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‘Monsters,’ ‘Furious’ Chases Help Studios Buck Slump (Update2)

By Michael White

April 23 (Bloomberg) -- Hollywood is heading toward its first $10 billion year at the box office, scoring with moviegoers during the recession by pulling films from the crowded summer schedule and releasing them in theaters earlier.

Ticket sales this year have gained 17 percent, according to Media By Numbers LLC, an industry researcher. Five movies have topped $100 million in sales, compared with one a year earlier, according to Box Office Mojo LLC, a competing tracking service.

The result is the fastest growth since 2002, according to Box Office Mojo, which puts this year’s gain at 14 percent. Films such as “Monsters vs. Aliens” are convincing studios the first quarter has more revenue potential, and may explain why ticket sales are increasing when U.S. joblessness is at a 25- year high.

“It’s great news when pictures like ‘Mall Cop,’ ‘Taken’ or ‘Fast & Furious’ work” outside summer and Christmas months, Jeff Blake, vice chairman of Sony Pictures Entertainment, said in an interview. Studios are looking to “put pictures in other months of the year.”

“Monsters vs. Aliens,” the 3-D comedy from DreamWorks Animation SKG Inc., is the top 2009 film with $164.8 million in sales as of yesterday, according to Burbank, California-based Box Office Mojo. The movie, about monsters protecting Earth from aliens, was originally set for late May and was moved to avoid competing with James Cameron’s “Avatar.”

Three previous “Fast & Furious” street-racing films from General Electric Co.’s Universal Pictures were summer releases.

Movie Slates

Based on the success of the comedy “Paul Blart: Mall Cop,” which has taken in $144.7 million in U.S. theaters, Sony rescheduled an Adam Sandler comedy for March 2010.

“It’s really what otherwise would have been a summer comedy,” Blake said.

News Corp.’s Fox, whose suspense thriller “Taken” with Liam Neeson has generated U.S. sales of $142.2 million since Jan. 30, moved “The Tooth Fairy,” starring Dwayne Johnson, to January 2010 from November 2009. “Date Night,” with Steve Carell and Tina Fey, opens in April 2010, and “Percy Jackson,” starring Uma Thurman and Pierce Brosnan, is set for February, according to Gregg Brilliant, a studio spokesman.

“When we get into tough economic times this industry has shown the ability to be very resilient,” Michael Campbell, chief executive officer of Regal Entertainment Group, the world’s largest theater chain with 6,782 screens, said in an interview. “I’m not going to say any industry is recession proof, but we’re certainly recession resilient.”

Good Times, Bad Times

From the Depression on, Hollywood has a mixed record coping with economic slumps, doing well in years when there’s a strong slate of pictures and stumbling other times.

Americans at first flocked to theaters after the 1929 stock market crash triggered America’s worst depression. Ultimately, the sinking economy took Hollywood with it as average weekly admissions plunged by a third over two years to 60 million in 1932 from 90 million in 1930, according to Media By Numbers. Fox Film Corp., Paramount Pictures Corp. and RKO Radio Pictures Inc. filed for bankruptcy. Warner Bros. had to sell assets, according to the Schirmer Encyclopedia of Film.

“The bottom fell out of the movie business,” Leonard Maltin, a film critic and historian, said in an e-mail.

Ticket sales also fell in 1949, 1953 and 1957, the first three recessions after World War II. Revenue declined again in 1980 and 1991, both years the economy slumped.

Sony Corp., based in Tokyo, gained 35 cents to $25.88 at 4:01 p.m. in New York Stock Exchange composite trading. New York-based News Corp. fell 11 cents to $7.67 and Regal, based in Knoxville, Tennessee, rose 23 cents to $14.07.

Fond Memories

Sales are showing the same strength in the current recession that they demonstrated in the 1973-75 and 1981-82 slumps, the two longest since World War II.

Attendance has increased 15 percent through April 19, according to Media By Numbers. Ticket sales this year may reach $10 billion, estimates the Los Angeles-based researcher’s president, Paul Dergarabedian.

Many of today’s studio executives came of age in the 1970s and 1980s. U.S. box-office revenue rose 25 percent in 1974, during the Arab oil embargo, and another 11 percent in 1975, years that included “Blazing Saddles,” “Godfather II” and “Jaws,” the all-time leader in its day. Revenue jumped 7.7 percent in 1981, when “Raiders of the Lost Ark” was released, and 16 percent the next year, led by another all-time leader, “E.T.: The Extra Terrestrial.”

Technological Boost

A more severe or extended economic slump may make it hard for Hollywood to continue the winning streak, Jan-Christopher Horak, a film professor at the University of California-Los Angeles, said in an interview.

People have more at-home entertainment options, including the Internet, cable television and video games, Horak said.

There are parallels to 1929, including the use of technology to bring in audiences, as Hollywood did with the first talking pictures back then. Studios are releasing more than a dozen 3-D films this year, charging higher prices for an experience that can’t be duplicated at home.

Studio executives are aware the current surge may not last.

“If anyone has champagne, let’s keep it corked for now,” Jim Gianopulos, co-chairman of News Corp.’s Fox Film Entertainment, told an exhibitor conference in Las Vegas in March. “Obviously the economic downturn is quite serious and will affect every aspect of business.”

To contact the reporter on this story: Michael White in Los Angeles at mwhite@bloomberg.net

Last Updated: April 23, 2009 16:03 EDT

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