CinemaBUZZ WEEKLY REPORT - 8 February 2013

Avengers: Top Grosser for 2012

BOXOFFICE Gets More TOP HEAVY

In keeping with a trend, now over a decade old, the U.S. cinema boxoffice for 2012 was even more skewed toward the top grossing films then in past years.

For 2012 the total domestic box office was $10.8 billion of which the top 25 films represented $5.6 billion or 52% of that total.  The top 50 films generated $7.6 billion or 70% of total gross.  There were 657 movies released last year; therefore, the remaining 607 releases generated only 30% of the total boxoffice take.  Wow!

This top heavy boxoffice favors action/fantasy movies. The top three films: The Avengers, The Dark Knight Rises, and The Hunger Games were also all action hero films. These were followed by Skyfall, The Hobbit, Breaking Dawn 2, and Spider Man, in that order. These top seven films generated, by themselves, over 24% of total 2012 boxoffice gross.  Fantasy, action, violence, with over-the-top special effects is what lures moviegoers into the local cinema and not much else.

BIG PROFITS For MOVIES

 "Movies will be priced based upon the size of the device they are viewed on" said Jeff Katzenberg, CEO of DreamWorks last week at the Founders Forum conference on digital media. "People will pay be the square inch. If a cell phone version of a movie is 75 cents you'll get 350 million people in India to pay that."

So, the theory is that you would pay much less to view a movie on a cell phone or other device than you would going to the local cinema.  This revenue may be the future but I believe the giant revenue generator for distributors (studios and other content developers/streamers) is the day-and-date release of movies across all delivery modes on a worldwide basis.  Would this model hurt cinemas ? Yes, but only at those cinemas that fail to exhibit movies in the way they should be presented - with an excellent on-screen image, terrific sound, an exciting and inviting environment, and thoughtful and innovative concession and other services.

I have often stated that the living room is the major competitor for cinemas, in the future it will also be smart phones, tablets, and PCs.  The potential revenue stream for the studios and other content makers under the above business model is too large to be ignored and the exclusive theatrical release window will become a memory.

The studios will be compelled to find new revenue sources even at the expense of severing long-held industry traditions like the first dibs theatrical release.  Katzenberg may be right but he doesn't push the logic far enough or wide enough.