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Hollywood Faces Box Office Slump

Summer in the United States is the season for Hollywood blockbusters: star-studded films that cost $100 million or more to produce and are expected to bring their studios handsome profits. But this year, ticket sales have turned ugly and studio executives are asking, "Where did the audience go?" Well, nearly three-quarters of them are watching movies at home, according to a new poll by the Associated Press and America Online. They like the convenience and the cost… and many don't mind popping their own popcorn.

Director Ridley Scott's Kingdom of Heaven cost more than $130 million to produce; but in the eight weeks since it launched the summer movie season, the historical epic has only grossed $47 million at American theaters.

Cinderella Man also came to theaters with great expectations; but the drama starring Oscar-winner Russell Crowe sold just $50 million worth of tickets in its four weeks of release and it cost $88 million to make.

Now Hollywood is pinning its hopes on Tom Cruise and Steven Spielberg to break the losing streak with their War of Worlds, estimated to have a $135 million production budget.

The sci-fi thriller arrives as the movie industry marks 18 consecutive weeks with domestic box office grosses less than the same week in 2004.

"The 18-week streak is a new record since box office figures have been regularly tracked; that has been about 20 or 25 years," explains Brandon Gray, who analyzes movie performance on his website While many producers blame the slump on competing entertainment media - home video, computer games, the Internet - Mr. Gray says ticket sales and opinion polls suggest the chief culprit is on the screen.

"It appears that the main problem is the movies themselves," he says. "They have just been rather uninspired [and] boring. The only major 'event' picture they've released is Star Wars Episode III and then they've had some minor events like Madagascar and Batman Begins; but by the same point last year you had Shrek 2, Harry Potter, The Day After Tomorrow, Troy - just a lot of bigger movies than we've had this year. The deficit is so great at this point that it's unlikely to overcome what has happened so far. July could be a record-breaker and still 2005 would be down from 2004."

Mr. Gray adds, however, that comparisons with last year are statistically unfair because of the film that broke the rules ... and the records: The Passion of the Christ.

"That was an anomaly - a cultural event - and it accounts for almost all of the difference between 2005 and 2004. In addition, The Passion was a picture that appealed to irregular movie-goers or people who haven't been to theaters in a long time," he says.

Star Wars Episode III is the biggest success story of 2005 so far; but its producer, Rick McCallum, gets complaints from audiences about how it looks and sounds at neighborhood theaters.

"We spent millions of dollars doing the [audio] mix and there are probably less than 100 theaters where you can hear it anywhere close [to what we did]. You go to the multiplex down at the end of the road and you don't hear anything that we did. If you're lucky, you just hear the actors speaking. What kind of respect for an audience is that? It's just nonsense," he says.

Mr. McCallum says newly-built cinemas in other countries offer audiences a more positive entertainment experience.

"The highest-grossing theater the world is in Moscow. It is owned by Kodak; but it's not just a theater. It's an environment where people don't just go to the movies," he explains. "They can eat, there are bars, there's jazz, there's everything. We need to be able to do that because we're going to lose our audience."

However, the slump is also hitting the international performance of American films: down as much as 25 percent in Japan, 10 percent or more in European countries. War of the Worlds director Steven Spielberg says improving theaters is not enough; studios have to change what they put on the screen.

"I don't believe this is the exhibitors' responsibility. The exhibitors don't have to tweak their theaters. We don't have to find a new platform or medium to communicate our stories. We don't necessarily have to build screens three times bigger. We don't have to IMAX out this world in order to get you to come. We just have to make the kind of movies that you want to see," the oscar-winning filmmaker says. " If the box office is in a slump, I don't believe it's because people are watching cable or playing their video games so much. I really don't believe that. I just believe that when the right movies come along, the people show up."