Hollywood's 3-D Movies Drive Sales as Fans Resist Prices

Hollywood’s focus on big-budget films and 3-D effects that command higher ticket prices will likely drive box-office sales to a record $11 billion this year even as some fans shun the rising cost of a night at the movies.

A surcharge for 3-D movies may push revenue past last year’s $10.6 billion, Paul Dergarabedian, president of Hollywood.com Box-Office, said in an interview.

Studios and theater owners are looking to holiday-season releases like Time Warner Inc.’s “Harry Potter and the Deathly Hallows: Part I” and Walt Disney Co.’s “Tron” to reverse declining attendance, Dergarabedian said. Attendance is down 1.5 percent this year, while revenue is up 4.1 percent to $7.53 million, according to Hollywood.com.

“We could be looking at the first $11 billion year,” Dergarabedian said. “That doesn’t mean attendance will be up. Maybe the holiday season will be the savior.”

Revenue for the summer season, from the first weekend in May through the U.S. Labor Day holiday, is forecast to reach a record $4.35 billion, Hollywood.com said yesterday. Attendance will drop to 552 million tickets sold, the fewest since 540.3 million were purchased in 1997. Theaters charge an extra $3 or more for three-dimensional films.

‘Paranormal Activity’

Studios released seven sequels this summer, fewer than the 10 that came out in 2009, Hollywood.com said. This year, 13 films generated more than $100 million each, down from 15 last year.

“The movies just didn’t excite people the way they needed to,” Dergarabedian said. “When you raise prices and perceive that quality goes down, you have a major problem.”

There have also been fewer surprise hits this year to compare with 2009 releases such as “Paranormal Activity,” the horror film that generated $107.9 million in U.S. ticket sales for Paramount Pictures on production costs of $15,000, Dergarabedian said.

In 2009, studios saw revenue jump 10 percent and attendance rose 5.4 percent as fans turned out for movies including “Transformers: Revenge of the Fallen.” “Transformers” was the calendar year’s biggest film with $402 million, and “Harry Potter and the Half-Blood Prince,” was second with $302 million, according to Box Office Mojo.

The top-grossing film this year is “Avatar,” from News Corp.’s Fox, with $466 million in ticket sales. The movie, from director James Cameron, is the highest-grossing film of all time and has taken in $753.8 million in the U.S. since Dec. 18.

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net.

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