http://www.nytimes.com/2005/05/10/movies/10holl.html (need to be subscribed)

Hollywood Worries as Decline Continues
By SHARON WAXMAN

Published: May 10, 2005

LOS ANGELES, May 9 - Now Hollywood is starting to get worried.

The poor box-office performance last weekend of the first major film of the summer, "Kingdom of Heaven," released by 20th Century Fox, made for 11 weeks in a row of declining movie attendance and revenue compared with last year, adding up to the longest slump since 2000 and raising an uncomfortable question: Are people turning away from lackluster movies, or turning their backs on the whole business of going to theaters?

The historical epic about the Crusades, which stars Orlando Bloom and was directed by Ridley Scott , took in just $20 million at the domestic box office, a puny opening for a film that cost about $130 million to make and was supported by a major marketing push. The film was helped by a stronger performance abroad, where it took in $56 million in 93 territories.

To be sure, "Kingdom of Heaven" is not the first swords-and-sandals epic to miss the mark with American audiences; neither "Alexander" nor "King Arthur" nor "Troy" was embraced by audiences in this country last year. Analysts said that the "Crusader" movie's R rating contributed to its weak opening, along with reviews that declared Mr. Bloom's performance inadequate.

The weekend's top 12 films took in $77 million, the worst result for early May in at least five years, according to Exhibitor Relations, a company that tracks box-office results. Box-office revenue is down almost 6 percent compared with last year's, while attendance is down about 8 percent, Exhibitor Relations reported.

Since 2002, attendance is down about 10 percent for the comparable period, to about 433.7 admissions from about 485 million. The decline has provoked speculation that a rising DVD market and the advent of more elaborate home entertainment centers, along with the shrinking window of time between a theatrical release and the appearance of the DVD, is causing moviegoers to stay home and wait for discs.

"It does take more to get people out of the easy chair and to the theater; movies have to be so much more compelling," said the president of Exhibitor Relations, Paul Dergarabedian. "DVD's and home theater create more of an anchor to keep people at home. There's a little bit of that going on, and when there's more competition for eyeballs, it's a lot more of a challenge."

Still, some of Hollywood's most seasoned executives insist that this year's problem is a simpler one: The movies have not been good enough. Usually, they said, a sleeper hit comes along in late winter or early spring to wake up the box office, like last year's "Mean Girls" or "Starsky & Hutch" - or the crucifixion blockbuster "The Passion of the Christ."

"Nothing has turned on the audience yet," said Tom Sherak, a partner in Revolution Studios. "It's happened many times before, where the movies come out without great word of mouth. What's happening is the same people who usually come that first weekend have been coming, but they seem to go away quickly because the movies are not generating a broader audience."

Others blamed last weekend's raft of R-rated films, which cut out a major segment of the audience, for the continuing drop. Warner Brothers' "House of Wax," which also opened last weekend, was rated R.

"R-rated pictures aren't working in this marketplace like they used to," said John Fithian, president of the National Association of Theater Owners. "They still seem to work overseas, but they're not as easy to sell in the U.S. Parents are more concerned. We're enforcing the ratings really hard. Anytime you have an opening weekend with all the opening movies rated R, you don't have the same demographic potential as you do otherwise."

In the case of "Kingdom of Heaven," Fox labored to make a film about religious war that would offend neither Christians nor Muslims and trimmed some of Mr. Scott's more violent scenes, said a person who worked on the film and spoke on condition of anonymity to protect relations at the studio. But because the subject matter was religious war and not, as with "The Passion," resurrection, the studio could not count on a big Christian turnout, the person said. A spokesman for Fox said the film was actively marketed to Christians.

Mr. Sherak and others predicted a change once theaters carry a movie that people are excited to see. "The marketplace is obviously in a malaise, and it's going to take movies like 'Star Wars' to get us out of it," Mr. Dergarabedian said, referring to the highly anticipated final installment of the series "Star Wars: Episode III - Revenge of the Sith," which opens on May 19.

Mr. Fithian, whose member companies have the most to lose from the rise of home viewing, did not agree that the current drop reflected a fundamental shift.

"We are obviously not happy with the 11-week rut that we've been in, but we don't view it as a long-term structural problem," he said. The long-term trends are still positive, he added, referring to an increase in theatrical admissions in the past three decades. "The overall admission trend is that it's growing faster than the population," he continued. "I caution people not to jump to - 'DVD's are killing theaters.' If you look at the numbers, it's not happening," he said.

Mr. Sherak agreed, saying the movie business is cyclical. "I have 35 years of history to prove it," he said. "If attendance drops, it'll drop 2 to 3 percent over all. If it goes up, it goes up 2 to 3 percent. If at the end of the year attendance is off 9 percent, then you have a problem. But right now, it's about the movies."

