Hayao Miyazaki’s magical “Ponyo,” released this weekend by Buena Vista, which played in 927 theaters and earned an estimated $3.5 million.
Sunday estimates also suggest that Disney’s “G-Force” added $6.9 million to its gross for a new total of $99 million.
As the 3D guinea pigs of “G-Force” approach $100 million, the final 3D movies of the summer are about to open. Disney’s sports feature “X Games 3D: The Movie” debuts on Aug. 21, followed by Warner Bros./New Line’s thriller “The Final Destination” on Aug. 28.
There are a little more than 1600 3D ready d-cinema theaters in North America and that count has been a factor to watch all summer. Disney’s “Up” surrendered most of its 3D-ready theaters on the weekend that the next 3D release, Fox’s “Ice Age: Dawn of the Dinosaurs” opened. And “Ice Age” did the same when “G-Force” debuted. North American theater owners charge a premium of roughly $2 to see a movie in 3D.

Paramount’s big budget “G.I. Joe: Rise of the Cobra” opened with an estimated $56.2 million in the North American box office this weekend, giving it the top spot. Sony’s debut “Julie and Julia” finished second with $20.1 million.
Disney and Jerry Bruckheimer’s live action/CGI “G-Force”—a digital 3D release—finished third in its third week with an estimated $9.8 million, bringing its estimated domestic total to $86.1 million.
Disney continues to hold the majority of the just over 1600 3D-ready digital cinema venues in the market, and estimates suggest that 3D accounts for more than half of the gross.
Estimates suggest that the weekend top five was rounded out by Warner Bros.’ “Harry Potter and the Half Blood Prince,” with $8.9 million and a total gross of $273.8 million; and Universal’s “Funny People” with nearly $7.9 million for a new total of $40.4 million.
There are a few more weeks to go before the final summer 3D releases arrive in theaters. Disney’s “X Games 3D: The Movie” opens Aug. 21, followed by Warner Bros./New Line’s “The Final Destination” on Aug. 28.
Meanwhile, Warner Bros. and Imax announced last week that “Under the Sea 3D” will be rereleased in select Imax theaters on Aug. 19.
Last February, “Under the Sea 3D” opened in 49 Imax theaters domestically and three locations internationally and has since grossed more than $15 million in worldwide box office. “Under the Sea 3D” follows 2006’s “Deep Sea 3D,” which has topped $80 million in worldwide box office receipts.