U.S. News

In a Distressed Year, Hollywood Smiles

Brooks Barnes|The New York Times

This was the year that Hollywood hit the jackpot by informing us that Mike Tyson keeps a pet tiger, Spock had a fling with Uhura, Hogwarts School needs a new head, the world will end in 2012, and even George Clooney is up in the air when it comes to women.

By year’s end, it was enough to make Daniel Day-Lewis break into song.

Hollywood will ride premium-price tickets for 3-D movies, big-budget sequels and — counterintuitively — the recession to more than $10 billion in ticket sales by the end of 2009, a near-record that is helping to offset a steep drop in DVD revenue.

Photo by Mick

As of Sunday, North American theaters had already generated about $9.95 billion in ticket sales, with 11 days of 2009 to go, according to Box Office Mojo, which tracks movie sales.

Most important, the industry did not reach this level of success through price increases alone. Box Office Mojo said attendance so far this year was about 1.39 billion, already a 3 percent increase over last year, even before counting many holiday blockbuster releases.

That is still off about 12 percent from 2002, the attendance peak for the decade, but a far better showing than 2008, when attendance dropped 4.5 percent, according to Box Office Mojo’s figures.

“It’s our job as an industry to make movies that consumers feel are worthy of getting out of the house to see, and this year we achieved that,” said Robert G. Friedman, a chairman of Summit Entertainment, the studio behind “The Twilight Saga: New Moon.”

Even so, the film business has more work to do if it truly wants to scale new heights at the box office. Adjusting for inflation, 2002 still holds the contemporary record with just over $11 billion in sales.

The robust box office is helping the industry cope with the DVD downturn. In the first six months of the year, DVD revenue fell by about $1 billion compared with the previous year, analysts say, as consumers tightened their discretionary spending and as video-on-demand and online viewing became more popular.

A major problem is that bigger receipts at the box office do not immediately translate to bigger studio profits because of revenue splitting with theaters and other partners.

Still, the uptick in moviegoing has studios for the first time in years focusing more on delivering must-see films than churning out poorly executed movies and letting DVD sales pick up the slack.

“If people come to the movies and leave feeling like they got more than they paid for, the experience was validated for them and they will come back,” said Tom Rothman, a chairman of Fox Filmed Entertainment.

So, how did Hollywood deliver such strong results?

Start with the recession. Historically speaking, the old saw that movies do well in hard times is not precisely true. But the economy certainly played a role this year, analysts say, with the movies offering a relatively affordable escape.

The downturn also coincided with a batch of movies that did not make people think too hard. Put “The Hangover” from Warner Brothers in that category — the comedy, featuring Mr. Tyson’s tiger, came out of nowhere to sell $277.3 million in domestic tickets — along with inexpensive thrillers like “Taken,” from 20th Century Fox.

Studios relied surprisingly little on men in tights — “X-Men Origins: Wolverine” was the lone superhero picture among the year’s top 10 — but leaned heavily on big-budget sequels and prequels. Seven of the top 10 movies were new franchise installments, including the No. 1 movie of the year, “Transformers: Revenge of the Fallen,” which Paramount Pictures pushed to $402 million in domestic sales.

Other factors mattered, like a less-cluttered marquee: the number of films released in theaters dropped 14 percent for the year compared with 2008. But by far the biggest contributor was the audience’s embrace of 3-D screenings, for which a ticket costs $3 to $5 more than standard.

Analysts estimate that box office revenue from 3-D has totaled $1.3 billion so far this year — not counting “Avatar,” from James Cameron, which opened on Friday. In 2008, 3-D sales stood at $307 million.

Expect the business to push the format even harder as a result: there are currently more than 50 films slated for 3-D release in coming years, according to RealD, a provider of 3-D technology for theaters.

Imax, the large-format movie company, also kicked into overdrive in 2009, helping to push film after film to blockbuster status. There are now 440 Imax theaters open around the world, a 24 percent increase from the fourth quarter of last year, according to Richard L. Gelfond, Imax’s chief executive.

A rebuilding year ahead

Some studios rode these business currents, and others nearly capsized in them. Leading the Big Six movie factories was Warner Brothers, which dominated with 20 percent market share and $1.9 billion in sales in North America. (Add in overseas figures and the studio raked in $3.7 billion for its biggest unadjusted year ever.)

Notably, “Harry Potter and the Half-Blood Prince,” the year’s second best-selling movie with $302 million in domestic tickets, overcame a delayed release date and worries that consumers were tiring of the series set at the Hogwarts School for wizards.

Sony also recorded its best year, selling more than $3.4 billion at the global box office — an impressive result since the company did not have any films among the year’s top 10 in North America. Its formula? A wide range of pictures: the end-of-the-world epic “2012” on the big-budget side, “Paul Blart: Mall Cop” on the small, “Julie & Julia” aimed at older women, “Cloudy With a Chance of Meatballs” directed toward children.

“There are a bunch of different audiences out there if you pay attention to them,” said Doug Belgrad, president of Columbia Pictures, a unit of Sony. Added Matt Tolmach, who is also president of Columbia, “People are much more selective. If they don’t feel a movie is for them, it’s over.”

Paramount, owned by Viacom, reversed its fortunes with a successful reboot of “Star Trek,” in which a young Mr. Spock had an onscreen kiss with Uhura, and the introduction of a possible new franchise with “G.I. Joe: The Rise of Cobra.” Giving the studio a boost was its decision to focus on fewer but more ambitious titles. Paramount will release 14 movies this year, a 36 percent drop from two years ago.

Fox’s year is still undetermined, pending results through the rest of the year for “Avatar,” which cost $310 million to produce (before deducting tax credits).

Although the studio effectively delivered sequels, including “Night at the Museum: Battle of the Smithsonian,” Fox made one of its best moves with animation. “Ice Age: Dawn of the Dinosaurs” delivered $884 million in global ticket sales — $200 million more than “Up,” from the Walt Disney Company.

“Up” was no slouch, particularly in North America, where it was the year’s third-biggest seller with $293 million in domestic sales. But it wasn’t enough to counter a disastrous year for Disney’s studio, which lost money in two quarters, leading to a management overhaul.

Bloated budgets for films like “G-Force” and “Disney’s A Christmas Carol,” along with multiplex wipeouts like “Confessions of a Shopaholic” and “Surrogates,” were Disney’s primary downfall.

Independent distributors had a rough year — though the Weinstein Company hit pay dirt over the summer with “Inglourious Basterds,” a 50-50 production with Universal Pictures, and was hoping for a late year rally with Mr. Day-Lewis and a cast of beauties in the musical “Nine.”

Outside of “Basterds,” Universal Pictures also stumbled. Despite successfully rehabilitating a franchise with “Fast & Furious,” the studio suffered flop after flop, including what is widely considered the year’s biggest, “Land of the Lost.” Its co-chairmen were fired in October.

The studio is careful to say that 2010 will be a rebuilding year, since all of the movies will be ones that those executives left behind in the pipeline. But there are some potential blockbusters in the batch, including a third installment of the “Meet the Parents” series.

“That gets us back closer to the things we’ve done well before,” said Adam Fogelson, Universal’s chairman. “I’m excited to focus on a new beginning.”