Film revenues in decline: This season's disaster movies

As one mega-production after another bombs, Hollywood is suffering the worst box-office slump in a generation. Is the problem more than just a failure to produce the right films, asks Andrew Gumbel

Every summer, Hollywood goes through the same little comedy. The studio executives - who have staked reputation, career and tens, if not hundreds, of millions of dollars on the latest mindless blockbuster they feel sure will break through to the key target audience of disaffected suburban teenagers - watch with trepidation and awe as one supposedly sure-fire hit after another stumbles at the box office.

Every summer, Hollywood goes through the same little comedy. The studio executives - who have staked reputation, career and tens, if not hundreds, of millions of dollars on the latest mindless blockbuster they feel sure will break through to the key target audience of disaffected suburban teenagers - watch with trepidation and awe as one supposedly sure-fire hit after another stumbles at the box office.

The real hits, meanwhile, invariably come from somewhere entirely unexpected - a low-budget buddy comedy, say, or an entirely counter-intuitive hits such as Mel Gibson's The Passion of the Christ, which no studio executive would have ever bet on making a cent but which earned more than $600m (£330m) worldwide.

This year, though, is a little different. For sure, the usual quota of mega-productions has either underperformed or bombed altogether - everything from Ridley Scott's crusading epic Kingdom of Heaven, to Ron Howard's Depression-era boxing movie Cinderella Man. But, unusually, nothing much else has grabbed the imagination of the mass American audience either.

The result is the longest year-on-year box-office slump in memory. This past weekend was the 18th in a row in which ticket receipts came in lower than they had in 2004. Nothing like this has happened since detailed records on movie grosses began a generation ago.

The biggest new release, a wacky movie version of the old television series Bewitched starring Nicole Kidman, got slammed by the critics and, in spite of a no-holds-barred publicity push, couldn't even make top billing in the weekend box-office charts. The number one spot was held instead by last week's not-quite-blockbuster, Batman Begins, which has done decent but less than stellar business.

Meanwhile, the film primed to clean up the tween and younger girl market, Disney's revival of the Herbie sentient car series, Herbie Reloaded, was also a disappointment, coming in fourth despite the popularity of its star, Lindsay Lohan.

It has been like this almost every weekend since February. Total box office is down about 7 per cent on last year. In the period from early May to mid-June, traditionally a fecund earning period in the United States because of the Memorial Day holiday, the numbers were down as much as 11 per cent.

Just a handful of films can be said to have performed strongly. Chief among them is Revenge of the Sith, the sixth and final instalment of George Lucas's Star Wars saga, which was just about the only thing motivating the multiplexes to keep the lights burning at the end of last month.

On a more modest scale, Steven Soderbergh's Ocean's Twelve, the follow-up to his reworking of the old Rat Pack caper Ocean's Eleven, made a handsome return on its backers' investment, as did Meet The Fockers, the lowbrow follow-up to the equally lowbrow in-law comedy Meet The Parents, starring Ben Stiller and Robert De Niro.

Otherwise it has been one disaster after another, for reasons that are being debated ever more hotly on Hollywood studio lots and in the ulcer-inducing tension of the big shots' executive offices.

It's not just a matter of quality, or critical reception: seemingly promising prestige projects like The Lords of Dogtown, about the skateboard and surfing culture of Venice Beach, have fallen away just as surely as a lazy, dumb shoot-'em-up like XXX: State of the Union.

It's not just a matter of poorly judged marketing, although Russell Crowe, the star of Cinderella Man, certainly didn't help his movie by throwing a telephone at an employee at a New York hotel and getting himself arrested on the film's opening weekend. Ditto Tom Cruise, whose eyebrow-raising antics on behalf of Scientology and the alleged new love of his life, Katie Holmes, have raised so many hackles that an organised boycott of his forthcoming War of the Worlds, directed by Steven Spielberg, is now in full swing.

What, then, is the matter? In Hollywood, there are two broad schools of thought. The first says that, ultimately, it is about the appeal of the films, and that the big studios have simply failed to deliver. It is undeniable that the men and women who green-light $100m productions are guilty of a spectacular failure of imagination. The movie landscape is littered with remakes, sequels, screen adaptations of superhero comics and ideas repackaged from television series popular when the executives, not their target audience, were young and impressionable.

Not all of these have bombed (otherwise they wouldn't keep making them): the Spider-Man series, for example, has certainly reaped big financial rewards. But, taken together, they do form an impression of an industry suffering either from a failure of nerve or a failure to understand people are looking for the next big thing, not a facsimile of the last one, or the one before that.

The second school of thought blames the slump on the fast-evolving culture of entertainment, and the increasing distraction of DVDs, video games and the internet eating into traditional outings to the big screen. Hollywood's slump, the advocates of this school argue, is really a three-year slump, not a one-year slump - box-office revenues have indeed been in marked decline since 2002, when Spider-Man, Harry Potter, Lord of the Rings and Star Wars all gave the industry a noticeable lift. And those three years coincide with the explosion in the DVD revolution. US consumer spending on DVDs jumped 71 per cent between 2001 and 2002 alone and has continued to grow at a rapid pace since. Americans now spend 53 per cent more time watching videos and DVDs than they did in 2000, according to the Motion Picture Association of America.

Over the same period, time spent on the internet has soared 76.6 per cent, and video game usage has increased 20.3 per cent.

It is not just the availability of new forms of entertainment. It is also the context in which they take place. Consider this choice. One, sitting at home with a bowl of freshly popped popcorn and watching a DVD on a 42-inch plasma screen with surround sound (total cost for even a largish gathering after the initial equipment outlay: no more than a few dollars). Or two, going to the mall, paying for parking, paying for baby-sitting, paying as much as $10 per ticket, paying for overpriced stale snacks and sitting through a tsunami of obnoxiously loud advertising while waiting for the main feature, on screens whose sound and picture quality can be unpredictable at best, downright lousy at worst.

Is it any wonder that more and more people are staying away from the multiplexes? A poll by Associated Press and AOL last week found that 73 per cent of Americans would rather watch a film at home. And, increasingly, the industry is tailoring its products to that constituency.

The time lag between cinema and DVD release has shrunk down to an average of four months, and analysts expect that gap to narrow further. Renting is becoming ever easier, especially thanks to companies like Netflix, which operate entirely by mail and have abolished forever the scourge of late fees.

Exhibitors - the companies that own and operate the cinema screens - are certainly feeling the squeeze. Last week, the number two and number three exhibitors in the US announced that they were merging - a sure sign of industry weakness.

It would be a mistake, however, to write off the movies too quickly. After all, their death has been foretold many times before. First, in the 1950s, it was television that was going to do in the big screen. Then it was video. Now, supposedly, it is DVDs and the internet.

Most industry insiders are too savvy to fall for such easy gloom-and-doom thinking. Cinema-going is clearly still popular - with movie box offices doing almost $10bn in business every year in the US alone. And audiences are almost bound to keep coming, just as long as they have sufficient motivation.

That might mean rethinking how movies are marketed and experienced. (The smaller, more comfortable, less corporate houses are doing rather better than their multiplex brethren.) And it also means riding the lows along with the highs and waiting for a more worthy crop of movies than 2005 has managed to offer.

John Fithian, president of the National Association of Theatre Owners, told the Los Angeles Times: "When the quality and the quantity of the movies come back, our patrons will come back to see them. The sky is not falling."