The big deal for Hollywood is not the record $10.8 billion that studios took in at U.S. theatres in 2012. It's the fact that the number of tickets sold went up for the first time in three years.
Thanks to inflation, revenue generally rises in Hollywood as admission prices climb each year. The real story is told in tickets, whose sales have been on a general decline for a decade, bottoming out in 2011 at 1.29 billion, the lowest level since 1995.
The industry rebounded this year, with ticket sales projected to rise 5.6 per cent to 1.36 billion by Dec. 31, according to box-office tracker Hollywood.com. That's still well below the modern peak of 1.6 billion tickets sold in 2002, but in an age of cozy home theatre setups and endless entertainment gadgets, studio executives consider it a triumph.
"It is a victory, ultimately," said Don Harris, head of distribution at Paramount Pictures. "If we deliver the product as an industry that people want, they will want to get out there. Even though you can sit at home and watch something on your large screen in high-def, people want to get out."
Domestic revenue should finish up nearly 6 per cent from 2011's $10.2 billion and top Hollywood's previous high of $10.6 billion set in 2009.
The year was led by a pair of superhero sagas, Disney's "The Avengers" with $623 million domestically and $1.5 billion worldwide and the Warner Bros. Batman finale "The Dark Knight Rises" with $448 million domestically and $1.1 billion worldwide. Sony's James Bond adventure "Skyfall" is closing in on the $1 billion mark globally, and the list of action and family-film blockbusters includes "The Hunger Games," ''The Twilight Saga: Breaking Dawn â€” Part Two," ''Ice Age: Continental Drift," ''Madagascar 3: Europe's Most Wanted," ''The Amazing Spider-Man" and "Brave."
While domestic revenues inch upward most years largely because of inflation, the real growth areas have been overseas.
International business generally used to account for less than half of a studio film's overall receipts. Now, films often do two or even three times as much business overseas as they do domestically. Some movies that were duds with U.S. audiences, such as "Battleship" and "John Carter," can wind up being $200 million hits overseas.
Before television, movies had ticket sales estimated as high as 4 billion a year in the U.S. in the 1930s and '40s. But movie-going eroded steadily through the 1970s as people stayed home with their small screens. The rise of videotape in the 1980s further cut into business, followed by DVDs in the '90s and big, cheap flat-screen TVs in recent years. Today's video games, mobile phones and other portable devices also offer easy options.
It's all been a continual drain on cinema business, and cynics repeatedly predict the eventual demise of movie theatres. Yet Hollywood fights back with new technology of its own, from digital 3-D to booming surround-sound to the clarity of images projected at high-frame rates, which is being tested now with "The Lord of the Rings" prelude "The Hobbit: An Unexpected Journey," shown in select theatres at 48 frames a second, double the standard speed.
"People want to escape. That's the nature of society," said Dan Fellman, head of distribution for Warner Bros. "The adult population just is not going to sit home seven days a week, even though they have technology in their home that's certainly an improvement over what it was 10 years ago."