The good news for Hollywood: summer movie revenues are up worldwide as studios rebounded from a dismally slow start to the year.
The bad news: Domestically, revenues rose only a fraction compared to the previous year's, while actual movie attendance dropped for the fourth-straight year.
Taken together, the summers of 2010 and 2011 combined for the smallest domestic audiences since the summers of 1997-98. Since peaking at a modern high of 653 million tickets sold in summer 2002, domestic attendance has wavered generally downward, dipping to 551 million in summer 2010 and sliding again this summer to 543 million, according to projections from box-office tracker Hollywood.com.
One so-so summer can be an aberration, when the movies simply failed to grab fans. Two so-so summers in a row are a sign of the tough task studios face to keep butts in theater seats at a time when audiences have more entertainment options than ever.
"One down summer you could lay at the doorstep of a lack of quality films, audience indifference, whatever. But more than one or two years becomes a trend, and we're seeing this downward trend in attendance," said Hollywood.com analyst Paul Dergarabedian. "Emerging technology combined with an audience that is trying to figure out how they want to consume their entertainment is creating this situation."
Making matters worse, Hollywood took a weather hit last weekend, with business down steeply because many East Coast theaters closed to ride out Hurricane Irene.
Many in Hollywood expected summer 2011 to be a knock-it-out-of-the-park season. The summer was jammed with superhero sagas, huge animated sequels and action franchises that studio executives predicted would quickly lift the industry out of a deep rut after the year began with a weak run of movies.
Summer did erase most of this year's deficit on revenues, which back in spring had been running as much as 20 percent behind last year's.
According to Hollywood.com, domestic receipts from the first weekend in May through Labor Day weekend should finish at a record $4.38 billion, up 0.7 percent from summer 2010. But factoring in this year's higher ticket prices, actual attendance will be down 1.4 percent.
Studio executives get defensive comparing this year to last, saying the early part of 2010 made for an unfair contrast because blockbusters such as "Avatar" and "Alice in Wonderland" were keeping theaters jammed. By comparison, the early months of this year were a quiet time at theaters, digging a hole for a business that's always looking for the next box-office record.
"The challenge the whole industry found itself in was a testament to the films in the market last year," said Dave Hollis, head of distribution at Disney. "It creates a story that is frankly less about 2011 than it is about the amazingness of 2010."
For the year, revenues now are running 4.3 percent behind 2010's, a big recovery since spring. But it's not as good as projected in May, when some Hollywood executives were predicting that this year's revenues would shoot past last year's by early summer.
Still, some of this summer's films delivered spectacularly, including $300 million megahits "Harry Potter and the Deathly Hallows: Part 2" and "Transformers: Dark of the Moon." And while most franchise films packed in big crowds, they often did not live up to the domestic returns of their predecessors, among them "Cars 2," "Pirates of the Caribbean: On Stranger Tides," "The Hangover Part II," "Kung Fu Panda 2" and "X-Men: First Class."
Surprise smashes such as "Bridesmaids," "The Smurfs" and "Rise of the Planet of the Apes" were offset by duds like "Green Lantern" and "Cowboys & Aliens." Except for the "Transformers" sequel, domestic audiences turned blase about 3-D movies, with fans no longer as willing to shell out an extra few dollars for the added dimension.
On the flipside, overseas audiences were hungry for 3-D and Hollywood movies in general. While Johnny Depp's fourth "Pirates of the Caribbean" flick managed a franchise low $240 million domestically, it pulled in a colossal $800 million internationally, joining the latest "Transformers" installment and the "Harry Potter" finale to make a threesome of billion-dollar worldwide hits this summer.
"Communication with the Internet and everything else has just made the world a lot smaller place," said Dan Fellman, head of domestic distribution at Warner Bros., whose $1 billion overseas haul for the "Harry Potter" finale will exceed the entire world total rung up by "Harry Potter and the Sorcerer's Stone," the franchise's previous top-grosser. "The growth in the exhibition business has without any doubt been international."
Only seven other movies had topped $1 billion previously, led by James Cameron's "Avatar" at $2.8 billion and "Titanic" at $1.8 billion.
"Deathly Hallows: Part 2" provided a suitable send-off for young wizard Harry, the finale taking in a record $482 million worldwide through opening weekend and climbing to No. 3 all-time with $1.3 billion.
Along with "The Hangover" sequel and "Bridesmaids," other R-rated comedies such as "Horrible Bosses" and "Bad Teacher" scored with audiences.
In a season that normally caters to young action and comedy fans, older adult crowds also had some nice choices with the late-summer dramatic smash "The Help" and Woody Allen's biggest hit in decades, "Midnight in Paris."
Though attendance is not what it was a few years back, studio executives seem satisfied with the crowds that turned out this summer and talk hopefully about a strong finish to the year with new installments of "Twilight," "Sherlock Holmes," "Alvin and the Chipmunks," "Happy Feet" and other franchises.
"The thing that comes clear out of all of this is that the business is healthy and well. It's not the doom and gloom pieces that you kind of heard earlier in the year," said Rory Bruer, head of distribution for Sony Pictures. "With all the holiday product, there should be a lot of money there all the way through the end of the year."