Optimism at Film Trade Show

It’s not the best of times for the movie business, but many of the 6,000 people gathered for the film industry’s biggest trade show find something to be hopeful about in the bright prospects for American movies overseas.

Industry analyst Paul Kagan told movie exhibitors gathered at Bally’s Casino Resort for NATO/ShoWest that by the year 2000, the largest single source of revenue for the American film industry will be overseas markets.

Kagan forecast that overseas theatrical receipts will become the largest source of income, surpassing domestic theatrical revenue, domestic video sales and foreign video sales. This will happen, he said, as other nations build movie theaters like American multiplex-type centers.

The pleasing international prospects are just one thing occupying NATO/ShoWest, which is sponsored by the National Assn. of Theater Owners.

Hollywood’s major film producers are in Las Vegas, too, to impress the buyers of their products: the owners and operators of theaters around the nation, from 1,000-screen chains to family-run single-screen theaters. The studios have put together preview reels of their 1992 movies in hopes of exciting the theater operators.

Convention-goers get to see stars such as Geena Davis, Patrick Swayze, Jodie Foster, Nicolas Cage and Damon Wayans, and are treated to showy banquets and receptions hosted by the studios, as well M&M;/Mars, Coca-Cola and Pepsi. Even one of the smaller film distributors, Miramax Pictures, is here.

In the trade-fair exhibition area, there are signs of a changing moviegoing experience. Gourmet ice cream, cappuccino and video games are being shown to movie exhibitors as ways to boost revenue. “Theaters need something new to attract more people,” said Roy Aaron, president of Showscan Corp., who was in town to pitch his firm’s Dynamic Motion Simulator ride, which can be set up as an additional attraction at movie theaters. “These are ways to attract more people and take advantage of high-trafficked areas,” he said.

Last year was the film industry’s third best year ever in terms of overall American grosses, but it saw the lowest attendance in 15 years. That was the bad news delivered by Jack Valenti, the president of the Motion Picture Assn. of America, at Tuesday’s opening session of this convention.

“The box office was down by 4.4% to $4.8 billion as compared with 1990’s $5.02 billion,” Valenti said. He noted also that admissions were down about 7% from the previous year, dropping from $1.06 billion to $981.9 million.

The good news, Valenti said, was that the average ticket price nationwide stayed below $5.

Industry cost-containment efforts also are taking hold, he said. The average cost of making a movie decreased for only the second time in 12 years, to $26.1 million as compared to $26.8 million in 1990. He forecasts that 1992’s average cost will continue on the downward slope.

Valenti said that for the first time in recent history, average marketing costs for advertising in print rose less than 1%. In 1991, the average total cost for marketing a movie was $11.9 million, compared to $12.1 million in 1990. Adding the cost of filmmaking and marketing together means that the average film costs American filmmakers $38 million to produce.

Quoting statistics produced by Opinion Research Corp. of Princeton, N.J., Valenti attributed last year’s drop in admissions to a falling-off in the average number of films seen each year by all moviegoers, which dropped from 7.1 films in 1990 to 6.7 films in 1991.

The research revealed that audiences under age 25 showed a slight increase in the number of films they saw in 1991, reversing a five-year trend. But in the last five years, admissions of audiences over age 40 leaped from 142 million in 1985 to 257 million in 1991.

Valenti said that Hispanics accounted for 10% of total admissions, blacks 12.6%, whites 73% and a category that includes Asians and American Indians accounted for 4.4%. He said the highest frequency of attendance for all ethnic groups is by Hispanic moviegoers, who attend an average of 8.4 movies a year.

There was evidence of the growing worldwide market for American movies during the convention. At present, Valenti said that 41% of all filmmaking revenues come from international sources.

In this period of higher costs, lower movie attendance and a flat video market, the international market is a new growth area of income, said NATO/ShoWest General Chairman Tim C. Warner.

There was little discussion of ticket prices. Universal Pictures a week ago had urged theater owners to reduce prices on Tuesdays in order to stimulate midweek attendance for Universal’s movies.

NATO President William F. Kartozian said that the move by Universal was “unusual” because studios have traditionally resisted pricing flexibility. But he said many circuits already have half-price policies, and that since all the studios have not urged the same kinds of reduction, the logistics of cutting prices for one movie and not all would be difficult.

A second issue recently raised in the film industry has been a call for a new tougher rating code that has been endorsed by Los Angeles Cardinal Roger A. Mahony. The theater owners association, which administers the film industry’s voluntary rating system in partnership with the Motion Picture Assn. of America, has scheduled no discussion on the issue.

Valenti says he has recently had correspondence with Mahony but that the two have not scheduled a meeting. But he took a skeptical approach to any effort at “telling creative people how to tell a story.” He characterized such efforts as “scapegoating” for what is wrong in society.

Elsewhere at the convention, exhibitors will hear a discussion Thursday called “Black Films in America.” Representatives of four films released last year and in January will participate. They include George Jackson and Doug McHenry, who produced “New Jack City” and produced and directed “House Party 2”; Barry London of Paramount Pictures, which recently released the movie “Juice”; John Singleton, director of “Boyz N the Hood,” and Robert Townsend, a writer, producer and director of “Hollywood Shuffle” and “The Five Heartbeats.”

Tonight, Paramount Pictures hosts a dinner during which actor Eddie Murphy will be honored as “Star of the Decade” by the convention. It wraps up on Thursday with a Universal Pictures luncheon and a Coca-Cola-sponsored dinner that will honor Swayze as male star of the year, Foster as female star of the year, Brian Grazer as producer of the year and Lawrence Kasdan as director of the year.