2-D Leads Hollywood Box-Office Comeback

Outperformers Include 'Fast Five,' 'The Hangover Part II,' 'Bridesmaids' and 'Super 8'

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'Super 8'
'Super 8'

Comedies and dramas filmed in the old-fashioned two-dimensional format are leading Hollywood's summer box-office revival, calling into question studios' investment in more costly 3-D extravaganzas, at least in the short term.

The season's biggest surprises include Universal Pictures' "Fast Five," a 2-D action film that relied on car chases and shootouts to generate $206 million in U.S. ticket sales. Outperformers also include a pair of raunchy comedies, "The Hangover Part II" and "Bridesmaids," and last weekend's science-fiction thriller "Super 8."

Studios are finding that slapping 3-D technology onto a film doesn't guarantee audiences, and relying on the format can be a drag on the stock. Production surged after James Cameron's "Avatar" became the top-grossing movie ever. In the rush to capture premium ticket prices, Hollywood made pictures in three dimensions without first mastering the technique, said Jeff Bock, an analyst with Exhibitor Relations Co.

"Attendance has been falling off for three years, and 3-D was supposed to be the savior," Mr. Bock, who is based in Los Angeles, said in an interview. "With the 3-D rush jobs we've had over the past two years, people are getting an inferior product."

Among the recent 3-D disappointments are "Kung Fu Panda 2," which drew 45% of its U.S. opening-weekend audience in the format, and "Pirates of the Caribbean: On Stranger Tides," with 46%. Globally, Walt Disney Co.'s "Pirates" is the year's biggest-grossing picture with a haul of $913 million.

The percentage of box-office sales going to 3-D tends to vary widely depending on whether audiences believe 3-D adds to the experience, said Martin Pyykkonen, an analyst with Wedge Partners in Greenwood Village, Colo.

"Avatar," released in 2009, generated 71% of its opening-weekend sales from 3-D showings, said Rich Greenfield, an analyst with BTIG in New York. Audiences conditioned to watching the "Pirates" movies in 2-D didn't consider 3-D essential to the story, Mr. Pyykkonen said.

Warner Bros.' "Hangover," the year's biggest-grossing movie to date in the U.S. and Canada with $221 million, No. 2 "Pirates" and "Fast Five," in third place, have helped to close the gap in ticket sales from last year. As of last weekend, the year-to-date decline narrowed to 8% from 15% since the May 1 start of Hollywood's traditional summer season, according to researcher Hollywood.com Box Office.

Mr. Bock has predicted that the domestic box office will hit $11 billion this year, up from $10.6 billion in 2010, in part because of the extra $3 or so per ticket moviegoers pay for 3-D and Imax widescreen viewings.

The ticket price may have been too high in some cases, Chase Carey, chief operating officer of Rupert Murdoch's News Corp., said on a March 7 conference call.

Producing a film in 3-D can add as much as 30% to the budget for a live-action movie and as much as 20% for animation, Mr. Pyykkonen said.

More is on its way. Warner Bros.' "Green Lantern," with Ryan Reynolds starring as the DC Comics character, is expected to generate $50 million in ticket sales domestically when it opens this weekend and $135 million during its theatrical run, the forecast of researcher BoxOffice.com. The 3-D film cost about $150 million to make, Internet Movie Database estimates.

Director Michael Bay's "Transformers: Dark of the Moon" may rekindle enthusiasm for the format, said Mr. Pyykkonen. Audiences are drawn to Bay's heavy use of visual effects, just as they are to Cameron, who spent a decade developing the camera system and techniques used to film "Avatar," Mr. Pyykkonen said. That movie generated $2.78 billion in global ticket sales for News Corp. "Dark of the Moon," the third in Bay's series about a race of robotic aliens, is set to be released on June 29 by Viacom's Paramount Pictures and stars Shia LaBeouf and Rosie Huntington-Whiteley.

"It will be the next interesting test as to what the market really thinks," Mr. Pyykkonen said. "Does the buzz build and say, 'Hey, you've got to go see this because of the 3-D.'"

Studios plan to release about 34 movies in 3-D this year and 38 next year. Mr. Pyykkonen estimates that as many as 44 will be distributed in 2013, and said he expects quality to improve.

"If you think of this in the longer term, this is going to work and it's going to be taken for granted," Mr. Pyykkonen said. "The growth rate may be slower."

--Bloomberg News--

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