Box Office: 5 Lessons for 2016 From Hollywood’s Record Highs and Lows

Sure, revenue hit $11 billion in the U.S. and set a global mark, but after ‘Jurassic World’ and ‘Star Wars’ are signs of trouble (and China questions). Says one studio chief, “It’s a binary world.”

Box-office revenue may have hit an all-time high in 2015, but that doesn’t mean The Force was with everyone. Disney — home of Star Wars: The Force Awakens — and Universal, with an unprecedented three billion-dollar-grossers in Jurassic World, Furious 7 and Minions, pulled away from the competition while other studios grappled with historic lows.

So while 2015 is “a big shot in the arm of the industry overall,” says MKM analyst Eric Handler, key lessons linger:

1. Plant tentpoles carefully

Combined, Universal and Disney controlled more than 41 percent of U.S. market share and more than a third of global grosses (Universal amassed a $6.8 billion worldwide total, shattering Fox’s $5.5 billion record, while Disney nearly cleared $6 billion). Disney Studios chairman Alan Horn, who ushered in the era of the Hollywood tentpole when running Warner Bros., now all but forgoes smaller films.

Paramount has come under scrutiny for releasing fewer movies than its competitors, but Disney actually put out the same number as Paramount in 2015 (11). The difference? “Our titles this year were part of the moviegoing culture before they even came out,” says Disney worldwide distribution chief Dave Hollis.

Warners, often the industry leader, was without a superhero or other prebranded tentpole. Studio chief Kevin Tsujihara instead attempted to create new franchises (Pan, The Man From U.N.C.L.E.) and flooded the market with 26 releases, most from financial partners. But it didn’t work, with many bombs, and only San Andreas, from New Line, hitting big.

2. Beware the new lows

“It’s a binary world,” laments Sony Pictures chairman Tom Rothman. Even as movies hit new highs, gone are the days when an eight-figure opening weekend could be guaranteed by a certain star and a robust marketing spend. Now, openings in the $3 million to $5 million range are normal. Robert Zemeckis (The Walk), Sandra Bullock (Our Brand Is Crisis) and Daniel Radcliffe (Victor Frankenstein) all opened movies to historic lows. Adds Fox distribution chief Chris Aronson: “The takeaway is that we have a record year, but it was concentrated among fewer films. The top 10 films in 2014 represented 24 percent of the pie. The top 10 films this year represent 34 percent.”

3. Don’t fight social media

Again and again, prerelease tracking was wrong. “Going to the movies has become all about the social media conversation,” says Imax Entertainment CEO Greg Foster, noting that studios now advertise Rotten Tomatoes scores on Facebook and Twitter.

“Creative remains key, but it’s less about television commercials and more about shaping the social conversation.” Consider Fox’s Fantastic Four: It was tracking fine until director Josh Trank, stung by bad reviews, tweeted on the eve of the release that his version was “better.” The movie quickly died.

4. Year-round scheduling pays off

While Universal’s Jurassic World was an all-audience tentpole, studio chair Donna Langley crafted a diverse slate of 21 films that clicked with different demos at all times of the year, beginning with Fifty Shades of Grey (females) over Valentine’s Day weekend, Furious 7 (men) in late spring, Minions (families) and Trainwreck (couples) in summer and Straight Outta Compton(urban) in August. “Fifty Shades was based on a huge book, but no one was sure if the audience base would be sufficiently motivated,” says Universal distribution chief Nick Carpou.

“Turning it into a Valentine’s Day date-night movie was a masterful stroke on the part of our marketing department.” Similarly, Universal rolled the dice opening Pitch Perfect 2 opposite Mad Max: Fury Road. Prerelease surveys showed both films bowing at $40 million; Pitch Perfect 2lured its female audience and took in $69.2 million, besting Mad Max’s $45.4 million.

5. Learn to love (and hate) China

As China becomes the world’s largest movie market, many assume Hollywood studios will benefit. But 2015 showed it’s tougher than ever for outsiders to secure prime release dates and keep films on screens. Even as China revenue jumped a staggering 49 percent to $6.77 billion, U.S. market share fell from 45.5 percent in 2014 to 38.4 percent. State regulators are more intent than ever to promote local fare, imposing blackout periods and maintaining a quota system. For instance, Minions and Pixels opened within two days of each other and only one week after Mission: Impossible — Rogue Nation. And in December, The Martian lost screens more quickly than expected, topping out at $94 million. Only three U.S. films landed on China’s top 10 chart — Furious 7 (No. 2, $372.6 million), Avengers: Age of Ultron (No. 4, $224.9 million) and Jurassic World (No. 6, $216.2 million). Like everything about the 2015 box office, it was feast or famine.

Records Broken (Bad and Good)

Highs and lows rewrote the rules for what’s possible at the multiplex.

Blackhat (Universal)

Chris Hemsworth’s thriller had the lowest domestic gross for a film that cost more than $70 million and opened in 2,000-plus theaters: $8 million

October Blood Bath

Domestic box-office revenue for Halloween weekend came in at $74 million, the year’s worst showing and the lowest grossing Halloween since 1999. The ghoulish holiday capped a dismal month littered with several bombs (including Our Brand Is Crisis, The Walk and Burnt).

Star Wars: The Force Awakens (Disney)

– Top domestic opening weekend of all time: $248 million (bests Jurassic World’s $208.8 million)

– Top worldwide opening of all time: $529 million (bests Jurassic World’s $524.9 million)

– Fastest film to $700 million domestically: 16 days (bests Avatar’s 72 days)

Universal

– Biggest year domestically: $2.4 billion

– Biggest year internationally: $4.4 billion

– First studio to see three films cross $1 billion globally during the same year

Victor Frankenstein (Fox)

– Worst opening for a major-studio release in 2,500-plus theaters: $2.5 million

We Are Your Friends (Warner Bros.)

– Worst opening for a Warners film in 2,000-plus theaters: $1.8 million

Detailed infomatics here:

www.hollywoodreporter.com/news/box-office-5-lessons-2016-852391

by Pamela McClintock – THR – 6/1/2016

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