‘Iron Man’ Led Record Year as Hollywood Spaced Out Movies

Photographer: Zade Rosenthal/Marvel via Bloomberg
Robert Downey Jr. and Gwyneth Paltrow star as Tony Stark and Pepper Pots in Disney's "Iron Man 3" in this handout photo taken on June 11, 2012. The film is directed by Shane Black.

Tony Stark did more than save the world in “Iron Man 3.” He helped deliver a record summer in theaters and carry Hollywood to a new high for all of 2013.

With two days left, U.S. and Canadian cinemas are certain to pass last year’s record $10.8 billion in ticket sales by about 1 percent, researcher Rentrak Corp. (RENT) said yesterday in a statement. Studios spaced out their biggest films to avoid head-to-head competition, and produced more releases with domestic revenue of $200 million-plus, often with exhibitors charging extra for larger screens, plush seats and better sound.

“To get people to come out and spend the extra money, the movie has to be over the top,” said Martin Pyykkonen, an analyst with Wedge Partners in Greenwood Village, Colorado. “That’s one reason studios have become so good, and so focused, at producing bigger blockbuster movies.”

Walt Disney Co. (DIS)’s “Iron Man 3,” topping the U.S. box office with $409 million in sales, underscored Hollywood’s success revisiting hits, leading the industry to a second-straight annual record after drops the prior two years. Eight of the top 10 films were sequels or revivals of action, fantasy, animation or sci-fi hits, according to Box Office Mojo. Two of those, “The Hunger Games” and “The Hobbit,” return with new episodes in 2014.

“The Hobbit: The Desolation of Smaug,” the second of three new films from the work of J.R.R. Tolkien, led U.S. sales for a third-straight weekend, even with fresh competition from Martin Scorsese’s “The Wolf of Wall Street.” “The Hobbit” has taken in $190.3 million domestically since its Dec. 13 debut and $614.1 million worldwide for Time Warner Inc. (TWX)’s Warner Bros., the 2013 box-office leader, according to Box Office Mojo.

Occasional Duds

The year’s winners were accompanied by a few duds. “The Lone Ranger,” from Disney, lost $160 million to $190 million, according to an August conference call transcript.

Sony Corp.’s film studio stumbled in the summer box-office season that runs from May to early September. Big-budget tentpoles “After Earth,” with Will Smith, and “White House Down,” with Channing Tatum and Jamie Foxx, failed to connect with audiences.

Studios avoided bloody box-office battles by putting some time between their biggest pictures, Pyykkonen said.

“Iron Man 3,” released May 3, racked up 85 percent of its total domestic sales in three weeks. The latest installment in the story of billionaire inventor Tony Stark faced serious competition only by its third weekend, when Viacom Inc. (VIAB)’s Paramount Pictures opened “Star Trek Into Darkness.”

Wide Appeal

With fewer releases bunched together, at least 12 films exceeded $200 million in U.S. ticket sales this year, compared with 11 in 2012 and seven in 2011, according to Box Office Mojo. That helped the industry beat last year’s total even though only “Iron Man 3” topped $400 million domestically this year, compared with three in the previous 12 months.

The less competitive calendar also allowed some sleeper hits to emerge. “Gravity,” the 3-D space adventure featuring Sandra Bullock and George Clooney, opened in early October and generated $254.6 million in domestic revenue for Warner Bros.

“Gravity” was the No. 2 film of the year for the studio, behind “Man of Steel,” and helped cement Warner Bros.’ industry-leading $1.81 billion in domestic sales as of Dec. 26, according to Box Office Mojo.

“The product this year was appealing to a wide range of audiences, and there wasn’t a concentration that we sometimes see where the movies cannibalize each other,” said Bud Mayo, chairman and chief executive officer of Digital Cinema Destinations Corp. (DCIN), the Westfield, New Jersey-based operator of about 200 Digiplex screens.

January Releases

That trend continues on Jan. 17 when Paramount releases “Jack Ryan: Shadow Recruit,” a reboot of author Tom Clancy’s spy-thriller series, with Chris Pine from “Star Trek” taking the title role. Three weeks later Sony and 21st Century Fox Inc. release “The Monuments Men,” with an all-star cast including Matt Damon and Clooney.

“Each of those could have been released in December, easily chipping away box-office sales,” Mayo said. “But that won’t happen in January, where those movies will have their own platform.”

Sales were also boosted by a year-end sprint, with revenue rising 25 percent over the five-week U.S. holiday period from a year ago, according to Rentrak. Disney’s “Frozen” dominated animation this holiday season, with $248.4 million domestically and $491.9 million worldwide, according to Box Office Mojo.

Ticket Sales

The domestic record comes even with attendance and average ticket prices little changed from 2012, according to analyst Pyykkonen. Multiplex operators are becoming more sophisticated, pricing peak showtimes on Friday and Saturday nights higher than weekdays, he said.

“That’s beginning to skew the mix of when people go to the movies,” Pyykkonen said. “The theaters are full on Friday nights but over the course of a year people are starting to pick times when it’s cheaper.”

At the Marcus Theatres multiplex in Addison, Illinois, about 25 miles west of Chicago, tickets for the Saturday, Dec. 28 showing of “The Secret Life of Walter Mitty” at 8 p.m. cost $13.50 each. That includes a Dream Lounger seat in the company’s UltraScreen DLX auditorium.

Prices for adult tickets at the location range from as little as $8 for a matinee to $14.50 for an advanced screening.

Weekend Revenue

At a Cinemark in Fremont, California, a 9:45 p.m. showing last night of “Walter Mitty” was priced at $14.25, while at the Regal Cinemas in downtown Los Angeles, 3-D tickets for “47 Ronin” totaled $18.75 each.

Weekend revenue for the top 10 films rose 8.1 percent to $167.8 million from the year-earlier period, Rentrak said today. Domestic box-office sales this year total $10.76 billion, up 0.8 percent from the same period last year.

Some of the credit for 2013 sales goes to social media, said Paul Dergarabedian, senior media analyst for Rentrak, as Facebook Inc. and Twitter Inc. provided a virtual watercooler for fans to chat. Still, he said, the movies had to deliver.

“It ultimately comes down to the product, the movies themselves more than any other single factor,” Dergarabedian said. “The lineup of movies still consisted of the usual mix, but there was something about the 2013 slate that created a something-for-everybody environment at the multiplex.”

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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