Hollywood's Year Has Happy Ending

In Challenging Time for Entertainment, Movie Industry Sets Records

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LOS ANGELES (AdAge.com) -- Few industries had quite the recession-busting year Hollywood had. By Dec. 9, the movie studios had sold a collective $9.68 billion in tickets, busting the previous record set in 2007 with three weeks to spare, according to Hollywood.com. Attendance was at an all-time high too, on track to finish the year with a 5% increase, the highest growth margin since 2002.

GOOD ONE, 'SHERLOCK': Robert Downey Jr.'s film, along with 'Chipmunks: The Squeakquel' and 'Avatar,' helped set a three-day weekend box office record.
GOOD ONE, 'SHERLOCK': Robert Downey Jr.'s film, along with 'Chipmunks: The Squeakquel' and 'Avatar,' helped set a three-day weekend box office record.
Tinseltown's triumph didn't come easy. The industry's biggest theater chains invested in costly new digital technology to accommodate the rise of 3-D filmmaking, estimated to cost Regal, Cinemark and AMC alone a reported $525 million to install 15,000 new digital projectors over the next five years. Cash-strapped consumers were also torn between spending the $10 to $15 to see a movie vs. putting that money toward live concerts and sporting events, which also saw a growth in sales this year despite the recession. That the studios were able to market the value of going to the movies in the most competitive year ever for entertainment is a considerable achievement.

And the year finished big. On Christmas weekend, moviegoers turned out in record numbers, with a record $278 million in tickets sold during the three-day holiday weekend. Such boffo numbers were thanks in large part to Fox's "Avatar," "Alvin & The Chipmunks: The Squeakquel" and Warner Bros.' "Sherlock Holmes," which collectively became the first three movies to all gross more than $50 million in one weekend.

Despite the intense holiday competition, the market was welcoming to other new releases, too, such as Universal's "It's Complicated," which sold $22 million, and Paramount's "Up in the Air," which grossed a solid $11.75 million in its first weekend of wide release.

"This month in particular has shown when movie studios give people real options and real moviegoing experiences, they'll turn out to see them, whether they be breakthrough technology experiences, large-scale adventure movies or true-quality comedies with heart, with identifiable emotional underpinnings," said Eddie Egan, Universal Pictures' president of marketing.

Broad appeal
The sheer diversity of offerings was also praised by Tony Sella, co-president of marketing for 20th Century Fox, which not only scored with "Avatar" but saw "The Squeakquel" bank $77 million in its first five days.

"Our success was keeping it a broad family audience for a comedy, not making it a kid film," he said. "When you have Robert Downey Jr., America's newest darling, and 'Avatar,' you could minimize ['The Squeakquel'] by doing that. We took a lot of precaution in making sure it had wider appeal."

"It's Complicated" was also a surprise hit for Universal, a studio that could use one after a summer of disappointments such as "Bruno," "Land of the Lost" and "Funny People." The Nancy Meyers film had a $22 million debut, a good $5 million to $10 million higher than early analyst predictions, which saw the romantic comedy starring Meryl Streep handicapped by its R rating and older-female skew. Instead, the film received a CinemaScore average of A- and is on track to outgross Ms. Meyers' previous outing, 2006's "The Holiday," and potentially even Ms. Streep's $90 million summer sleeper hit "Julie & Julia."

Universal targeted 25- to 54-year-old females with a large-scale TV and print buy, and also with a social-media push that amassed an impressive 120,000 Facebook followers by release day, suggesting its target fans were already talking about the film online. "We definitely went to a broad audience in targeting our media and just tried to play up all the aspects of the movie," Mr. Egan said.

Despite the generous distribution of wealth among the studios, a few disappointments emerged. While moviegoers may have turned out in record numbers at theaters, DVD sales continued their steady decline this year, even with the added momentum of Blu-ray. Coming off a 5% year-over-year sales slump in 2008, DVD sales were down 13% in the third-quarter of 2009 alone, according to the Digital Entertainment Group, although a holiday bump was expected in the fourth quarter. The rise of Netflix, Redbox and other digital rental services, however, suggests that home entertainment may be at an all-time high, with home video transactions up 6.6% year-over-year in the third quarter, according to DEG.

Bullock hit
Then there's "The Blind Side." In its sixth week of wide release, the Sandra Bullock sports drama continues to coast as the year's most unstoppable word-of-mouth hit, amassing $184 million and outpacing even "New Moon's" performance during the same week. The film's surprise success helped Warner Bros. edge out Paramount as the top-grossing studio of the year, coming off a slate that also included "Harry Potter & The Half-Blood Prince" and mega-comedy "The Hangover."

Richard Ingber, president of worldwide marketing for Alcon Entertainment, the production company for "The Blind Side," had half-jokingly predicted to Ad Age in December that the film could crack the $200 million mark -- a first for a sports drama and a Sandra Bullock movie -- a milestone that now seems very much within its reach as the film continues to find an audience between the coasts.

"We heard about a small town in Wisconsin [that] on opening day never sells out a matinee. The last matinee they sold out for was 'The Dark Knight,' and 'The Blind Side' was the one that followed," Mr. Ingber said. "We had a good sense right from the start of the campaign that the actual box office would be coming from those areas."

Roll the credits

WINNERS
FOX. The studio was having a pretty tepid year, with fall releases like "Jennifer's Body" and "Fantastic Mr. Fox" failing to catch fire as the studio put all its chips on a year-end one-two punch of "Avatar" and "Alvin & The Chipmunks." Luckily, the gamble paid off big time, with the studio in a dead heat with Warner Bros. to break the record for biggest annual worldwide grosses in 2009.

THEATER OWNERS. With 75% of "Avatar" ticket sales coming from 3-D, theater owners can breathe a sigh of relief that the costly technology they've been rolling out over the past several years has been a worthwhile investment. Moviegoers proved they are willing to turn out in droves and pay a premium to see high-quality 3-D movies in-person.

THE OSCARS. After hitting an all-time ratings low in 2008 due to a lack of high-grossing Best Picture candidates, the Academy Awards are in desperate need of an award-caliber blockbuster to attract viewers this year. "Avatar" seems a shoo-in nominee for the first 10-slot Best Picture category, as does James Cameron for Best Director and a practically guaranteed sweep of the effects categories. Expect this year's ratings to increase even more than last year's 13% boost.

LOSERS
PRINT/OUTDOOR. A $150 million worldwide marketing rollout for "Avatar" heavily favored TV and cinema to convey the dynamic 3-D storytelling, leaving print marginalized and outdoor virtually shut out altogether of Fox's media buys. "In this case, 'Avatar' is not a print medium," said Pamela Levine, Fox's co-president, marketing. "We don't really have the goods to show the entire experience up until you get into the theater to see it, so the idea of creating a flat image to express what this movie is was just too challenging."

DISNEY. The struggling studio was banking on "The Princess & The Frog" to become a holiday hit to make up for an otherwise bumpy year that produced few highs ("Up," "The Proposal") and lots of middling lows ("Old Dogs," "Race to Witch Mountain," "Jonas Brothers: The 3-D Concert Experience.") But after a promising $25 million debut, the animated film fizzled to a $63.3 million after the increased competition from Fox, which handily out-grossed Disney with both "Avatar" and "Alvin & The Chipmunks: The Squeakquel" over the Christmas weekend.

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