January 2, 2009 / 1:29 PM / 10 years ago

Good movies, prices help Hollywood in recession

LOS ANGELES (Reuters) - A slew of quality movies and higher ticket prices helped Hollywood hold its own in 2008 despite recession, while 2009 promises more 3-D pictures and some big blockbusters to keep audiences coming in.

Tourists pause on a walkway at a shopping mall which offers a view of the famed Hollywood sign at the hills in California March 14, 2008. REUTERS/Fred Prouser

Box office revenues in the United States and Canada fell less than 1 percent to $9.6 billion in 2008 compared to $9.68 billion the year before, tracking firm Media By Numbers said.

Attendance fell by about 5 percent in 2008 but with average ticket prices up slightly, revenues held firm.

Paul Dergarabedian, president of Media By Numbers, said the high quality of the 2008 releases insulated the industry from the economic downturn.

He expects well-reviewed movies late in 2008, such as “Slumdog Millionaire,” “Gran Torino” and “Doubt,” to entice audiences to come out to movie theaters in 2009.

Batman movie “The Dark Knight,” the top grossing film of 2008, ranked second only to 1997’s “Titanic” on the all-time U.S. and Canadian box office leader board, with $531 million.

The critically-acclaimed “Iron Man,” starring Robert Downey Jr., ranked second in the 2008 box office race with $318 million.

“The movies were so exciting, the product was so good this year that it is instilling in the audience a lot of goodwill,” Dergarabedian said.

Experts said box office revenues are resistant but not immune to the recession.

“It’s not necessarily that people rush out to see movies because the economy is bad, but because it’s a bargain compared to other out-of-home entertainment it doesn’t suffer as badly,” said Patrick Corcoran, director of media and research for the National Association of Theater Owners.

Movies slated for release in 2009 that industry watchers expect to post big numbers include “Transformers: Revenge of the Fallen,” “Terminator: Salvation” and “Star Trek.”


One major film that was absent from the slate in 2008 was “Harry Potter and the Half-Blood Prince,” which was scheduled for release in November 2008 but was moved to July 2009, when the anticipated blockbuster would benefit from a summer rush.

“If ‘Harry Potter’ had been back in the (2008) lineup we wouldn’t be talking about a down year,” Corcoran said.

The last “Harry Potter” film made $292 million in 2007 in the United States and Canada, according to the firm Box Office Mojo.

In 2009, studios will increasingly rely on 3-D technology to attract audiences, Dergarabedian said. Upcoming 3-D movies include “Monsters vs. Aliens” and “My Bloody Valentine.”

“People are willing to pay a premium for that, even in this economy,” Dergarabedian said.

On another front, the number of movies released next year could decrease, said James Goss, an analyst with Barrington Research who follows the entertainment industry.

“There was some feeling that there was a bit of a glut of titles this year,” Goss said.

The 2007 box office total was a record. Box office revenues generally increase year over year, but an exception was in 2005 when revenues fell by 5 percent to $8.96 billion, with attendance dropping by more than 8 percent, according to Media By Numbers.

For 2008, the estimated 5 percent drop brought attendance to more than 1.3 billion.

“The fact that they were able to raise prices in this sort of environment is interesting,” Goss said.

“But still, a 5 percent decline in attendance in one of the more challenging economic environments in memory I think is a reasonably good showing,” he said.

Reporting by Alex Dobuzinskis: Editing by Jill Serjeant and Vicki Allen

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