Movies getting much costlier all around

After dropping slightly the previous two years, the average cost to make and market films by Hollywood’s top seven studios rose 8 percent last year, to $82.1 million, said Jack Valenti, who heads the Motion Picture Association of America, the industry’s key trade group.

That breaks out to an average $54.8 million to produce a movie and $27.3 million for prints and advertising. Figures were released this week at ShoWest, an annual convention for theater operators.

Except for declines in 1998 and 1999, movie costs have been soaring since the late 1970s as special-effects budgets climbed and star salaries rose to $20 million or more a film.

The average ticket cost, which includes matinees and other cinema discounts, was $5.40, up from $5.08 in 1999, said John Fithian, head of the National Association of Theatre Owners.

Though Hollywood had record domestic revenues of $7.7 billion last year, the higher ticket prices — in some markets as high as $10 — mean movie attendance dropped to 1.42 billion, down 44 million from 1999. In Hawai‘i, nondiscounted tickets still average $7.

It was the second straight year that admissions dipped nationwide, however, contributing to financial troubles for theater chains burdened by debt from building new cinemas with better seating, sound systems and other improvements. About 10 of the nation’s largest theater companies have filed for bankruptcy protection since last summer and have begun closing outdated cinemas to reduce overhead.

The number of theater screens, which peaked at almost 38,000 in the middle of 2000, had fallen to 36,379 by the end of the year. Theater chains will continue to shed about 200 screens a month, though industry leaders are unsure how low the total will go, Fithian said.

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