If you paid attention to entertainment news this summer, you might have noticed a steady stream of articles lamenting the season’s myriad big-budget flops at the local Cineplex.
At the top of that list, of course, was Disney’s The Lone Ranger, a bomb of staggering financial proportions. In early August, Disney reported that it will take a $160 to $190 million loss on the film, which many have said cost the Mouse House $250 million to make and another $175 million to market. Despite that film’s title, however, it was certainly not alone in the tentpole flop department. Joining it were R.I.P.D., After Earth and White House Down, among others.
Given such consistently grim news out of Tinseltown this summer—including industry luminaries Steven Spielberg and George Lucas predicting the eminent collapse of the movie business as we know it—I was very surprised when the final tally for the domestic summer box office was released earlier this week. Not only was it not a bomb, it was the best summer ever.
Hollywood collected a whopping $4.75 billion in the last three months, up 7% over the previous seasonal record of $4.4 billion set in 2011 and 10.2% over last summer. Meanwhile, about 560 million tickets were sold, the highest movie attendance in four summers.
So what gives? How can things be so seemingly dire and yet the best ever at the same time? Actuaries and accountants won’t be surprised to find out that the answer comes down to number-crunching.
Even though big-budget bombs hogged the headlines of late, Hollywood released so many films that did OK that the overall bottom line was the best ever. Specifically, studios released 50% more movies costing more than $75 million this year, meaning that audiences had lots to choose from—even if some of those high-dollar efforts came up short. Greg Foster, CEO of IMAX Entertainment, put it this way: “There have been a series of singles and doubles and triples this summer. There haven’t been a lot of grand-slam home runs, but it’s added up.” John Fithian, president of the National Association of Theatre Owners, adds, “Four or five underperforming movies doesn’t make for a bad summer when 15 or more movies performed well or overperformed. It was a very busy summer for exhibitors, and they are thrilled.”
Many studios found that their biggest losses were counterbalanced by some big success stories. The hit Disney took with The Lone Ranger, for instance, is offset by Iron Man 3′s iron-clad $408 million domestic take and $1.2 billion total international cume. Likewise, Universal took its lumps on R.I.P.D. (which cost a reported $130 million but took in just $64.7 million internationally) but offset that poor performance with the stellar box office r esults of the year’s second-biggest movie thus far, Despicable Me 2 (which turned its modest $76 million budget into $823.4 million internationally).
Other trends include American audiences’ growing apathy toward 3-D. In 2011, 3-D releases represented 45% of the total summer box office. This year, that percentage fell to just 32%. It’s also worth noting that even though the blockbusters are the movies that tend to make the news—either when they perform well or don’t meet expectations—several other lower-profile categories did very well this summer, specifically, low-budget horror movies (The Conjuring, The Purge) and raunchy R-rated fare (The Heat, We’re the Millers, This Is the End).
Meanwhile, a glut of family-oriented films, with as many as six or seven films aimed at kiddos being released in quick succession, resulted in some of those films falling by the wayside. “Demolished by the might of Pixar’s Monsters University and Despicable Me 2,” writes The Hollywood Reporter’s Pamela McClintock, “Turbo and The Smurf’s 2 were badly hurt.”
Finally, movie studios increasingly depend upon the burgeoning overseas box office to push their films into the black. Guillermo del Toro’s Pacific Rim, for example, looked like a lock for another slot on the 2013 bomb list when the $190 million film opened domestically with a weak $37.2 million debut. Since then, it’s crossed the $100 million mark here at home, but added a significant $304 million to its bottom line thanks to overseas viewers, including $110 million from the Chinese box office. That’s a big enough number that there’s already talk of a sequel (though del Toro likely won’t have quite as big a budget the second time around).
All in all then, the summer of 2013 wasn’t such a bad season for Hollywood.
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