Films’ Big Openings Fade Fast, but Studios Cash In

Week after week this summer, Hollywood’s blockbuster movies have opened to the kind of eye-popping numbers that get breathlessly splashed across TV and newspaper reports.

Often exceeding $40 million, the numbers come packaged with the kind of arcane statistical records Hollywood compiles, such as: best Wednesday ever (“Jurassic Park III”), highest-grossing non-sequel ever (“Pearl Harbor”), best August opening ever (“Rush Hour 2”) and second-best three-day total ever (“Planet of the Apes”).

Then the movies seemingly disappear as the box office numbers abruptly plunge by half and audiences turn to next weekend’s big film as easily as they flick the TV remote control.

It’s called “front loading,” a growing industry trend in which unprecedented proportions of a film’s box office take are generated the first weekend, followed by a virtual free fall a week later. With Hollywood’s summer movie season nearly over, 2001 has emerged as a watershed year for this trend, thanks to saturating marketing campaigns and a glut of huge theater complexes where fresh showings of a new blockbuster often come just half an hour apart.

For the first time, Hollywood’s summer films, on average, lost half of their opening business within a single week, a previously unheard-of level. A decade ago, films saw their sales slide only about 35% by the second week.

“This seems to be a major phenomenon. It’s like audiences are migrating each week from one blockbuster to another,” said Paul Dergarabedian, president of the Exhibitor Relations box office tracking firm, which compiled the sales figures.

Last weekend, the box office gross for “Planet of the Apes” fell 60% after the film’s staggering $68.5-million debut just one week before. Earlier this summer “Jurassic Park III” dropped 56% after it reaped $50.8 million its first weekend. And “The Mummy Returns” saw its take cut in half one weekend after it sold $68.1 million in tickets in its debut.

The instant box office phenomenon doesn’t mean Hollywood’s overall take is suffering, especially because grosses have been boosted by higher ticket prices. Dan Fellman, Warner Bros. distribution chief, predicts that the $2.7-billion summer record set in 1999 will soon fall.

The big difference this year: “People have got to see the movie the first weekend they can. After that, the frenzy is over,” Fellman said.

For studios, compressing much of the eventual box office take into the first couple of weeks provides a financial windfall. That’s because studios initially get a bigger cut when they split the proceeds with theaters, ostensibly to help defray costs of marketing the movies and manufacturing the film prints. On average, the studio percentage the first weekend can run from 70% to nearly 80% for a big-grossing movie.

As a result, front loading is pummeling ailing movie theater chains, exacerbating already tense relations between Hollywood and exhibitors over how they split the pot. While the chains do sell more popcorn, candy and soda when crowds are packing theaters, it’s not enough to offset what they are losing at the box office, said John F. Fithian, president of the National Assn. of Theatre Owners trade group.

“The downside is [that] the second and third week drops we see now are fairly unprecedented,” Fithian said.

Last month, Loews Cineplex, operating under Chapter 11 of the U.S. Bankruptcy Code, blamed part of its problems on the shorter runs of films, which it said are resulting in “increased film cost percentages” paid by movie exhibitors to studios, according to documents filed with the U.S. Securities and Exchange Commission.

In a similar May filing with the SEC, the Carmike Cinema chain, also operating under bankruptcy protection, disclosed that one of its major problems is “movie studios getting a larger portion of box office receipts due to shorter run times.”

Over time, the ticket sales split between studio and theater chain drifts closer to 50-50. But these days, films often have played out by the time that happens.

Some critics have suggested that the sales drop-off also can be blamed on the quality of the summer fare. Indeed, some movies, notably the critically acclaimed “Shrek,” have defied the trend by not dropping at all and continuing to play strongly for weeks. But most films are following the same scenario of making a big splash, followed by a big dip.

This weekend, New Line Cinema’s “Rush Hour 2,” which opened to $67.4 million last weekend, faces the same test. Early indications are that the movie is holding up well and may defy the trend. One reason is that its fresh competitor, the raunchy comedy “American Pie 2,” carries an R rating, which will limit its teenage audience in an era when government pressures have theaters cracking down on underage youths trying to see R-rated movies.

But even a drop of 50% this weekend would still mean a box office gross of about $33 million for the “Rush Hour” sequel, the same amount the first “Rush Hour” movie opened to when it debuted in 1998, notes David Tuckerman, New Line’s domestic distribution president.

Theater chains have themselves partly to blame. A building boom of huge cinema complexes caused the number of screens to soar to 38,000 in the United States last year, compared to 27,000 five years earlier.

Hollywood was more than eager to accommodate, releasing as many as 6,000 prints of some movies to fill theaters on opening weekends. The result has been that as many as four or five screens at a single complex play the same blockbuster, and anyone who finds a movie sold out only needs to grab a quick cup of coffee before the next show begins.

“Years ago, if you went out on a Saturday night and the movie was sold out, you had to see something else or go out to dinner. Today, all hot items are showing on four or five screens at a theater,” Fellman said.

Veteran movie distribution executive Tom Sherak also blames the glut of theaters for eroding “clearance,” the agreements studios and theater owners had to space the screening sites of films an average of six miles apart so the movies wouldn’t be playing in the same neighborhoods.

“Now, they play a mile and a half away from each other,” said Sherak, who is a partner is Revolution Studios film company.

Industry executives believe that the only way theaters can regain leverage will be to close unprofitable theaters, which will force studios to compete more for prime locations and offer better terms. Indeed, the number of theaters last year fell by 2,500.

But officials also note that the challenge is more complex, because audiences now expect to see films immediately instead of having to wait a week.

“This is the way things are. This is the way the industry behaves, and we need to come up with a business arrangement to correspond with that audience behavior,” said Richard J. King, spokesman for theater giant AMC Entertainment in Kansas City, Mo.