Box office helps drive US Economy

LAS VEGAS — While other American industries look for cover during the economic crisis, Motion Picture Assn. of America chair-CEO Dan Glickman believes the thriving worldwide box office makes the U.S. film biz a powerful growth engine

Glickman had plenty of positive stats to rattle off during his annual state-of-the-industry address at exhib confab ShoWest thanks to the current surge in moviegoing.

He did, however, take some heat from the media for not following tradition and including the average cost of producing and marketing a studio pic in the MPAA‘s annual report.

Insisting there was no move to deliberately withhold those stats, Glickman said that it has become nearly impossible to calculate average costs when studios have so many co-financing deals.

Glickman and National Assn. of Theater Owners prexy John Fithian, who shared the stage with Glickman, said going to the movies is a relatively inexpensive form of entertainment compared with the cost of going to concerts, sporting events and Broadway shows.

“Movies have become an extraordinary escape valve. It’s a communal experience,” Glickman said.

That could explain why movie admissions have soared so far this year, by as much as 9%.

The average ticket price in the U.S. was $7.18 in 2008, up 4.4% from $6.88 the year before. That’s a far slimmer increase than tickets to sporting events or touring Broadway shows saw. The average price of a ticket for a Major League Baseball game jumped 10.1% to $25.43, while an NFL game ducat jumped 7.9% to $72.20.

So far this year, box office revenue is up both domestically and overseas. That follows a record-breaking 2008, when worldwide box office revs clocked in at $28.1 billion, up 5% over the previous year. International receipts made up a hefty 65% of the pie at $18.3 billion, up 7.1%. Domestic revs of $9.8 billion rose 1.7%.

But whether that provides enough cushion to make up for a downturn in the homevid sector remains to be seen.

NATO stats released Tuesday showed that DVD revenues for the top 10 pics at the box office were down 15%.

Fithian noted that it may have been a blessing in disguise that the major studios released 27 fewer pictures in 2008 — 162 vs. 188 in 2007. He said it’s a trend that should continue since it allows films more room to breathe at the B.O.

At the same time, Fithian said he recently canvassed studios to see how much they intend to cut back in the future. He said only two anticipate a leaner release slate but did not disclose which two studios.

The MPAA’s report also noted the sharp 33% year-to-year rise in the number of digital screens available worldwide. The growth spurt comes as Hollywood is increasingly embracing cutting-edge 3-D production techniques.

Also during his address, Glickman had a message for President Obama as the commander-in-chief flew to Europe for the G-20 Economic Summit: Fight to keep international markets open. He said Hollywood provides more than 50% of the films that play at the international box office.

Glickman also said there’s a perception problem in Washington that the film biz is all about fattening studios. He said it’s not, and that the movie industry generates jobs for thousands of middle-class workers, supports the exhibition industry and stimulates local economies.

In January, Republican lawmakers successfully removed a provision from the stimulus bill that would have provided studios with certain tax incentives, arguing that if the box office was doing so well, Hollywood didn’t need any aid.

Glickman said he will continue to fight to have those incentives included in upcoming legislation.


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