MPAA: Movie attendance dips, but so do costs

Coming off the second year that theater admissions remained in a relative slump, Hollywood got some good news Tuesday morning: The average cost of making and marketing a movie dipped below $100 million.

Making his debut here at ShoWest, Dan Glickman, the new president and CEO of the Motion Picture Assn. of America, reported that the cost of putting out a movie declined to $98 million in 2004, down 5% from the industry peak of $102.8 million the year before. The savings came almost entirely from marketing, as production costs remained fairly steady at an average of $63.6 million per movie, down just slightly from the year before. Marketing costs dropped almost 12% to $34.4 million from $39 million.

Even with the number of tickets sold down 2.4% to just under 1.54 billion on top of a 3.7% drop the year before, Glickman emphasized that it was the third consecutive year that more than 1 billion tickets were sold and that’s an increase over the past 10 years of 20% overall.

From a global perspective, the picture is much brighter. Movies grossed about $14.9 billion in the international market last year, while the MPAA’s U.S. total is $9.54 billion. It was the third year that foreign box office has surpassed domestic, and by far the widest margin yet. Worldwide grosses are up 24% from 2003, according to MPAA statistics.

Admissions also were up significantly in many overseas markets, about 5.9% overall but as high as 20% in France, for example, Glickman told a group of international theater executives the day before.

Glickman went on to cite China, Russia, Brazil and Mexico as markets that remained ripe for growth.

Drawing on his experience negotiating trade agreements with the Chinese as secretary of Agriculture under Bill Clinton, Glickman said he would be devoting considerable energy to persuading Beijing to go beyond token gestures and open the country’s theatrical market to the U.S. in meaningful ways, not only to cinema but to other forms of entertainment such as concert tours.

Glickman said he had spent the first six months of his tenure learning as much as he could about issues the MPAA faces and that piracy remains at the top of the list.

His research brought home the issue on a personal level. Just last week in Mexico City, he observed firsthand at what he described as the largest flea market in the world more than 400 stalls selling counterfeit DVDs, CDs and the equipment used to produce them.

One illegal DVD in particular caught his eye -- “The Pacifier.” The film, which was produced by his son, Jonathan Glickman, had not been in theaters even a week.

Echoing a bit of the hyperbole employed by his predecessor, Jack Valenti, Glickman described piracy as “the dagger in the heart of this business.”