Box office dips in 2011: A year-end analysis

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So, now that we’ve gone through the whole box-office year, what have we learned? Well, here are a few key trends about the state of the industry:

1. While the domestic box office fell, international receipts soared
Ten years ago, it was typical for a tentpole movie to make about two-thirds of its global gross in the U.S. and the rest from foreign territories. By 2011, international box office was booming, and that ratio had flipped for most blockbusters. The top 10 domestic performers all earned substantially more money overseas than in America — on average, about 63 percent of their grosses came from foreign markets — but this trend was most notable with Pirates of the Caribbean: On Stranger Tides. While the film earned a franchise-worst $241.1 million domestically, it sailed to a franchise-best $802.8 million overseas — about 77 percent of its total. Increasingly, Hollywood is targeting a global audience.

2. 3-D giveth, and 3-D taketh away
To be clear, 3-D had some major high points this year. Transformers, Harry Potter, and The Smurfs all earned substantial portions of their grosses from 3-D showings. But then, there were action blockbusters like Fast Five and Rise of the Planet of the Apes that skipped 3-D altogether and earned major audience praise as a result. And, of course, there were outright 3-D flops (see every 3-D release in August) as well. But now that the novelty of 3-D — which helped make Avatar a $749.8 million hit in 2009 – has faded, people have started asking whether 3-D actually does boost box office for some movies. If you ask me (or anyone outside of Hollywood), consumers don’t seem to be very enamored with the format at this point. They see it as a blatant cash grab that lessens the film-going experience.

The 3-D blockbusters that succeeded this year probably would have succeeded without the added dimension — it’s just that theaters don’t offer many 2-D screenings, and people settle for expensive 3-D tickets. Studios and theater owners always adamantly insist that “the consumer has options,” but frequent moviegoers know that that’s not always the case. A few weeks ago, a quick Fandango search revealed that 83 percent of Hugo‘s weekend showtimes were in 3-D and that many theaters didn’t have any 2-D shows at all! For movies that people really want to see, like Transformers or Harry Potter, the hefty 3-D surcharge on ticket prices doesn’t prove too dissuasive. Those films do well. But for movies that look somewhat unappealing to begin with, like Conan the Barbarian, consumers balk at the idea of having to pay a regular ticket price PLUS an additional $3.50 for an experience that doesn’t often provide much more than a headache.

Furthermore, some insiders believe that 3-D’s pervasiveness is damaging the industry as a whole. As Hollywood.com’s Paul Dergarabedian told me last week, “3-D put a spotlight on high ticket prices,” and now that Avatar and Alice in Wonderland have passed, “all consumers remember are the huge prices.”

3. Animated sequels are hurting
Every animated sequel released in 2011 earned less than its predecessor. Hoodwinked Too! Hood vs. Evil bombed with just $10.1 million. Kung Fu Panda 2 trailed Kung Fu Panda by $50 million. Cars 2 earned $53 million less than Cars. And Happy Feet Two fell $138 million short of Happy Feet. In fact, sequels in general had a rough year. Only Harry Potter and the Deathly Hallows – Part 2, Fast Five, and Paranormal Activity 3 outdid their previous installments. Every other sequel, including films like Alvin and the Chipmunks: Chipwrecked, Scream 4, and Big Mommas: Like Father, Like Son, underperformed.

4. Thor, Cappy, and Green Lantern are no Spider-Man, Batman, or Iron Man… Heck they’re no Superman either!
Marvel did have a good summer – Thor, Captain America, and X-Men First Class grossed over $1 billion worldwide — but those movies and DC Comic’s Green Lantern proved that in the world of superheroes, these ones are on the second tier. While Thor did earn a strong $181 million, that gross can’t compare to $300+ million hits like Spider-Man or Iron Man and they fall way short of a $500+ million hit like The Dark Knight (but then, so does every movie). Even Warner Brothers’ unheralded 2006 Superman reboot reached $200 million. But in 2011, moviegoers demonstrated superhero fatigue. Or perhaps this crop of heroes just wasn’t all that well known. Maybe The Avengers will solve that mystery in 2012.

5. Moviegoing habits are rapidly changing
Admittedly, moviegoing habits are always changing, but the rise of On-Demand entertainment made that fact more apparent than ever in 2011. Margin Call, which was released On-Demand on the same day it hit theaters, pulled in about $4.5 million from the service. Melancholia, meanwhile, played for weeks On-Demand before it ever reached a single theater. Tower Heist was going to be available On-Demand in select cities for two weeks during its release, but theater owner uproar led Universal to abandon the experiment. Still, with tablets selling like wildfire and people becoming accustomed to watching entertainment whenever-however they please, On-Demand seems like a format the industry will have to confront in a very real way soon — even if it, as feared, it may continue to chip away at theatrical attendance. After all, on-demand is in-demand.

6. Titles Are Really Long: They Have Colons & Dashes – Part 1
Thanks to the two-part franchise finales of Harry Potter and Twilight, and Hollywood’s oscillating cautiousness about putting a number at the end of a title (Which is why Mission: Impossible 4 is called Mission: Impossible – Ghost Protocol), long-winded movie titles are suddenly incorporating every punctuation mark under the sun. I’m expect titles like The Ascent of the Rise of the Planet of the Apes: Revolution – Part 1 in 3D!!! will be common by 2015.

And so, EW readers, that was my not-so-succinct (but hopefully enjoyably thorough) recap of the year in box office. What industry stories caught your attention in 2011? What’s your opinion of the state of the industry? Do you think the combination of The Hunger Games, The Amazing Spider-Man, The Dark Knight Rises, and The Hobbit will turn the industry around? Be sure to sound off in the comments below.

For more box office tidbits and musings, be sure to follow me on Twitter. Happy New Year!