The Reel Blog

Nobody wants an economic downturn, but since it seems we're in one, everybody seems to be wondering how the movies will do.

It comes as no surprise to theater owners that hard times send people to movie theaters. Movie-going remains the least expensive form of out-of-home entertainment, as these charts show:

But wait, there's more, considering your ticket dollar in terms of time spent:

Source: ¹Intl’ Laser Tag Assn.    

Source: ²United States Bowling Congress / Mischel & Co. (ave. price/open game)

Source: ³NATO

The L.A. Times weighs in with the tantalizing suggestion, " If you're struggling to pay the bills, why not let Angelina Jolie take your worries away?"

Marketplace follows with an on-air interview on the subject with yours truly.

 And the Times of London speculates on the forthcoming summer season with an economy in the doldrums:

“In the past four decades there have been seven recession years in this country, and box office climbed strongly in five of those years,” said John Fithian, the president of the National Association of Theatre Owners.

“Consumers cut back on expensive purchases during recessions but also typically shift what discretionary spending money they have left to affordable activities, such as going to the movies.” This economic anomaly was first observed during the Great Depression, when even the Dust Bowl refugees used what little money they had to pay for admissions to monster movies and Marx Brothers comedies.

 Let us know: where will you be spending your money this summer?

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Michael Brush, financial analyst for MSN Money, takes a historical look at box office performance during hard times and, despite what some analysts conclude, comes up with some hard numbers:

Some industry analysts, including Hal Vogel of Vogel Capital Management, dispute the link between economic pullbacks and rising movie attendance. But for me, the evidence is strong:

• In 1974 and 1975, as the economy contracted 0.5% and 0.2%, respectively, after 5.8% growth in 1973, the annual box-office take rose 25% and 11% as Americans sought refuge from reality in hits like "Jaws," "The Towering Inferno" and "Blazing Saddles." Movie-theater attendance rose 16.9% in 1974 and 2.2% in 1975.

• In 1982, the economy contracted 1.9%, after 2.5% growth in 1981. Box-office takes shot up 16.4% as hits such as "E.T.: The Extra-Terrestrial" and "Porky's" offered escapes. The number of moviegoers was up 10%.

• In 2001, economic growth slowed to 0.8% from 2000's 2.7%, but box-office spending on movies such as "Monsters, Inc.," "The Mummy Returns" and "Ocean's Eleven" rose 9%. This was also the year the "Harry Potter" and "Lord of the Rings" film franchises were launched. Then, the box-office take rose 14% in 2002 as economic weakness lingered, growing only 1.6%. Movie-theater attendance went up 4% in 2001 and 11% in 2002.

All told, box-office spending went up during five out of the seven recessions or pullbacks over the past 40 years, according to the National Association of Theatre Owners. The pattern is so consistent that you can't write it off by saying moviemakers just happened to release better films.

If it is not the particular mix of films that accounts for the upswing in box office during recessions, what does? Sony's Jeff Blake suggests

"Movies offer something completely separate from what you are dealing with day to day. So they really become worth the money when money counts."

Lionsgate's Michael Burns concurs, saying

"When things are tough it is nice to be able to go into a dark theater and get lost in great entertainment, to be moved or scared and all those great things."

So weigh in if you're so inclined. Why do movies do well in bad economies? Is it the movies? The price? A desperate need to escape a stack of bills on the kitchen table?

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Nobody wants a bad economy, but movie theaters are well positioned to do well in tough economic times. In five of the seven recession years over the last four decades, box office revenues have gone up - as much as $670 million in one case. And it's not hard to see why:

Click the image to watch CNN's Brooke Anderson report on why movie theaters do well in recessions. Interviews with NATO President and CEO John Fithian and Media by Numbers' Paul Degarabedian are included. 

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Disney's 3D concert feature "Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour" set box office records ovewr the weekend. It's $29.1 million bow was the highest ever for a super bowl weekend, for a 3D film and for a film opening in less than 1,000 venues.

According to Variety, Disney intends to extend the one week limited release another week, and possibly two in some markets.

The weekend, aided by strong grosses from Oscar nominees, was up 37% over the same weekend last year. It is the seventh consecutive up weekend. YTD box office is running 19% ahead of 2007 and admissions are up approximately 13%.

 So is 3D for real? It is this weekend.

