Valenti
LAS VEGAS -- Hollywood paid a hefty sum to produce last year's hugely successful slate of movies.
Negative costs rose by almost one-fourth to an average $58.8 million, though marketing expenses dipped 1.25% to $30.6 million, according to data from the Motion Picture Assn. of America.
MPAA prexy Jack Valenti, in his annual state-of-the-industry address at ShoWest on Tuesday, said it's unclear why production spending rose 23.3% in 2002. "That's not good," he allowed.
But the resulting 225 movie releases -- 29 more than a year earlier -- certainly played well.
Box office hit a record $9.5 billion on the biggest year-to-year increase in 20 years at 13.2%. And admissions posted the biggest surge in 45 years with a 10.2% rise to 1.64 billion tickets sold in '02, according to MPAA stats.
Fifty percent of moviegoers were ages 12-29, 17% 30-39 and 32% over 40.
Meanwhile, the average cost of a ticket rose a modest 2.7% to $5.81. That prompted Valenti's traditional cheerleading for moviegoing as America's most affordable entertainment pastime. "The stories we told on film captivated audiences of every culture, creed and country," he declared.
And indeed, last year's boffo B.O. extended to the international marketplace. Foreign ticket sales jumped 7.5% to 7.3 billion admissions in '02, officials said.
John Fithian, prexy of the National Assn. of Theater Owners, also sounded an upbeat message for exhibs attending the annual trade show. Fithian thanked film distribs for their help in continuing a couple of positive trends over the past year.
He cited the increased prevalence of family-friendly pics -- none of the year's 20 top grossers were R-rated -- and a greater number of "good movies throughout the 12 months of the calendar."
In a prespeech press conference, the industry leaders also touched on a few other topical issues:
- Valenti again assailed the threat of video piracy. "If piracy goes unchecked (we) are going to have a big-ass problem in the future," he said, adding that he's optimistic the problem can be solved, through technological or other means.
- Theater owners are unconcerned about the rising popularity of DVD, Fithian said. "The theatrical release will always be the premier release. So, bring on the big DVD releases, and I hope they make a lot of money."
- Exhibs are seeing benefits from a recent stabilization in industrywide screen counts. NATO counted 35,592 screens in 6,134 U.S. theaters at the end of '02, compared with 35,459 in 6,327 sites a year earlier. Canadian stats show a slight reduction in screen count at 2,800 last year vs. 2,900 a year prior, meaning the U.S. and Canada domestic total stood at about 38,300 at year's end.
- A more orderly progress toward digital cinema is under way, repping a marked improvement over the rushed atmosphere a year or two ago, Fithian said. "There was tremendous pressure applied to theater owners to support this revolution prematurely," the NATO boss said, recalling offers of free, early version d-cinema systems from hardware vendors.
"No less a leading light than George Lucas also tried to get the industry to make this transition prematurely," he added.
Fithian said he is newly encouraged that technical and other issues can be worked out now that a consortium of Hollywood studios has tackled d-cinema. In fact, NATO just last week began early talks on a possible business model for funding the rollout of d-cinema systems in America's movie theaters.
"It will still take many years for this transition to happen," Fithian cautioned. "It will not happen overnight."
Hill relations improve
The industry leaders also noted an improved atmosphere in Congress of late, in contrast to the anti-Hollywood bent of legislators over the past few years. "There isn't a single piece of legislation in Congress right now that would affect the (movie) ratings system," Fithian observed.
But studio execs almost certainly will be more focused on the portion of Valenti's presentation spotlighting the marked increase in production spending. Perhaps as a salve, he suggested that the surge in negative costs may prove short-lived.
"I believe our companies are in one of their periodic fits of cost-control," Valenti told reporters. "I believe you will start to see these costs go down over the next 12 months."
Production costs did decline between 2000 and 2001, with negative costs dipping from an average of $54.8 million to $47.7 million. At that time, industryites cited a new stress on frugality for the downtick.
As for the dip in prints and advertising outlays last year, he said: "Television is a huge part of marketing costs. And I think our companies have been more prudent in the way they have used television in shaping their marketing plans."
ShoWest continues through Thursday at the Paris and Bally's hotels.
Contact the Variety newsroom at
news@variety.com