'Hannah' pushes exhibs to go digital
3-D titles force theaters to quicken conversion.

March 14, 2008

Ten words are all Hollywood studios need to utter when lobbying theater owners at ShoWest this week to convert more screens to digital 3-D: "Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour." The Disney film made box office history last month when singing its way to a $31.1 million opening -- on only 638 screens. That translated into a $45,561-per-screen average as well as the best debut ever for a film bowing on fewer than 700 screens.

Through March 2, the concert film grossed $63.1 million, although it cost less than $7 million to produce.

There's no doubt that it might be difficult to replicate the tween mania sparked by "Hannah Montana," but the concert film's success is the most promising example to date of digital 3-D's revenue-generating potential.

Fans were willing to shell out as much as $17-$20 for a ticket, although a regular digital 3-D feature is generally only $3 to $4 higher than a normal movie ticket.

In an industry still concerned about its growth potential outside of ever-more expensive concessions, 3-D is a valuable asset in terms of being able to expand revenue streams.

The need for more 3-D screens was painfully apparent to frosh distrib National Geographic Films, whose concert film "U2 3D" got buried by "Hannah Montana" despite glowing reviews from both the mainstream and music press after unspooling at the Cannes Film Festival in May.

Nat Geo decided to open "U2 3D" on only 61 screens on Jan. 25 before expanding nationwide on Feb. 14. The only problem was that after "Hannah Montana" opened to record-breaking numbers on Feb. 1, "U2 3D" had to push back its expansion to Feb. 22.

Even then, it continued to be overshadowed by Disney's concert film. To date, "U2 3D" has grossed only $5.7 million domestically.

Yet despite the impressive numbers earned by "Hannah," many theater owners in the U.S. have been reluctant to make the pricey investment and convert to digital, saying they -- and not the studios -- are being made to bear the brunt of the cost.

The majors are betting, though, that "Hannah" might result in exhibs doing some soul-searching. Only digital screens were able to project "Hannah," meaning the rest weren't able to partake in the action.

"What it portends is that those folks who have been dragging their feet now have to go back and review their decisionmaking process," one top studio exec says.

"Hannah" isn't the only example. Last fall, the box office might of Paramount's digital 3-D epic "Beowulf" caught many by surprise. Film grossed $82.2 million domestically.

National Assn. of Theater Owners prexy John Fithian says movies such as "Beowulf" and "Hannah" help assure exhibs that Hollywood will provide quality product.

Fithian readily agrees that digital 3-D can provide a valuable, additional revenue stream.

There are roughly 37,000 theater screens in the United States, about 4,600 of which are digital, up dramatically from just a few years ago.

But studios want more -- and want them to be done quickly -- considering the number of weighty 3-D titles in the pipeline for 2009.

Those include DreamWorks Animation's "Monsters vs. Aliens" and James Cameron's "Avatar" from 20th Century Fox. There's also Fox's "Ice Age III" and several Disney titles, including the re-release of "Toy Story" in digital 3-D.

Disney has been at the forefront of heralding modern-day 3-D, with DreamWorks Animation's Jeffrey Katzenberg more recently taking up the pulpit. As of 2009, DreamWorks Animation will make all of its movies in 3-D.

"I've heard for so long that this is a fad. It's not a fad when people are making so many movies in 3-D," says Chuck Viane, Disney's prexy of distribution. "That's the beginning of change."

This summer will bring another big test for 3-D with "Journey to the Center of the Earth 3D." New Line film, which will now be distributed by Warner Bros., is skedded to bow July 11.

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