From this May to September — the typical summer movie season — American motion picture studios will release 16 movies in the 3-D format. That’s more than double the number last year.
From their financial performance so far, movie executives are running scared.
Next up are the most anticipated summer releases. “Transformers: Dark of the Moon” is due from Paramount Studios on July 1, and then, two weeks later, comes Part 2 of Part 7 of the “Harry Potter” series from Warner Brothers. The performance of these two films will go a long way in determining whether 3-D movies are boom or bust for the summer.
So far, things are looking bad. Ripples of fear spread across Hollywood after “Pirates of the Caribbean: On Stranger Tides,” which cost Walt Disney Studios an estimated $400 million to make and market, did poor 3-D business in North America.
Event movies have typically done 60 percent of their business in 3-D. However, “Stranger Tides” sold just 47 percent in 3-D. “The American consumer is rejecting 3D,” Richard Greenfield, an analyst at the financial services company BTIG, wrote of the “Stranger Tides” results.
The Memorial Day holiday did not give studio chiefs much 3-D comfort. “Kung Fu Panda 2,” a Paramount Pictures release of a DreamWorks Animation film, sold $53.8 million in tickets from Thursday to Sunday, a soft total, and 3-D was only 45 percent of the business.
Consumer rebellion over high 3-D ticket prices plays a role, and the novelty of putting on the 3-D glasses is wearing off, analysts told the New York Times. However, there is a deeper problem. While 3-D has provided an enormous boost to the strongest films such as “Avatar” and “Alice in Wonderland,” it has actually undercut lesser quality films that are trying to milk the format for extra dollars.
“Audiences are very smart,” Greg Foster, the president of Imax Filmed Entertainment, told the Times. “When they smell something aspiring to be more than it is, they catch on very quickly.”
Clouding the picture is a discrepancy between the performance of 3-D films in North America and overseas. 3-D is doing very well internationally. Disney’s “Stranger Tides,” for example, did about $256 million in box office abroad, becoming the biggest international debut of all time.
Hollywood, however, needs the American market for overall success, and the situation at the moment is dire. Box office performance in the first six months of 2011 was soft. Revenue fell about 9 percent compared with last year, while movie attendance was down 10 percent.
This comes along with equally poor performance for home entertainment sales. In all formats, including paid streaming and DVDs, home entertainment revenue fell almost 10 percent, according to figures from the Digital Entertainment Group.
Studio executives acknowledge that the motion picture industry needs to sort out its 3-D production strategy, which may lead to a cut-back in 3-D features for release.
“With a blockbuster-filled holiday weekend skewing heavily toward 2-D, and 3-D ticket sales dramatically underperforming relative to screen allocation, major studios will hopefully begin to rethink their 3-D rollout plans for the rest of the year and 2012,” Greenfield told the newspaper.