Hollywood studios are riding high on record box office receipts, despite the lowest attendance in five years, according to a report from the Associated Press. Those record revenues are mostly the result of higher ticket prices for 3-D and other premium film showings, but come as theaters have raised prices for nearly all films.
According to Hollywood.com analyst Paul Dergarabedian, box office receipts from the first weekend in May through Labor Day weekend have already surpassed last summer’s take. Hollywood has amassed $4.35 billion so far this summer, which is about $100 million more than summer 2009.
However, those record sales come despite the fact that fewer people went to the movies this summer than in the last five years. The actual number of tickets sold during the blockbuster season is estimated at 552 million, which is the lowest count since 2005, when theaters sold 563.2 million tickets.
The record box office, therefore, is mainly a result of higher ticket prices, driven in part by the premium which theater-goers pay for 3-D and IMAX films during the blockbuster movie season. Average ticket prices for the year have climbed to $7.88, which is up from $7.46 at this point last year. Year-to-date, Hollywood has pulled in $7.35 billion at the box office, compared to $7.05 at this point last year, but those sales have come despite a dip in attendance to 933.2 million, compared to 945.1 million a year earlier.
While higher prices have made up for a decrease in ticket volume, the decrease in attendance is troubling. Since Avatar left theaters, Hollywood has yet to have another big 3-D hit, and there don’t appear to be any on the horizon. Avatar grossed $750 million at the domestic box office, topping the all-time list for movie revenues, but in the wake of its success, Hollywood is pushing 3-D films as a way to boost overall box office sales.
The problem is that the studios may be overestimating the appeal of 3-D, especially for movies that don’t gain much from the visual effect. Despite the success of Avatar and other films, some experts — like Disney (s DIS) chief Bob Iger — are warning that the studios need to be careful about how they employ 3-D technology, lest consumers are hit with 3-D fatigue.
On Disney’s first-quarter earnings call, Iger said, “[W]e don’t believe every film should be in 3-D. And when applied, we think 3-D should be applied well and not done in a last-minute sort of paste-it-on kind of approach. Because we think that if, one, we make films in 3-D that don’t really benefit from them being in 3-D, that’s not necessarily good. And if 3-D is used badly either by us or the industry, that’s not good.”
The studios would do well to heed those warnings, or attendance could continue to drop below the point where higher ticket prices will make up for the loss of bodies in the theater.
Related content on GigaOM Pro: Are We Putting the 3-D Cart Before the Horse? (subscription required)