A year for the record books

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It is most fitting that the film that helped propel the industry to a record-breaking 2009 is also one of the most talked-about movies in recent memory. James Cameron’s Avatar certainly did not disappoint fans and is truly a major entertainment vehicle for the masses. Moreover, the film is an event that just might change the way the industry looks at 3D in the near term. The New York Times recently compared Avatar and how it will impact the future of filmmaking to The Jazz Singer and the role it played in the movies’ transition from the silent to the talking age.

2009 will be remembered for many things including the election of the first black President of the United States. But those of us in the movie industry will remember 2009 for setting a record domestic box-office take of $10.61 billion, more than an 8% increase over 2008 and the first time the domestic mark of $10 billion was broken. Admissions also climbed nearly 4% but fell short of the record 1.6 billion set in 2002.

There were the normal tentpole films that generated the most revenue, like Paramount’s Transformers: Revenge of the Fallen, Warner Bros.’ Harry Potter and the Half-Blood Prince, Disney’s Up in 3D and, of course Fox’s Avatar. But it was smaller films like The Hangover, the mini-budgeted Paranormal Activity, Michael Jackson’s This Is It and The Blind Side that caught the industry by surprise.

For the second year in a row, Warner Bros. led the domestic box-office take and in 2009 established an industry record of $2.13 billion and about a 20% share of the market.

At the time of publication, it was estimated that foreign box office, all territories outside the U.S. and Canada, scored an all-time record of $10.7 billion. This is an increase of 7% from 2008’s record box office of $9.942 billion. 20th Century Fox topped the big six with total foreign box office of $2.4 billion, an all-time record for any Hollywood studio. The previous record was in 2007, when Warner Bros. made $2.24 billion. Finishing second was Sony Pictures, which registered its biggest year ever with box office of $2.14 billion, the first time Sony topped the $2 billion mark.

Driving much of the foreign growth was the weak U.S. dollar, particularly in the summer months. Although the dollar has strengthened since then, it is still down from a year ago. Other positive developments included both Russia and China becoming lucrative markets as they matured.

In another first for the year 2009, The Blind Side became the first picture in history solely driven by a top female star to jump the $200 million mark at the domestic box office. Sandra Bullock starred in the film, which grossed nearly $210 million in the seven weeks it was released last year.

So in a distressed year in the economy, why did motion pictures fare well? The old adage that movies score well in a recession proved true, as they are an affordable escape for the masses. Big-budget sequels and prequels scored high marks at the box office. The number of films released in the marketplace dropped 14% for the year compared with 2008.

Most executives in the business point to 3D as the biggest contributor. Not only is this newly reinvigorated technology appealing to audiences all over the world, it is demanding $3 to $5 more per ticket, which boosts revenues considerably. Of the 30 films that grossed $100 million or more at the box office, seven of them were in 3D and accounted for nearly $1.3 billion even before the debut of Avatar. In 2008, this total for 3D was about $310 million.

With the success of Avatar, we will find more 3D movies being produced and more 3D systems being installed in theatres worldwide. 3D is certainly pushing the digital-cinema market and the industry expects about 20 films in 2010 to be released in 3D. There are under 4,000 3D screens in the U.S. and we expect to see that number double in the next 12 to 18 months.

IMAX, the large-format movie business, also kicked into overdrive in 2009, adding ancillary revenue to the box office.

With so many records being broken and exhibition and distribution coming off record scores, it is also most fitting that the industry is getting prepared to travel to ShoWest in Las Vegas for the largest convention of its kind. Attending an international show like ShoWest is important to stay on top of industry trends and new technologies, but coming off a record year makes the experience of attending that much greater. See many of you in Las Vegas.

Get Ready for Home 3D

Three-dimensional television was one of the big offerings at the recent Consumer Electronics Show in Las Vegas. Joint ventures by high-tech and traditional companies are extending the reach of new technologies. Nearly all major TV manufacturers are coming out with product this year that will be in the stores sometime in 2010. These manufacturers pledge that the interactive experience that people are witnessing in movie theatres will soon be brought into the home.

Panasonic has partnered with the satellite broadcaster DirecTV to bring 3D programs to its viewers. The pioneering sports network ESPN said it would show at least 85 live events on a 3D channel starting in June, with sporting events being best suited to exploit this technology.

The question is whether consumers will replace their LCD and plasma screens and buy new, expensive 3D-loaded TVs to see the new channels of entertainment that are to be provided shortly. According to the manufacturers in Vegas at CES, both programmers and tech companies are betting that consumers are almost ready to fall in love with TV in the third dimension.

A joint venture among Discovery Communications, Sony Pictures Entertainment and the Imax Corporation will be a full-time channel featuring natural history, movies, sports, music and other programming. This partnership brings together three leaders with an extraordinary collection of award-winning 3D content, technology expertise, television distribution and operational strength to deliver a high-quality three-dimensional viewing experience to home television audiences.

Sony Electronics, meanwhile, rolled out its first 3D-capable TV sets at CES. They will be partnering with RealD and license its stereoscopic technology and eyewear as the companies seek to boost consumer interest in home 3D.

The movie industry has embraced 3D as an effort to distinguish the theatrical moviegoing experience from increasingly sophisticated home-entertainment systems. Box office has been greatly aided this year by 3D and premium ticket fees. So the question is: How long until consumers embrace home 3D and how much will this affect box-office revenues? It seems to this editor that 2D television has not dampened the spirit of moviegoers, providing there is good content in theatres, and although we would like to see 3D have many more years exclusively in cinemas prior to competition from the home market, theatres do have a good enough start to capitalize on it for a number of years. Get on the bandwagon now, Mr. Exhibitor, before 3D really passes you by.