Analyst says Box Office set for record in 2007
- From: Garondo Marondo <Classic.Mr.Hole@xxxxxxxxx>
- Date: 16 Apr 2007 21:24:00 -0700
http://news.yahoo.com/s/nm/20070416/en_nm/record_dc;_ylt=AirtdYIhn2drNMzHQ6Gdq01b.nQA
By Paul Bond
LOS ANGELES (Hollywood Reporter) - U.S. box office sales ought to tip
the scales at slightly less than $10 billion this year, an all-time
record, followed by a couple years of anemic growth as higher ticket
prices offset declining attendance.
That's the word from Wedbush Morgan Securities, which issued a 40-page
report Friday on the state of the movie theater business. Wedbush
concludes that the dour predictions of new technologies dooming
theaters were overblown and reiterates that it was the poor quality of
movies that caused exhibition revenue to stagnate, or worse, from
2003-05.
"Consumers are showing, through their continued attendance, that pay-
per-view, DVDs and streaming media may be increasingly close
substitutes for a movie-watching experience, but they are not as close
of a substitute for an evening out," Wedbush analyst William Kidd
wrote.
Consumers with the most entertainment gadgets and services also are
the ones who go to movie theaters most often, according to Nielsen
Entertainment/NRG data.
For example, among moviegoers who see an average of 10.5 films in
theaters each year, 46% of them are Netflix subscribers and 68% have a
home theater. Among those who see just 7.1 movies in theaters each
year, 16% subscribe to Netflix and 16% have home theaters.
The ultimate movie-watching experience is the theater, according to
63% of moviegoers, while only 37% prefer the home.
Last year, the U.S. box office grew 5.5% to $9.5 billion, reversing a
downtrend. This year, Wedbush expects it to rise 5.2% to $9.98
billion, surpassing the record $9.54 billion set in 2004. (So far in
2007, sales are up 6.4 percent over the year-ago period, according to
Media By Numbers.)
Like 2004, this year will boast movies featuring such lucrative
characters as Spider-Man, Shrek and Harry Potter. Three other upcoming
sequels, "Evan Almighty," "National Treasure 2" and "The Bourne
Ultimatum," also had predecessors last seen in 2004.
Also helping this year's movie crop to outdo 2004, Wedbush predicts,
will be "Pirates of the Caribbean: At World's End," "Ratatouille,"
"Transformers," "The Simpsons Movie" and "His Dark Materials: The
Golden Compass."
Additionally, the price of a movie ticket might rise about 50 cents
from where it was in 2004, judging from recent trends, and there's no
evidence suggesting that such a rise will keep people from theaters.
May and June, in particular, with so many potential blockbusters being
released in succession, presents "a high-class problem for
exhibitors," Kidd said. "Even avid moviegoers could find it difficult
to go to the movies for six weeks straight."
Kidd said that, in hindsight, it should have been obvious that it was
poor films causing a box office slump of late, more than it was the
fault of new technologies that encouraged home viewing of movies.
He cites such evidence as weaker composite film-critic ratings for
2003-05, plus the fact that the slump during those years also plagued
parts of the world where new technologies weren't much of an issue.
"When the international markets struggled in tandem with the domestic
markets, we felt it was an overt sign that film quality was an issue,"
he said.
Often-noted challenges to the exhibition industry, such as shrinking
distribution windows and VOD, shouldn't do as much harm as previously
thought, as long as the quality of movies remains high, Kidd said.
Other initiatives that ought to keep the revenue flowing to
exhibitors, Kidd said, include in-theater advertising and 3-D movies,
the latter of which is being championed by several prominent film
executives, like DreamWorks Animation CEO Jeffrey Katzenberg.
Kidd also calls "novel" an idea from Walt Disney Co. CEO Robert Iger
of selling DVDs of family titles right in the same theaters where
those movies are playing, and cutting exhibitors in on the revenue.
Such a plan could cause exhibitors to warm to the idea of a collapsed
DVD window, under the right circumstances and for the right titles.
All this bullishness is causing Kidd to recommend investors buy stock
in Regal Entertainment Group. Shares of the nation's largest theater
chain closed at $20.82 on Friday, and the analyst has a $24 target on
them. And last week, Soleil Research Associates upgraded its opinion
of Regal shares to a "buy," in part based on their expectations of big
box office this year.
Investors and analysts with renewed confidence in the sector also have
encouraged public offerings of other exhibitors. Scheduled for April
23 is the IPO of Cinemark Holdings, owner of the nation's No. 3 movie-
theater chain, and AMC Entertainment is also expected to go public
this year.
Reuters/Hollywood Reporter
.
- Prev by Date: France hoping to lure tourists via Hollywood
- Next by Date: "Bean" sequel bounces back at overseas box office
- Previous by thread: France hoping to lure tourists via Hollywood
- Next by thread: "Bean" sequel bounces back at overseas box office
- Index(es):
Relevant Pages
|
