Moviegoing’s overseas slump

It’s the movies, stupid.

American moviegoers aren’t the only ones AWOL from the cineplexes this year. As the domestic box office remains mired in the longest slump in 20 years (now 18 straight weeks), international moviegoing, after a phenomenal year in 2004, is reflecting similar patterns. Overseas, the box office has slid by as much as 14% in some major markets.

Whether it’s because consumers are distracted by the Internet, DVDs, videogames and ever more sophisticated mobile devices -- or something as simple as warm weather, as has been the case in some key European markets -- it’s clear that people around the globe are not going to the movies as much as they have in recent years.

Even if this downturn is just a cyclical blip rather than a foreshadowing of real structural change in moviegoing habits, the brewing international slump is bad news for the Hollywood studios. According to international distribution experts, the foreign gross now accounts for about 50% to 60% of the box office.

Just how bad is it? According to figures from Nielsen EDI, which tracks box-office performance, grosses in Germany are down 14%. In Spain, they’re down 9%, and in Australia they’re down 11%.

In France, where people might prefer lounging in cafes to watching Americans blow up cars on-screen, admissions are down 13%. In Japan, grosses for Japanese films have dropped 10%, while box office for American product has plummeted 25%, said Veronika Kwan-Rubinek, president of international distribution for Warner Bros.

In fact, the Motion Picture Assn., which tracks international box office for the studios, has sent out a report to its members stating that box office for American fare was down 15% worldwide for the first quarter, according to a top executive who received it. Second-quarter results are unlikely to be any better, as international distributors continue to track declines.

Executives at all the Hollywood studios as well as a variety of international players say the real culprit is lackluster fare, the quease-inducing cinema diet of retreads, remakes and formulaic action movies.

“Primarily, it’s product-related,” said Kwan-Rubinek, citing last year’s international blockbusters, which included “Shrek 2,” “Spider-Man 2” and “Harry Potter and the Prisoner of Azkaban.” “The product has not resonated as much internationally.”

This year, only the latest installment of “Star Wars” looks poised to become a global juggernaut, having already earned $718 million worldwide.

“There is a problem with the American titles,” said Florent Gijbels, chief executive of the Kinepolis Group, which operates theaters in Belgium, France and Spain, including those with state-of-the-art digital technology that is not widely available in U.S. theaters.

Others suggest that the box office is just tumbling back to Earth after its stratospheric performance in 2004, when international grosses surged 47%, leading the industry to a banner $25.2 billion in sales, according to the MPA. (Although Mel Gibson’s “The Passion of the Christ” made $241 million internationally, “Harry Potter” and “Shrek 2” drove the surge.)

“This business has always been cyclical and always will be,” said Andrew Cripps, president and chief operating officer of United International Pictures, which distributes films for Universal, Paramount and DreamWorks. “The problems is ... when people get out of the habit, it takes a stream of good, strong movies to break that [cycle], and I don’t think you can draw any conclusions” from the current decline.

Many cite the arrival of the Steven Spielberg-Tom Cruise sci-fi extravaganza “War of the Worlds” this week as a film that could break the cold streak. Like many big releases, the film will be opening on the same day around the world, a strategy increasingly adopted by the studios largely to thwart piracy.

From Tokyo to New York, Cruise has been barnstorming the world to drum up interest, although it’s unclear whether his increasingly odd media turns (everything from proposing to girlfriend Katie Holmes on top of the Eiffel Tower to his recent spat with “Today” co-anchor Matt Lauer over psychiatry) will affect the box office.

And most executives expect the end of the year to be strong globally, with such would-be blockbusters as Peter Jackson’s “King Kong,” “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe” and “Harry Potter and the Goblet of Fire.”

The domestic box office could certainly use an alien attack to raise it from the doldrums, as overall box office was down again over the weekend, surpassing the previous 17-week record streak of 1985.

“Batman Begins” grossed $26.8 million to lead the weekend. Among new films, “Bewitched” took in an unmagical $20.2 million, according to estimates released Sunday by Sony, while Disney’s “Herbie: Fully Loaded” posted an OK-for-a-kids-picture $17.8 million in its first five days. Universal’s zombie movie “Land of the Dead” grossed an estimated $10.2 million.

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It’s not a way of life

Moviegoing is not as avid a habit in the rest of the world as it is among Americans, who on average attend five films a year. Their counterparts in France, for instance, where there is strong local film production, attend on average only three times a year; in Germany, it’s only 1.9 times a year.

According to all the executives, weather plays a much bigger factor in Europe, which is experiencing a heat wave. “If it gets hot, you can have one weekend, it doesn’t matter what the movie is, they see the sun for the first time, and they’re happy. The following weekend, the weather turns bad, the movie [attendance] can go up a 100%,” said Gary Barber, chairman of Spyglass Entertainment Group, which does extensive international business.

Warner’s Kwan-Rubinek estimated that the first sunny weekend in Germany after three weeks of gloom cut last weekend’s overall box office there by as much as 30%. “We have to remember the days are much longer. It’s bright to 10 or 11 at night, and people like to spend a lot of time in cafes and go out and experience the outdoors,” she said.

Other factors -- such as rampant DVD piracy -- affect global moviegoing much more strongly than in the U.S., where it’s been more controlled. For instance, while the U.S. recently adopted federal legislation that outlaws the use of camcorders in theaters, other countries have not yet followed suit.

“We have no comparable camcorder law,” said Timothy Richards, chief executive of the exhibitor Vue Entertainment, a leading theater chain in the U.K. His company uses infrared night-vision binoculars to detect illegal recordings in its theaters. “We catch a lot of people, but the police can’t do anything. We can’t even take their tape, at least not legally. It’s really frustrating.”

Still, many of the same trends affecting the U.S. box office are also evident worldwide. Paul Hanneman, executive vice president of sales and strategic planning for Fox International, pointed to a global trend of youth drifting toward other forms of entertainment.

“They’re multitasking, watching TV, on the computer, talking on the telephone all at the same time,” he said. “Maybe going to the cinemas doesn’t offer that instant access. We do need to be aware that the dynamics of the business seem to be changing and figure out what we need to do to adapt to that going forward.”

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Box Office

Preliminary results (in millions) based on studio projections.

*--* Movie 3-day gross Total Batman Begins $26.8 $121.7

Bewitched 20.2 20.2

Mr. & Mrs. Smith 16.8 125.4

Herbie: Fully Loaded 12.8 17.8

Land of the Dead 10.2 10.2

Madagascar 7.3 160.1

Star Wars III Revenge of Sith 6.3 358.6

The Longest Yard 5.5 141.9

Adventures of Sharkboy & Lavagirl 3.4 30.5

Cinderella Man 3.3 49.6

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Source: Nielsen EDI Inc.