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Can ''Star Wars'' beat the box office slump?

Can ”Star Wars” beat the box office slump? — EW analyzes whether the drop in movie ticket sales means audiences would rather stay at home with a DVD

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Gloria Swanson had it right in Sunset Boulevard — the pictures did get small. And now so are the crowds. Consider the numbers: The weekend ending May 1 marked the year’s 10th straight drop-off in weekend box office; year-to-date ticket sales are down 6 percent compared with the same period in 2004. It’s the longest losing streak since 11 bad weekends in 2000. Factor in annual ticket-price hikes (totaling 15 percent since 2000), and you get the scariest news of all: To date, for the third straight year, fewer people are going to movies. Holy diminishing returns, Batman!

Optimists say the current box office slump is attributable only to bland product. ”There’s nothing wrong with the movie business that good movies won’t fix,” insists David Tuckerman, president of distribution for New Line. But pessimists fear such complacency is shortsighted, especially since good movies seem to be very hard to come by, and old rules — including the notion that big box office can be bought with lavish marketing campaigns — are breaking. (Just ask Ice Cube, whose heavily hyped XXX: State of the Union laid an unexpected egg.) ”There’s so much more competition for the entertainment dollar,” says Bruce Snyder, Fox’s distribution president. ”We’ve got to blow people away.”

And even if a studio can blow viewers away, chances are it’ll be off a couch rather than a movie-theater seat. DVD sales (up 15 percent in 2004) and rentals now dwarf theatrical revenues: $24.1 billion to $9.2 billion annually — a divide that will likely increase as home-theater technology improves (see our poll results) and moviemakers rethink Hollywood’s traditional business model. On April 29, Steven Soderbergh did what many figured was only a matter of time: The director announced that he will release six films in theaters, on DVD, and on cable simultaneously, as part of a new deal with 2929 Entertainment.

David Card, an analyst at Jupiter Research, compares the state of movies today to where music was in the early 1990s. ”People were upgrading, and buying their music for the third time, after vinyl and tapes and then CDs,” he says. ”CD prices were higher, and that drove the music industry.” In other words, studios aren’t panicking quite yet thanks to DVD sales — currently the bulk of their profits, and revenue that’s seldom shared with stars, directors, or producers.

The big losers in this scenario are the theater owners, who, oddly enough, appear to be living in one big vat of steaming denial. In the face of increasingly sophisticated home-media centers and burgeoning diversions like videogames, TiVo, and the Internet (where movies are widely available for download), multiplexes continue to rely on dated technology. The last big changes to the multiplex experience were stadium seating and digital sound. . .10 years ago! ”The gap between the home experience and what you get in the theater is shrinking,” says Tom Adams, a home-entertainment analyst for Adams Media Research. ”The general agreement is that the theatrical experience could use an upgrade.”