Studios Already Stuffing Stockings

For Hollywood’s top studio executives, the holiday season is arguably the most nerve-racking time of year--despite the lucrative box office tidings it can bring to their company’s coffers between Thanksgiving and New Year’s.

“It’s more of a nail-biter than summer,” Disney Studios chief Joe Roth says. “It’s a much more competitive time and far fewer days to make films work.”

Like summer, which accounts for 40% of the year’s total box office receipts, the holidays are cramped with Hollywood’s first-string, big-budgeted, star-driven movies from A-list directors. It’s the year’s second-biggest revenue-producing season, accounting for about 20% of annual ticket sales.

But unlike summer, when movies have the advantage of at least 12 weeks of uninterrupted playing time between mid-May and mid-August, the holiday period is essentially bifurcated into two distinct periods--around Thanksgiving and Christmas--with three weeks of dead time in between.

“Is it a nervous time?” said Tom Sherak, chairman of 20th Century Fox Domestic Film Group, laughing. “Absolutely. That’s why everyone goes on vacation--they can’t take it.”

This year’s lineup is absurdly competitive--with a record nine films debuting Christmas Day, six of which are national releases.

Because Christmas falls on a Thursday this year, studios are taking advantage of the longer weekend.

“They’re all cramming their releases in on that day instead of spreading the dates out,” says John Krier, president of Exhibitor Relations Co., which tracks boxoffice results.

Among the Christmas Day crop is everything from family comedies like Disney’s “Mr. Magoo” and DreamWorks’ “Mousehunt” to serious dramas like Warner Bros.’ “The Postman,” directed by and starring Kevin Costner, and Disney’s “Kundun,” directed by Martin Scorsese.

From Nov. 7 to Dec. 31, as many as 27 major releases will unspool. Mega-movies, such as Paramount/Fox’s “Titanic,” and MGM/UA’s new James Bond installment, “Tomorrow Never Comes,” will face off on the same date, while Fox’s first in-house animated movie, “Anastasia,” will be up against Disney’s double-whammy reissue of “The Little Mermaid” and release of “Flubber,” starring Robin Williams.

There is more than $1.6 billion riding on those 27 movies this holiday season (in addition to the millions spent on two dozen limited releases), with the average production cost per picture of nearly $40 million and average marketing cost of nearly $20 million.

Last year’s holiday films brought in a total of only $1.1 billion at the box office--about 50% of which goes to the distributor--between early November and New Year’s Day, but tens of millions more dollars rolled in for various Christmas holdover releases in the opening months of 1997.

Ticket sales typically surge from early or mid-November to the end of the month and again just before Christmas until New Year’s weekend. Sales plummet during the first three weeks of December when women, in particular, are more inclined to go shopping and because of other distractions, such as holiday parties and college exams.

“As soon as Christmas starts to rear its head, your best moviegoing audience starts to erode,” Sherak says.

While that’s not new, what has changed is that increased competition in the marketplace makes it more difficult for distributors to keep their movies--particularly those aimed at adult audiences--in theaters throughout the holiday season. (Family and kid-oriented movies, both animated and live-action, typically have a better shot at playing through).

“It used to be when you opened a movie at Thanksgiving, you’d normally expect to play through Christmas,” Sherak says. “Now, you have Thanksgiving movies and Christmas movies. And, that’s the way they’re sold.”

So distributors are inclined to book their movies in as many theaters as possible nationwide to maximize their box office dollars as quickly as they can--just in case they lose screens later on. Fox, for example, will release the sequel “Alien Resurrection” Nov. 26 on about 3,200 screens.

“We know even though it’s a very good movie, we’re not going to be able to hold that many screens through Christmas,” says Sherak, estimating that by mid-December, “we will have done 80% to 85% of our business.”

Likewise, Sony Pictures will debut its $100-million holiday event picture, “Starship Troopers,” in similar fashion. The effects-laden action adventure will kick off the holiday season, opening Nov. 7 on more than 4,000 screens in more than 3,000 theaters.

“The pictures do play out faster,” concurs Sony’s Distribution President Jeff Blake. “So, that’s the way you have to approach it. Be the first picture out there, open very wide and have lots of money in by the end of November.”

While theater owners guarantee distributors a certain amount of playing time, the six- to eight-week period between mid-November and early January “is a tough commitment to get not knowing what the level of business will be,” explains Blake.

Competition has increased substantially since 1990, with multiple movies opening practically every weekend of the year, giving way to a growing trend whereby movies generally have a shorter life span at the box office. Even the biggest hits make most of their money in their first few weeks of release.

While that trend may be good news for distributors, it’s not so good for exhibitors. In splitting the box office returns with theater owners, distributors are guaranteed more favorable terms in the early weeks of a film’s release. Now they’re receiving film rentals--or their cut of the box office--that much sooner.

Sony’s Blake suggests that while the first few weeks of December are problematic for product aimed at older audiences, there’s an upside for opening adult-themed movies around Christmas given the potential level of business that holdover holiday films can generate well into January and February.

Last year, for instance, several movies--including “Michael,” “Jerry Maguire” and “Scream”--had strong December openings and went on to do substantial business after the holidays. In 1995, there were other holdovers with similar success--among them “Jumanji,” “Waiting to Exhale” and “Grumpier Old Men.”

The holidays offer another advantage, Blake says: “There’s less emphasis on who’s No. 1 at the box office, because there’s different audiences available at different times.”

Miramax’s popular genre horror film “Scream” opened last year on Dec. 20 at No. 4 with $6.3 million and went on to gross $103 million by March.

The period, notes Blake, “is a little more forgiving than summer, when you’re almost obligated to open big.”

We’ll see just how forgiving this holiday season will be.