Traffic jam affecting films' returns

Limited 3D, Imax venues inundated with new releases

"Ice Age: Dawn of the Dinosaurs" was a dynamo abroad, grossing $621 million. But back home, the pic was, well, frozen out.

Fox's animated comedy failed to reach $200 million domestically in part because it lost the bulk of its lucrative 3D screens in North America during its fourth weekend in release. The threequel didn't even manage a single Imax 3D playdate, even though it was just the kind of film that typically does well on the giant screens.

What happened to "Ice Age" is part of the ongoing 3D dilemma: too few upgraded screens to accommodate the parade of movies coming out in the emerging format.

"Ice Age" was yanked to make room for Disney's "G-Force," just as the Fox pic had bumped Disney's "Up" from those same 3D screens three weeks earlier. The weekend "Ice Age" went from 1,600 3D screens to 600, while still on several thousand 2D screens, its gross fell by more than half. The third installment in the franchise eventually grossed $192.7 million domestically.

"I would have loved to have kept the 3D screens for 'Ice Age,' but we lost them because of 'G-Force' coming in, absolutely," says Bruce Snyder, head of theatrical distribution at Fox.

Despite a higher ticket price, moviegoers have shown a pronounced preference for 3D. While it was planted in first-run theaters, "Ice Age" did about half its business on the quarter of screens that were showing the movie in 3D. "That's giant," Snyder says. "It can't be ignored."

"Ice Age" likely would have fallen off anyway with "G-Force" targeting the same younger demo. But Snyder says he has no doubt "Ice Age" left money on the table.

"When you have a 3D movie," he says, "you have to make sure the screens are available."

In the era of tentpole movies and a growing number of pricey CGI releases, 3D and Imax increasingly are important pieces of the boxoffice pie. But for now, there is room for only one wide-release movie at a time in 3D theaters and on Imax screens.

There are slightly more than 2,200 digital 3D screens in North America, and there should be more than 2,500 by the time Fox's "Avatar" opens Dec. 18, according to Rick Heineman, head of media relations at RealD, which provides more than 90% of the equipment that allows digital projectors to show 3D movies.

The rollout of 3D installations has been slowed by the global credit crunch, which has hampered financing for digital conversions. Heineman says he expects that to ease this year and predicts there will be room for two 3D movies at a time in the domestic marketplace by next summer. It's likely there still will be room for only one 3D movie at a time in most overseas markets.

Imax is a different story.

This summer, the large-screen format showed just how powerful a boost it can provide when Warner Bros. added Imax theaters for "Harry Potter and the Half-Blood Prince" about a month into its run in regular theaters. Warners had built an Imax 3D sequence into the first part of the movie and always planned for an Imax release. However, when the release was moved from fall 2008 to this summer, the Imax track wasn't available right away.

Even four weeks into its run, there was a difference.

"Imax was certainly a boost to my business," says Dan Fellman, Warners' head of theatrical distribution, noting that the weekend it expanded into Imax theaters the drop from the previous week was 39%. "The last Harry Potter dropped 45% in the same week," he says. "Some of the Imax numbers are humongous."

Those numbers are causing intense jockeying among studios for precious theater space. Release dates have been juggled to make sure 3D screens are available, and once the decision is made to go 3D or Imax, distribution execs have to accept shorter runs than they typically desire.

Snyder believes Imax would have boosted "Ice Age" grosses as well, but it never was part of the Fox plan because Imax already had committed to Paramount's "Transformers: Revenge of the Fallen" during that time frame.

The crunch will only get worse next summer. The traffic jam is most obvious with Imax, where there are about 250 locations that play commercial movies -- of which 90 are digital and 160 analog (film). All but about 20 can play 3D movies.

Imax is adding two to three digital 3D locations every week and expects to have about 280 domestic venues by the time "Avatar" arrives (with another 150 3D-capable theaters outside the U.S.). Even with that growth, there still only will be room for one picture at a time in Imax next summer.

"So far we have somewhere between 15-20 titles that have been offered to us for next summer," Foster says. "We are trying to juggle it all out."

At most, he says, there will be room for five of those titles.

Even for those that get Imax playing time, it will be less than in the past. "There are deals we made with companies two years ago that are different than today," Foster says. "That's because two years ago, we were releasing four or five movies a year. Now we're releasing 10-14 a year."

For that reason, Imax revenue has become an added bonus but not something on which studios can count for every tentpole.

"Imax is like the icing on the cake," says Rory Bruer, head of distribution at Sony. "I think it's a great brand, but it's not like that's going to be necessarily the determining factor. It's a piece of the puzzle."

Until just more than a year ago, all Imax releases were on film. Each 3D analog print cost about $50,000 to produce and took about three months to process. During the past year, Imax has converted to digital projection, which means a 3D showing costs the distributor about $200 per theater, and the movie can be processed in a couple of weeks. That makes it less expensive and more profitable to play and allows Imax to move more quickly to change movies if a release falters.

"You can justify a shorter run for the obvious reason that you don't have those big print costs," Fellman says.

Still, the limited number of Imax theaters is by design. Each is placed far enough from others so it can play the same picture. That means there is only room for one big commercial release at a time, and that is the way it will be through next year, and probably beyond, as the company is committed to being selective in its choices.

"The biggest challenge I face is all the people I was begging for movies from three or four years ago now I have to sometimes say no to," Foster says.

That is why such movies as Paramount/Marvel's "Iron Man 2" and Summit's "The Twilight Saga: New Moon," which would seem to be obvious Imax choices, won't play there. There simply is no room.

Imax has bent over backward to accommodate as many studios as possible. Among the six biggest film distributors, only Universal won't have an Imax release by the end of next year. Sony returns for the first time since 2007's "Spider-Man 3" when it releases "Cloudy With a Chance of Meatballs" in Imax 3D beginning Sept. 18, along with a release in 2D and 3D theaters.

The bigger question is how fast digital 3D will develop. Unlike Imax, which is a nice add-on for films seeking event status, 3D has become an essential part of the business plan.

Says Bruer, "It has a tendency to enhance really good content and puts a picture on people's radar even if you don't necessarily get to see it in 3D."
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