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It has been a good year so far for Hollywood, but will it last?

November 29, 2006

ON SECOND THOUGHT, maybe the multiplex isn't dying after all.

Ending a three-year slump, attendance at movie theaters is up this year almost 4%. Box-office revenue is up too, by 5.5%. The results stand in sharp contrast to last year, when weekly ticket sales failed to beat the previous year's results for 19 consecutive weeks, and total box-office revenue was down more than 5% from 2004. Attendance fell 8.7%.

Those results led some analysts to speculate that consumers had lost interest in moviegoing, rejecting inhospitable multiplexes and high ticket prices in favor of bigger-screen TVs and videogame consoles. The turnaround this year offers a simpler explanation: Last year's movies just weren't very good.

To some degree, the uptick in attendance is a function of luck. The studios decide which movies to release a year to 18 months in advance, so it's not as if they made a few quick adjustments after last year's flops. Similarly, theater owners are still raising ticket prices, struggling to hush rude patrons and showing a raft of commercials before the feature. The only real change from 2005 has been in the movies themselves: fewer remakes, more sequels and more animation with broad appeal.

Nevertheless, this year's improvement belies the widespread notion that moviegoing had taken a permanent turn for the worse. In fact, despite the occasional dips, the number of people going to see movies is continuing to grow gradually, as it has every decade since the 1970s. The average then was 970 million tickets sold each year; in the '80s, it rose to 1.1 billion; in the '90s, it reached 1.3 billion; and it has averaged about 1.5 billion so far this decade.

That's not terribly impressive, given the growth in the U.S. population. But the filmmaking business is also getting better at responding to its audience. Well-funded independent filmmakers and producers now cater to overlooked or underserved genres, such as spiritual or horror flicks. While some studios are cutting expenses and releases, other distributors are launching or being revived, broadening the range of choices for consumers. The major studios have evolved too, expanding their offerings through specialty divisions and using the Internet and mobile phones to promote their films and compete for attention.

Meanwhile, theater chains continue to try to improve the moviegoing experience, building new cinemas, refurbishing old ones and deploying new ways to control rude customers. One strategy being tested: giving selected customers a panic button that summons ushers to remove chatterers.

It's an interesting idea. But maybe a better way to fill theaters is to put something on the screen that customers will still be talking about after they leave.

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