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.
]]>
Michael Bay’s “Transformers: Revenge of the Fallen” was the blockbuster that it was expected to be in its opening week. Meanwhile “Up” soared past “Star Trek” to become the new highest grossing film of the year—and underscores the challenges that this summer’s stereo releases face with a still limited number of 3D screens.We’ll start this week’s Box Office Review with the Autobots from Paramount/Dreamworks, which topped the North American box office this weekend with an estimated $112 million. Since opening June 24, it has earned an estimated total of $201.2 million in North America and $387.3 million worldwide.
The only other film to cross $200 million in North America in five days was “The Dark Knight,” which had a five-day total of nearly $203.8 million. As well, Bay’s latest is the biggest Wednesday opening with $60.6 million, passing 2007’s “Harry Potter and the Order of the Phoenix,” which debuted its magic on a Wednesday with $44. 2 million.
“Transformers: Revenge of the Fallen” looks poised to soon become the highest grossing film of the year in North America.
To that end, Disney/Pixar’s “Up” claimed that title this weekend, the film earned an estimated $13 million to finished fourth for the weekend and to reach a new North American total of roughly $250.2 million, passing leader “Star Trek,” with an estimated $246.2 million.
In its fifth week in release, “Up” continues to play on the majority of the roughly 2,000 3D ready screens in North America, but on Wednesday, July 1, Fox is about to deflate that number with the opening of its digital 3D release “Ice Age 3: Dawn of the Dinosaurs.” Box office numbers for both 3D movies will be something to watch next week.
Also this weekend in North America, estimates suggest that “The Proposal” finished second with $18.5 million for a new total of $69 million in its second week in release; Warner Bros.’s “The Hangover” earned $17.2 million for a total gross of $183.2 million, to finish third in its fourth week; and Warner’s “My Sister’s Keeper” opened at number five with $12 million. ]]>
Can a house lifted by thousands of helium balloons overtake the Starship Enterprise?With an estimated $21.3 million domestic gross in its fourth week in release, Disney/Pixar’s “Up” has brought its domestic total to an estimated $224.1 million.
“Up” is the year’s second highest grossing film. Paramount’s leader “Star Trek,” in its seventh week, added an estimated $4.7 million this weekend, raising it domestic total to an estimated $239. 4 million.
Dreamworks Animation’s 3D “Monsters Vs. Aliens” is the year’s third highest grossing film with an estimated $195.5 million.
“Up” still has the majority of the available 3D screens, although Fox/Blue Sky’s 3D “Ice Age 3: Dawn of the Dinosaurs” is slated to open on July 1.
The competition for the year’s highest grossing film will get more crowded on June 24 when Michael Bay’s “Transformers: Revenge of the Fallen” hits theaters.
This weekend Buena Vista’s romantic comedy “The Proposal” debuted at the top of the domestic box office with an estimated $34.1 million. That was followed by Warners’ “The Hangover” with an estimated $26.9 for a new domestic total of $152.9 million.
Sunday estimates suggest that “Up” finished third, and Sony’s new comedy release “Year One,” was just behind with $20.2 million. Rounding out the top five was Sony’s “The Taking of Pelham 1 2 3,” with an estimated $11. 3 for a new total gross of $43.3. ]]>
Two of the current top three highest grossing films of the year in North America are digital 3D releases.In its third week in release, Disney/Pixar’s wonderful “Up” brought in an estimated $30.5 million for a $187.2 million total gross, making it the third highest total in North America this year so far, behind DreamWorks Animation’s “Monsters Vs. Aliens” with $195.2 million and Paramount’s leader “Star Trek” with $232 million.
Also this weekend at the North American box office, Warners’ comedy “The Hangover” held on to the number one slot with an estimated $33.4 million, taking it over $100 million.
“Up” finished second and Sony’s debut “The Taking of Pelham 1 2 3” finished third with an estimated $25 million.
In the 3D arena, Vivendi opened “Call of the Wild 3D’ this weekend on 14 screens, earning only an estimated $10,500.
]]>