Movie industry in box office slump 

LOS ANGELES - Hollywood hits the second half of the northern summer next week stuck in a box office slump and the debut of blockbusters like Tom Cruise's War of the Worlds is unlikely to change that, industry insiders say.

Many reasons are being talked about for the slump, including the red-hot DVD market, high ticket and concession prices and bad movies.

But box office watchers and studio executives agree it is too soon to make pronouncements on emerging trends in whether consumers want to see films in theatres or at home.

"There is a shift going on. That's clear, but it's unclear where that shift is taking place," said Brandon Gray, president of box office tracker boxofficemojo.com

Major film studios and theatre owners are mired in 17 straight weeks of declining ticket sales, compared with 2004 tallies, and several widely hyped pictures in May and June, such as Kingdom of Heaven and Cinderella Man, performed poorly.

Even hits like Batman Begins and Star Wars: Episode III - Revenge of the Sith have failed to change the picture.

A slate of coming comic book flicks and remakes such as Fantastic 4 and Charlie and the Chocolate Factory would seem to offer hope to Hollywood, but ticket sales have fallen so far that not even proven formulas offer any pain relief for Hollywood's box office headache.

"We're at too much of a deficit at this point for those movies to bring us back. July could be a busy month in its own right, but it's unlikely it can be big enough," Gray said.

That's bad news because the summer season can make up as much as 40 per cent of the year's total ticket sales.

So far, US and Canadian ticket sales stand at just under US$4.1 billion ($5.78 billion), nearly 6 per cent below US$4.33 billion at this point last year, tracker Exhibitor Relations says. Since May 6, the summer domestic box office is down 8 per cent at about US$1.39 billion versus US$1.5 billion last year.

In Germany, ticket sales were off 14 per cent compared with last year and in Australia, the box office was down 12 per cent.

Some experts see the narrowing of release dates between a movie and its DVD as a major source of declining ticket sales. Speculation is that some consumers are simply bypassing the movie and waiting for the DVD.

Others downplayed that idea, however, noting the key indicator of a DVD success is when it is based on a hit movie.

"People who like to go to the movies are the ones who buy the DVDs and the fact a movie played in theatres is often the reason they buy the DVD," said Paul Dergarabedian, of Exhibitor Relations.

Several sources saw the downturn as part of a normal business cycle.

"You're going to have glitches, and you're going to have ups and downs," said Dan Fellman, president of distribution at Warner Bros.

Fans complain that high ticket prices and concessions make going to theatres too costly. But industry players hear that gripe often and note the average ticket price is up 3 per cent this year, roughly equal to the increase in 2004 when the box office hit a high of US$9.54 billion.

The only reason everyone seems to agree on for 2005's box office slump is that this year's films of familiar remakes, sequels, comic book capers and science-fiction adventures simply failed to connect with broad audiences.

"Audiences are more sophisticated," Dergarabedian said, "and movies have to catch up."

Down but not out

US and Canadian ticket sales at just under US$4.1 billion are down about 6 per cent.

German ticket sales are off 14 per cent.

The Australian box office is down 12 per cent.

- REUTERS