EW has a feature in this weeks issue about the declining box office and the rise of dvd. People are starting to take this box office slump seriously.

If Rated-R movies aren't as profitable as the used to be, then explain The Amityville Horror's success thus far and the $$$ it's made being a hard R-Rating?? Maybe we just haven't had a REALLY good R-Rated movie made to bring the masses in adult wise and over 17 in a long time.. Also, maybe Kingdom of Heaven also sucked donkey balls to the general audience and came across as to much of a ripoff of LOTR and the massive land battles we've already seen time and time again and the audience is tired of it which is why it didn't make as much as they speculated it would?? It boils down to the fact that both Hitchhiker's Guide and Kingdom of Heaven were shitty movies to start the summer off and that SITH is gonna wipe the fucking movie map this summer over any movie box office wise and not a damn thing will survive against it??

DVDs may have a small impact - but really they havnt dented the box office in the last few years as much as you would expect. Infact - people tend to purchase movies that they have already seen at the theatre more than ones they havnt seen - so it basically opens up an extra stream of revenue for studios rather than taking away from from overall BO. If anything - its repeat business that is effected by DVDs and not opening weekends.

I think the downturn is basically due to a lack of films people want to see. The ones that are good have actually made decent money - especially in April - Sin City, Amityville, The Interperter and Sahara. The big loser was March - with Ring 2, Miss Congenial 2, Robots all underperforming. February was surprisingly better than expected. January was brilliant! Overall there was no Passion of Chrst and that hurt the BO. Then the so called summer films were just not appealing - XX2, Hitchhikers, KOH, while WAX was all horrored out - something like the 100th horror fim of the year - overkill!

Repeat viewership is way down and frontloading is a huge problem primarily because of DVD. DVD has also allowed a number of smaller nitche projects to get produced because of the revenue stream after the theater release.

Robots didn't underperform.

I guess this box office slump has to do with the quality of the movies released more than anything else. I think that 2005 so far has been terrible for the movies. I mean i've seen about 11 2005 movies, and the only ones i think deserve more than a B are Hitch & Hostage. The first has ended up as the highest grossing movie of the year so far, and the other had a great multiplier for an action movie. I enjoy watching movies, but some movies this year were a pain to watch ( Be Cool, Hide And Seek ).

So, when really good movies will be released ( I'm really looking forward to the numbers of ROTS & Cindrella Man ), I think people will go see them.

I think this year overall is releasing medicore movies, so that explains the drop in box office. DVD's have a small impact but not much, everyone I know still goes to the theater. There will be some movies like STAR WARS, THE LONGEST YARD, CINDERELLA MAN and MADAGASCAR that will bring people in.

I suspect sky high gas prices are contributing to this problem. It cuts into the disposable income and if you have to choose between a full tank of gas and going to see a movie, especially one that you've already seen, the gas wins.

This slump, as they are calling it, is not really a slump at all. The 11 week decline this year is really not that big of a deal. Think about it. Last year Pasion of the Christ made the box office soar in the months of Feb and March and April. Then you had Strasky and Hutch and befire that 50 First Dates were both pretty decent hits. Dawn of the Dead was a good sized horro rhit, much like Amityville, then Man on Fire and 13 Going On 30 came on board and did decent business as well. Then Van Helsing did good business the first weekend in May and then Troy and Shrek killed at the vbox office. What I see here is that the early success of last year was fueled by Passion, something that no one could see coming and then you had stars like Stiller, Sandler and Pitt to anchor some solid grosses. What do you have this year? All charlatans. Amityville did it's job but with films like XXX with no real star and Kingdom of Heaven tryiung desperately to cash in on the Loonies obsession with these kind of films, Hollywood just read it wrong. There is no doubt that this year will not surpass last years overall box office, I don't see how it can with Passion and Shrek doing what they did. Even with films like SW and WotW, it will not be able to soar past it. But I don't think this 11 week decline is really all that earth shattering. There is no Jesus movie, no real stars that kicked it off and to say that the official launch of the summer starts the first weekend in May, that is not really true. Last year VH did quite well, but before that, in 2003 X2 did well, adn before that the Mummy came out I think and then you have Gladiator....so teh first May weekend was basically introduced in 2000 with Gladiator...before that, the official launch was always the May 2-4 weekend. This year provges that all over again. Don't panic, nothing that SW can't cure.

That's actually a good point. I remarked a few weeks back that I wouldn't drive to one of the theaters that was a little more distance just to see a movie, because the gas prices and my van (it's big, and it's a gas hog) would not really be worth it, so it's probably playing a factor in things.