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The Academy of Motion Picture Arts and Sciences has announced the nominees for the 80th annual Academy Awards.

***UPDATE***

Variety and The Hollywood Reporter both take notice of the expanded box office possibilities of the Oscar-nominated films. This year is a bit unusual for the number of films still in release.

Here are the big ones (the ones in bold are still in movie theaters):

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Focus Features' head and Lust, Caution screenwriter James Schamus was interviewed on KCRW's The Business this afternoon and calmly and genially eviscerated every myth surrounding the NC-17 rating.

A few highlights:

• Very few newspapers have refused ads for the movie.
• Television advertising and standards & practices execs are eager to work with them should Focus choose to advertise on TV.
• The two difficulties he cites are audience perceptions of a stigma surrounding the rating, and a single major theater chain that has a blanket policy against screening NC-17 films.

I highly recommend you listen. His take on the process is refreshing, light-hearted and hypocrisy-free.

The film has taken in $1.3 million through its third weekend in release and is playing in 77 locations in the top 20 markets.

Update: Two newspapers weigh in on Lust, Caution and NC-17.:

The Naperville Sun in Illinois wonders whether the film will play in the suburbs. The upshot?

In either case, it seems to be the audience, not the theaters, that will determine if an NC-17 film will be played in local venues. Like any other foreign, independent or art film, they will show it - but only if you come.

In the Hartford Courant, NATO president John Fithian continues his campaign for broader acceptance of the rating:

Fithian's support for the rating is a matter of integrity.

"A lot of studios just require their filmmakers to produce a film that is not an NC-17. We think that is a mistake. By not using the rating appropriately, the pressure to cram films into the R rating is too great," Fithian says. "What we see is filmmakers making just enough cuts in their movie to fit into an R.

"This damages the integrity of their movie and is a potential abuse of the rating system," he continued. "As a consequence, the R rating is too broad. The soft end of R and the hard end of R are too different. If NC-17 were used correctly, ratings would make a lot more sense."

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Halloween took in a record $31 million over the three-day weekend, according to the Hollywood Reporter.

The holiday weekend gross for the top-ten films was up 26% over last year's total. The weekend itself set a record for the time period.

To round things off, summer 2007 set a box office record, topping $4 billion for the first time and ending with an estimated $4.3 billion.

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Superbad stayed on top of weekend box office for the second weekend and summer box office topped $4 billion for the first time ever. According to AP:

Overall, Hollywood crossed the $4 billion mark for the summer season. The figure topped the $3.95 billion set in 2004, according to box office tracker Media By Numbers.

Movies will have grossed about $4.15 billion by the time the season ends on Labor Day, up 8 percent from last summer, estimated Paul Dergarabedian, president of Media By Numbers.

That's an impressive feat by any measure, but must be tempered with the knowledge that part of that record haul is due to ticket price increases.

Factoring in higher admission prices, Media By Numbers estimated about 606 million movie tickets will have been sold this summer - a solid figure but only the sixth-best for modern Hollywood.

The best summer in recent times was in 2002, when 653.4 million tickets were sold.

Ticket prices do not account for the remarkable late summer surge, however. According to The Hollywood Reporter, the past weeks's box office - not including the weekend - total boxoffice amounted to $204.1 million, up 24.6% over the comparable week last year. As of Thursday, the year-to-date boxoffice stood at $6.76 billion, up 7.8% over last year's $6.27 billion.

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Superbad took top honors at the weekend box office, pulling in an estimated $31.2 million. That's better than the $30.6 million opening numbers for Judd Apatow's other summer sex comedy hit Knocked Up's opening. Knocked Up looks likely to finish up with around $150 million.

According to the L.A. Times, predictions for a $4 billion dollar summer look increasingly likely to come true. The surprising performance of July and August films in addition to the expected box office haul in May have pushed receipts to $3.83 billion - certainly within striking distance of 2004's record $3.95 billion.

Ticket price increases account for some of the gains:

Attendance is the strongest in three years but running behind the 2002-2004 period.

This summer will end up with about 600 million tickets sold, Media by Numbers projects, well shy of the record 650 million from summer 2002. That year the original "Spider-Man" and "Star Wars: Episode II" led the way.

Box office was up 17.3% this weekend over the same period last year, the sixth straight weekend box office has exceeded the previous year.

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