Film Revenues Live Up to Hype

The summer movie season is upon us and hype is in the air. During the heaviest moviegoing period of the year, when approximately 40% of annual film revenues are collected, the studios do everything they can to boast they have the No. 1 movie.

Every Sunday morning from Memorial Day to Labor Day, the studios release estimates of their films’ performances in theaters. Given the excessive nature of the studio publicity machine, can these estimates be trusted to be accurate?

Though there have been abuses in the past, they have largely been erased through a system of checks and balances as well as industry self policing.

Actual figures for any given weekend, which are reported Mondays, rarely vary by more than 5% to 10% from the Sunday estimates, said Dan Fellman, distribution head of Warner Bros.

The variance comes from the fact that, though Friday and Saturday figures are actual, Sunday is always a guess and any of a number of factors can come into play, including weather, film genre, holidays and time of year.

When the estimated gross of two movies is extremely close, studios have been known to play a little one-upmanship, especially if it means that a movie can claim the bragging rights of being No. 1 or even in the top five.

“I can honestly say that the worst situation is when it’s too close to call,” said Jeff Blake, head of distribution and marketing at Sony Pictures.

Yet, the perception that the weekend estimates are bogus persists, largely because of a couple of whoppers reported a few years ago, when the Sunday estimates began to be distributed to the media.

The publicity value of being the weekend’s top film prompted some distributors--up-and-comers like Miramax and New Line, as well as some of the major studios--to embellish the weekend’s results in order to capture headlines.

Those abuses, however, are largely in the past, studio distribution executives say.

“It always amazes me that box office is considered such a murky area,” Blake said. “Show me another business where you can look online on a Friday night and see every one of your competitors’ sales.”

In addition, for the last 25 years, the major studios and independent companies have based their estimates on ticket sales data provided by EDI/Neilsen, an independent tracking service that collects admission totals from the nation’s theater chains on a daily basis, said Tom Borys, EDI’s president.

EDI bases its figures on a sampling of about 90% of the nation’s theaters (about 3,000 movie houses).

“It’s a shame that there’s been an inaccurate perception that box-office estimates are wrong,” Borys said. “It’s utter nonsense.”

It’s rare to have a weekend in which a company’s estimates are wildly out of whack, Borys said.

“The more years of experience you have, the more accurate the reporting [of estimates],” Fellman said. “We’ve developed a sophisticated movie marketing system that lets us project pretty accurately. I’m confident that we report our numbers the best we can.”