Box office slumps worldwide in 2005

LOS ANGELES -- The movie business was down both in the U.S. and worldwide last year, final box-office figures show.

Revenues in the United States dropped 6 percent to $8.99 billion last year compared to 2004. The worldwide market fell 7.9 percent to $23.24 billion from a 2004 all-time high, the Motion Picture Association of America said Thursday.

The number of tickets sold in the U.S. also continued its three-year decline. Total U.S. attendance fell by 9 percent to 1.4 billion -- the lowest level in nearly a decade. About 240 million fewer tickets were sold last year compared to 2004. At the same time, the average ticket price rose from $6.21 to $6.41.

It also was more expensive for Hollywood to market pictures. The average cost rose about 5 percent, from $34.4 million to $36.2 million. For specialty movies, such as the hits "Brokeback Mountain" and "March of the Penguins," marketing costs soared by 33 percent, reflecting the increasing competition for movies that often start in limited release.

Despite the success of independent and smaller movies, though, blockbusters continued to draw the largest audiences.

"Star Wars: Episode III -- Revenge of the Sith" was the top-grossing film with $380.3 million. Altogether, eight movies grossed more than $200 million each.

The good news for studios was that their average cost to make a movie dropped by about $2.5 million to $60 million. However, that figure didn't count the often substantial contributions of outside investors, which in some cases made up half of the budget.

Theaters have worried that their ticket sales are being undercut by DVD sales for home theaters. However, the MPAA unveiled results of an August study by Nielsen Entertainment/NRG of 3,000 moviegoers that indicated theaters remain popular.

It found that those who had the most DVD players, big-screen TVs, digital cable and other high-tech movie options also saw the most movies at theaters -- an average of 8.2 per year.

Also, 69 percent of those polled said they preferred to see a movie in a theater rather than at home -- although nearly a third agreed that their home offered "the ultimate movie-watching experience."

"Despite increasing competition for consumers' time and entertainment dollars, theatergoing remains a satisfying constant in people's lives," said Dan Glickman, MPAA chairman and chief executive officer. "That said, we can't bury our heads in the sand. We do have to attract customers and keep regulars coming back."