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MPAA study finds movies cost more than ever: Ticket buyers beware

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Johnny_l

Johnny_l

In advance of the movie industry’s annual ShoWest gathering in Las Vegas next week, the Motion Picture Association of America has released its Theatrical Market Statistics Report for 2007, which details all the basic facts and figures of the film business. The big news is that the total cost of making and releasing a movie is at an all-time high: Last year, Hollywood studios spent $70.8 million to produce the average release and $35.9 mil to market it — a whopping $106.6 mil total price tag. (The previous high was $105.8 mil in 2003.) The sums for what the MPAA calls “subsidiaries/affiliates” (ie. specialty divisions like Fox Searchlight and Miramax) saw an even bigger jump: It cost $74.8 mil to make and market the typical indie movie, up from a previous high of $62 mil in 2003. Meanwhile, the average cost of a movie ticket rose 5 percent to $6.88, the largest such leap in seven years. And remember, we’re talking averages here — the cost of a standard summer blockbuster, like a Pirates of the Caribbean movie, is much higher (usually well north of $200 mil), and theater admissions in major metropolitan areas tend to cost a whole lot more.

What does all this mean for consumers? Simple: Even more blockbuster-type releases! (And even fewer mid-range movies like Michael Clayton.)

After all, while Hollywood execs may cringe at the thought that their

costs are skyrocketing, they can comfort themselves in knowing that

that their product appears to be increasing in popularity: The MPAA

report also notes that 2007 saw nine more $100 mil grossers than the

year before; a slight uptick in the overall number of tickets sold; a

boost in the combined revenues of all hit summer movies; a 5.4 percent

increase in domestic box office receipts ($9.63 billion); and a record

total of $26.72 billion in worldwide theatrical grosses. So although

movies have gotten more expensive, they’re raking in more dough.

Big movies are what’s working right now…right?

Well, there are a few caveats here. For one thing, even as 2007’s

global grosses saw a 4.9 percent rise over the previous year, combined

production and marketing costs rose a greater 6.3 percent. Furthermore,

the domestic movie marketplace lost 200 million ticket buyers between

2002 and 2007. Then there’s the always pesky (and often forgotten) fact

that studios have to turn over a huge chunk of gross revenues to

theater owners and marquee stars. And don’t think all the bloated

numbers means that Hollywood is putting out more movies than ever,

because it’s not: 2007 boasted the smallest number of studio releases

(179) of any year this decade. It all goes to show that power players

in the business shouldn’t be so quick to congratulate themselves — but

since they’re not likely to stop, moviegoers should expect to settle in

for much, much more of the same.

What does all this mean for consumers? Simple: Even more blockbuster-type releases! (And even fewer mid-range movies like Michael Clayton.)After all, while Hollywood execs may cringe at the thought that theircosts are skyrocketing, they can comfort themselves in knowing thatthat their product appears to be increasing in popularity: The MPAAreport also notes that 2007 saw nine more $100 mil grossers than theyear before; a slight uptick in the overall number of tickets sold; aboost in the combined revenues of all hit summer movies; a 5.4 percentincrease in domestic box office receipts ($9.63 billion); and a recordtotal of $26.72 billion in worldwide theatrical grosses. So althoughmovies have gotten more expensive, they’re raking in more dough.Big movies are what’s working right now…right?

Well, there are a few caveats here. For one thing, even as 2007’sglobal grosses saw a 4.9 percent rise over the previous year, combinedproduction and marketing costs rose a greater 6.3 percent. Furthermore,the domestic movie marketplace lost 200 million ticket buyers between2002 and 2007. Then there’s the always pesky (and often forgotten) factthat studios have to turn over a huge chunk of gross revenues totheater owners and marquee stars. And don’t think all the bloatednumbers means that Hollywood is putting out more movies than ever,because it’s not: 2007 boasted the smallest number of studio releases(179) of any year this decade. It all goes to show that power playersin the business shouldn’t be so quick to congratulate themselves — butsince they’re not likely to stop, moviegoers should expect to settle infor much, much more of the same.

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