This Just in: Flops Caused Box Office Slump

One of Hollywood’s basic tenets is that when things go wrong it’s somebody else’s fault.

Which is why it’s so startling, suddenly, to hear studio executives and producers taking responsibility for the rows of empty seats in movie theaters this year.

“It’s really easy for all of us to blame the condition of the theaters, gas prices, alternative media, the population changes and everything else I’ve heard myself say,” said Sony Pictures Vice Chairman Amy Pascal, whose summer releases “Bewitched” and “Stealth” flopped. “I think it has to do with the movies themselves.”

After months of hand-wringing and doomsday forecasts about the permanent erosion of moviegoing, the lunchtime chatter at Mr. Chow in Beverly Hills and other industry haunts has turned decidedly inward. Now, four straight weekends of crowded theaters have forced moguls and creative executives to admit in public what they have spent months avoiding: They were clueless about what audiences wanted.

“There’s always a year when the pundits say the movie business is over,” said producer Brian Grazer, whose May release “Cinderella Man” was a disappointment despite strong reviews. “If there’s a movie people want to see, they go see it. I just think we all have to do our best to make better movies.”

Credit a healthy September with showing that people haven’t completely rejected the multiplex. “The Exorcism of Emily Rose” and “Transporter 2” both drew throngs of moviegoers. Last weekend “Flightplan” (also produced by Grazer) and “Tim Burton’s Corpse Bride” pushed the box office 41% above the same weekend in 2004. From Labor Day through last weekend, grosses were 17% above a year earlier.

Nobody is predicting that 2005 will beat last year’s record gross of $9.4 billion and attendance of 1.5 billion, which was driven by such hits as “Shrek 2,” “Spider-Man 2,” “Harry Potter and the Prisoner of Azkaban” and the surprise blockbuster “The Passion of the Christ.” And this weekend may well fall short of a year ago, when the animated comedy “Shark Tale” surged to $47 million.

Still, to date, ticket sales lag behind 2004’s numbers by only 6%, with attendance off 8.7%. Both those numbers are a vast improvement from a string of weekends this spring, when year-to-year comparisons frequently showed double-digit drops.

So much for the irreversible trends that prognosticators have spent months bemoaning. Amid 19 weekends of diminished box office -- a record stretch that started in late February and ended in early July -- many said they believed a cultural sea change was underway. Among the theories: People preferred to consume their entertainment in the comfort of their homes, whether watching DVDs on super-sharp plasma screens, surfing the Internet or playing video games.

In May, Entertainment Weekly pondered whether even George Lucas’ “Star Wars: Episode III Revenge of the Sith” could do battle with the forces keeping moviegoers at bay. “Can Revenge of the Sith Halt a Serious Slump at the Box Office?” the magazine asked in a headline. “Or Are the Movies as Doomed as Darth Vader?”

The movie grossed nearly $400 million domestically but failed to ease Hollywood’s anxiety. In June, an Associated Press-AOL poll found that 73% of adults preferred watching movies at home.

In August, after studios had watched such expensive films as “The Island,” “XXX: State of the Union” and “Kingdom of Heaven” go belly up, Robert Iger, who took over as chief executive of Walt Disney Co. today, speculated to Wall Street analysts that it might even be time to release movies simultaneously in theaters and on DVD.

All along, theater owners said they knew better. Audiences, they contended, were weary of films with lame plots whose advertising campaigns seemed to be better thought out than their story lines. They pointed to such sleeper hits as the documentary “March of the Penguins,” which drew huge crowds via word of mouth without the benefit of splashy marketing, as evidence that if you give them a good reason, people will get in their cars, drive to theaters and pay dearly for a tub of popcorn.

Regal Entertainment Group, the nation’s largest theater chain with more than 6,300 screens, bluntly blamed Hollywood for its lower earnings in its second quarter, citing the steady diet of “unappealing films” that the studios served up.

“It’s the movies, stupid,” said John Fithian, president of the National Assn. of Theatre Owners. “That’s what we’ve been saying all along.”

Now, the studios are fessing up and taking their lumps. Last month, for example, Disney Chief Financial Officer Thomas Staggs explained to investors that the company’s studio operation stood to lose as much as $300 million in its most recent quarter because “in fairness, the difficult results at the studio have more to do with the performance of our titles than the marketplace as a whole.”

The recent improvement in attendance is not being driven entirely by mainstream hits such as “The 40 Year-Old Virgin,” which debuted in August and has grossed nearly $100 million domestically to date. Some smaller movies are also generating steady business, among them the highbrow thriller “The Constant Gardener.”

James Schamus, whose Focus Features released that film, said he thought it might have benefited from being an antidote to months of mediocrity.

“We thought audiences would be so starved for something that wouldn’t be a two-hour assault on your intelligence,” he said.

Bennett Miller, the director of the critically lauded “Capote,” which opened Friday, suggested that Hollywood’s habit of playing it safe makes more-daring films look particularly good by comparison.

“The market creates conventionality and conformity, but that’s not really what people want to see,” he said.

But it’s the potential blockbusters that Hollywood is betting on to help close its box-office gap. Still to come are “Harry Potter and the Goblet of Fire” in November, followed by “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe,” “The Producers” and “King Kong” in December.

“The summer slump really put us into a shortfall,” said Paul Dergarabedian, head of Exhibitor Relations Co., a box-office tracking firm. “It’s heartening that there were four up weekends in a row, and that we have some big films in the pipeline.”