Big Events Planned, but Will Viewers Come?

With the nation under an economic cloud just as the year’s heaviest moviegoing season gets under way, any worries at the major studios are not centered on the fear that a downturn will cause a chill at the turnstiles.

Of greater concern is whether the lineup of expensive releases will maintain momentum through Labor Day. Last year, the summer lost steam as it went along, leading to an attendance slump that lasted until the Christmas season.

A look back at the last recession, in 1991-1992, shows that those were the two lowest-grossing summers of the decade, despite the presence of such major hits as “Terminator 2: Judgment Day” and “Robin Hood: Prince of Thieves” in 1991 and “Batman Returns” and “Lethal Weapon 3” the following year. The summer of 1990 generated $1.8 billion in ticket sales. But the following two summers declined to $1.7 billion and $1.63 billion respectively. When the annual ticket price inflation of 3% to 5% is factored in, the drop in attendance was even sharper.

However, by the summer of 1993, and the start of the economic boom, each successive summer through the rest of the decade brought in more than $2 billion.

There are no clear indicators that there is a recession--at least at movie theaters. “We usually only discover there’s a recession in hindsight,” says Tom Borys, president of the A.C. Nielsen/EDI box office tracking service. “So far, this year has been running more than 10% ahead of last year, and the summer looks to be very strong.”

The movie business may have already seen its reversal in the middle of last year, when attendance and grosses went into decline. After a strong start to the summer with the “Mission: Impossible” sequel, subsequent movies failed to sustain attendance throughout the season, contributing to a softer than usual fall, since under normal circumstances the hits of late summer would continue to generate income into the autumn months. The arrival of the holiday season reinvigorated ticket sales, thanks to such major hits as “Cast Away,” “Dr. Seuss’ How the Grinch Stole Christmas” and “What Women Want,” among others.

The early part of 2001 was gangbusters with year-end releases “Crouching Tiger, Hidden Dragon” and “Traffic” going on to gross more than $100 million and “Hannibal” and “Spy Kids” providing a bridge to the early part of May, when the summer heavy hitters began to roll out.

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Theaters and studios traditionally define summer as lasting from Memorial Day weekend through Labor Day weekend. But the season has become so crowded that summer-style blockbusters have been arriving earlier each year.

The May 4 debut of “The Mummy Returns” at $68 million started the season on a bright note, and has earned $146 million to date. “Shrek,” which opened nationally on Friday, is also off to a great start with an estimated $42.1 million over the weekend.

Even when the nation is in a belt-tightening mood, the movie business is not always adversely affected, points out Larry Gleason, president of marketing at MGM. In addition to movies still being a relatively inexpensive form of entertainment, in times of economic woe, “people tend to take fewer and shorter vacations,” says Gleason, which makes them more available to go to the movies.

“It’s not that we’re recession-proof,” says Chuck Viane, senior distribution executive for Disney, “but it’s the movies more than the economy that will determine how good the summer’s going to be.”

And this summer is heavily peppered with event-style titles including high-profile original movies like “Shrek,” “A.I. Artificial Intelligence,” “Pearl Harbor” and the re-imagined “Planet of the Apes,” and sequels to past blockbusters like “The Mummy” and “Scary Movie” that virtually guarantee a high level of anticipation.

“In the early ‘90s there were maybe one or two blockbusters every summer,” says Jeff Blake, who heads marketing and distribution at Sony Pictures, “this year there’s one almost every week.”

“Even in a recession big movies do well. It’s the smaller movies that get hurt,” adds Tom Sherak, former Fox senior executive and now a principal in Revolution Studios.

While the fate of original movies is hard to predict, sequels normally follow a rule of thumb, according to Sherak, grossing 60% to 65% of the previous film’s total. That means “Jurassic Park 3” can be expected to gross at least $140 million (“The Lost World: Jurassic Park” took in almost $230 million). Occasionally, a sequel will out-gross the original, as was the case with “Austin Powers: The Spy Who Shagged Me,” which more than tripled the domestic gross of its predecessor, taking in $205 million. “The Mummy Returns” should easily outdistance the $153 million grossed by its predecessor based on the $120 million or so it’s collected in only two weeks.

Sequels, of which there are another half-dozen due this summer, are expected to provide a solid base on which to build in a season in which the film industry clocks more than 40% of its annual admissions. After an extraordinary $3.1-billion summer in 1999 (when “Star Wars: Episode 1 The Phantom Menace,” “The Sixth Sense” and the Austin Powers sequel led the way), last summer came in at $2.95 million, according to another box office tracking service, Exhibitor Relations, making it still the second-best summer ever.

The only possible downside is if the original movies released this summer are so strong that they cut into repeat business of sequels. “There’s certainly an argument for that,” says EDI’s Borys. EDI figures show that sequels account for 10% of the total for more than 700 wide-release films in the most recent five-year period. Although sequels tend to open stronger than the originals, their fall-off can be precipitous.

The proof will be in the pudding, according to Marc Shmuger, vice chairman of Universal Pictures, which has a sequel-heavy summer with “The Mummy Returns,” “Jurassic Park 3” and “American Pie 2.” He cautions that it’s easy to underestimate the power of a franchise. The original “Mummy” proved to be a much bigger hit than the studio anticipated, and the sequel has built on that.

As for “JP3,” audiences’ fascination with dinosaurs seems to be solid (last summer’s Disney film “Dinosaur” grossed $135 million). And, Shmuger says, rumors of the demise of raunchy teen sex comedies like “American Pie” may be exaggerated.

With at least two major titles debuting every weekend through mid-August, depending on how audiences respond, “the schedule has a continuity that is strong throughout the season,” says Viane. As happened over the holiday season, audience satisfaction on the top films was so strong that it created a snowball effect in general attendance.