On Stranger Tides

Stranger tides, indeed. Of course the movie industry has seen down years domestically and a few successful movies in 2012 could change everything but, as has been widely reported, domestic tickets sales dropped by about three percent in 2010 – despite a rise in ticket prices – and, more troubling, attendance was the lowest it has been in sixteen years. And yet, international sales set records. To take just one example, according to the Hollywood Reporter, Disney’s Pirates of the Caribbean: On Stranger Tides tallied $802.6 million in offshore box office, more than three times its domestic gross.  Many factors are contributing to this developing trend, not the least of which are digital cinema technology, the rise of alternative content and Hollywood’s unending dependence on sequels and lowest common denominator films. The transition in the motion picture exhibition business that started a decade ago with the implementation of digital technology is gaining momentum. More wholesale change is inevitable.

Thanks to digital cinema technology – cameras, effects, editing – new filmmakers around the world now have the tools to make movies that are less expensive and more creative that has even been possible. At the same time, digital cinema technology is creating new opportunities for exhibitors that simply weren’t available a decade ago.The impact around the world is fascinating.

France, for instance, enjoyed its largest box office in 45 years. Part of this may be attributable to the fact that more than two-thirds of the screens in France are now digital, compared with only a third last year. In any case American films’ share of the French box office total was down slightly.
The increased number of digital screens around the world means Hollywood has better access to a large and growing audience that will only get larger over the next several years. For the first time in history every movie one of last year’s top ten movies was either a sequel or a movie based on a comic book. Could it be that the domestic audience has grown weary of the same old same old? That remains to be seen but, with the noted exception of the French overseas audiences seem to be embracing Hollywood’s tent-pole movies and 3D. Warner’s Harry Potter and the Deathly Hallows Part 2 earned more than half of its total $953 million in foreign box office from 3D venues. Paramount’s Transformers: Dark of the Moon, which grossed $771 million, got 74 percent of its international revenue from 3D.

The numbers were even more dramatic in China where, according to some reports, movie proceeds grew by more than 30 percent and reached almost $2 billion for the studios. If something can be done to relax China’s strict restrictions on foreign films those numbers could be even bigger, especially as the number of digital screens in China climbs.

Not all of the major studios saw dramatic returns overseas but other than Warner Bros and Paramount, most saw their annual foreign revenues grow at least a bit or fall only slightly. To hedge their bets the studios are increasingly acquiring internationally made movies. In Russia Universal released Office Romance, which grossed $12 million and Sony released Vysotsky: Thank God I’m Alive, a biopic of a legendary Russian figure, which has drawn $27 million so far in Russia alone. The question now is, will they consider releasing those movies in the States. It makes sense to me. AMC has already started an aggressive program of adding independent and foreign films to its regular mix. The AMC executives I’ve spoken with say the program is a success and will be continued if not expanded in the coming months.

Chicago Sun Times film critic Roger Ebert wrote recently, “Box-office tracking shows that the bright spot in 2011 was the performance of indie, foreign or documentary films. On many weekends, one or more of those titles will capture first place in per-screen-average receipts.” Ebert goes on to complain that, despite this many theatres outside urban centers never play these movies, even though the process of obtaining them is at least theoretically simpler with digital technology.

“The myth that small-market moviegoers don’t like art movies is undercut by Netflix’s viewing results,” Ebert wrote. “Its third most popular movie on December 28 was Certified Copy, by Iranian director Abbas Kiarostami. You’ve heard of him? In fourth place, French director Alain Corneau’s Love Crime. In fifth, The Girl With the Dragon Tattoo, but the original, subtitled, Swedish version. The message I get is that Americans love the movies as much as ever. It’s the theatres that are losing their charm. Proof: Thriving theatres police their audiences, show a variety of titles and emphasize value-added features. The rest of the industry can’t depend forever on blockbusters to bail it out.”