It's not R rated movies. It's not DVDs. It's not gas prices. No, it's not even the sudden popularity in Diet Cherry Vanilla Dr. Pepper that is keeping people at home. It's the shitty movies that are being churned out by the studios. There have been, by my counts at least, a whoping total of three good movies released this year. THREE. Three movies in four months. That's less than one movie a month that was actually worth seeing at a theater in my book. People are just waiting for that must see, great film to hit the market. It'll happen, and most of us will never even remember having this conversation. Every year, there is always a new doom and gloom outlook on the box office. It's normally associated with DVDs. I'm sorry, but DVDs, no matter how advanced home theaters become, will ever replace going to the movies. People said the same thing about VHS when those first came out, and look where we are now. Everything will be fine.

Yep. That's what I think.

I've liked a lot more than 3 mores this year, but honestly, nothing has blown me away completely.

So whats this correlation between bad movies this year? I think movies this year were better than what they were last year when you track to about this month vs last May. What genious can explain Van Helsing opening better than Hitchhiker's Guide or twice as much money as Kingdom of Heaven. Im starting to believe DVDs do have an affect on theaters like console systems destroying arcade. I know people who if they cant see a movie by its second week in theaters, they will never see it. They give the same excuse "Its already out in theaters for almost a month, I might as well catch it on DVD in just another 4 months" Look at how blockbuster now gives unlimited rental membership because dvds are now more and more affordable that people just blind buy them now

In 2004, 5 movies released towards the beginning of May including X-Men have eventually hit 100 million
In 2003, 4 movies released towards the beginning of May have eventually reached 100 million
This year only 3 have reached that mark because KOH blew it

It's more of a problem that new ideas are rare today, and even when they're found they're too risky to produce into movies in fear of it being too different. The summer's been slow so far because there's been no interesting movie.

Sorry Makeshift, its not an attack on you but with so many horror movies released this year, I would of thought that you would think this year was better than last

Van Helsing, despite being a terrible film, had a much wider appeal than both KOH and HGTG. It also had better marketing, bigger star power, a better concept...

The "big" movies we've had this year just haven't had the kind of "oomph" needed to take them over the top. HGTG had zero star power, a small name recognition, and pretty bad/average marketing. KOH had bad marketing, an R rating (which does hurt your opening somewhat), not enough big star power, and a concept people, to be quite frank, just don't care about or don't have enough knowledge about to be interested in.

And your comparison with DVDs and theaters to arcade and console games is ludicrous, Roid. The arcade crumbled for two reasons - the home console eventually developed graphics better than what could be seen at an arcade, and developers stopped making games for the arcade. With the theater, you will never be able to emulate the experience you have seeing a film for the first time in a theater, and studios are never going to just stop making films for theaterical release and shuttle all of them straight to DVD. It will never happen.

Most of the horror films released this year have been total garbage. I'd rather see three or four great horror movies released in a year than thirty terrible ones.

Kingdom of Heaven was never going to be the next Troy. Troy was one example of how starpower can help a movie that much. Without those stars, it wouldn't have opened to more than $30 million.

Hitchhiker's Guide to the Galaxy was never supposed to be a $100 million movie, either. It's another example of how the FANS overestimated the fanbase and box office performance; nothing more.

I don't know if we can pin it all on quality. Even the Oscar boosts were smaller this year. Some good movies like Fever Pitch and The Upside of Anger , which I haven't seen the latter, weren't even given much of a chance. Crash made a whoppin' 9 million, while Boogeyman made 10 million more on opening weekend, and I don't think quality can be debated. The good movies aren't getting box office glory either.

While that's true that Boogeyman opened to $10 million more, people can't really know the quality of a movie until they see it.

And people aren't going to see movies of quality like Crash and others. I think I can trust my better judgement on what the quality of Boogeyman was like. :razz:

I'm surprised that people haven't caught a main factor that the gross is down so far this year: the number of wide releases. In 2004, here are, by month, the number of new releases that were in over 800 theaters on its first weekend:

Jan: 10
Feb: 11
Mar: 12
Apr: 19

Here is the same data for this year:

Jan: 7
Feb: 10
Mar: 10 (count the Passion Recut)
Apr: 11

As you see, the number of new releases are way down. It's not about the quality since studios have been dumping their bad movies to the first 4 months for many years. In a sense, I'm actually happy for this development because it means they are producing fewer craps, and we aren't bombarded with 4 or 5 bad movies a weekend as we had to face last April.

Its likely that 2005 Total domestic gross will be lower than 2004. But then theres maybe some surprising hits. Dont forget Hitch did very well. Perhaps some more stuff like that coming????

Teens are the target demographic for almost all movies these days. Movies like Boogeyman (and even I, a hardcore horror fan, thought it sucked) will do well because they actually get great theater counts and huge marketing.

Crash had 1,800 theaters and a little marketing campaign. The reviews helped that movie immensly.

That's a great point. I remember that April 30 last year brought us Mean Girls with a $24M opening, but it also shoved Envy, Godsend, Laws of Attraction, Bobby Jones: Stroke of Genius, etc. on us.