Time Warner On Way to No. 1 Box Office Rank

Time Warner may reclaim the no. 1 American ranking in movie box-office receipts from Walt Disney this year, bolstered by the December release of “Ocean’s 12.”Time Warner’s movie studios, the top revenue producer for two years until 2003, had $1.5 billion in North American sales as of December 26, according to box-office tracking company Nielsen EDI. Disney, with $1.43 billion, is unlikely to catch up, said the president of distribution at Disney’s Buena Vista Pictures in Burbank, Calif., Chuck Viane.“Ocean’s 12” has brought in $86.9 million and the movie is expected by analysts to help New York-based Time Warner post gains in sales from videos and television rights. Box-office success can be a precursor to profit from other areas, said JB Hanauer analyst David Joyce.“The more successful a film is in the original release, the greater it’s going to do in DVD sales, the greater it’s going to do on premium cable channels,” said Mr. Joyce, in Miami, who rates Time Warner shares “market perform” and doesn’t own them. “It has far-reaching effects.”Operating income in the film unit rose 27% in the first nine months of 2004 from a year earlier, Time Warner said last month.News Corporation’s film business probably will be the most profitable this year, Mr. Joyce said. The company ranks fourth in ticket sales behind Time Warner, Disney, and Sony, said Nielsen EDI in Los Angeles.Shares of Time Warner rose 11 cents to $19.55 in New York Stock Exchange composite trading yesterday. Disney shares rose 24 cents to $27.99 and News Corp. shares rose 17 cents to $19.22.Mr. Joyce said he expects News Corporation’s Fox Filmed Entertainment unit in Los Angeles to have a profit margin of 18.2% on 2004 revenue of $5.54 billion. The profit calculation includes worldwide ticket revenue and sales of home-videos and television rights, minus production and marketing costs, Mr. Joyce said.A Fox spokeswoman, Florence Grace, declined to comment.Time Warner is no. 2 in profitability with a margin of 13.3% on sales of $12.2 billion, followed by Viacom’s 10.3% on sales of $4.16 billion and Disney’s 8.4% on $8.68 billion.Ticket revenue at American and Canadian theaters this year probably will increase 1.4% to a record $9.4 billion as higher prices offset a decline in the number of tickets sold, according to box-office tracker Exhibitor Relations Company, based in Encino, Calif.. The average ticket price rose about 3% to $6.22 during the year, and attendance dropped 1.5%.The number of moviegoers increased by 3.5% in 2001 and attendance rose almost 9% in 2002, with the release of films such as “Spider Man,” “My Big Fat Greek Wedding,” “Harry Potter and the Chamber of Secrets,” “Star Wars Episode 2: Attack of the Clones” and “The Lord of the Rings: The Two Towers,” Exhibitor Relations President Paul Dergarabedian said in an interview.Attendance may rise again in 2005, when scheduled releases include “Star Wars” and “Harry Potter” sequels, and new titles such as “War of the Worlds,” Mr. Dergarabedian said.Movie production and marketing costs rose 15% in 2003, boosting the average film’s price tag to $102.9 million, according to the Washington-based Motion Picture Association of America.Time Warner’s box-office sales this year started with about $60 million from films released in 2003, including $36 million from “Mystic River.” The drama, directed by Clint Eastwood, doubled its box office take in 2004 after being nominated for a best-picture Academy Award, said the president of distribution at Warner Brothers in Burbank, Calif., Dan Fellman.“Having approximately $60 million carry over was a very important factor to jump-start my year,” he said.The studio’s biggest release was “Harry Potter and the Prisoner of Azkaban,” which took in about $249 million, he said.Disney wasn’t able to attract big audiences in the first half of the year with movies such as “The Alamo” and “Home on the Range,” Mr. Viane said. The company began to recover in August with the release of “The Village,” which took in $114.2 million, and “Princess Diaries 2: The Royal Engagement,” with $95 million, he said.Disney’s November movies closed a revenue gap with Time Warner. The Jerry Bruckheimer thriller “National Treasure” had sales of $133 million, and “The Incredibles” brought in $237 million through December 19. Disney gets 50% of profits from “The Incredibles” under its distribution agreement with Pixar, Joyce said.“What turned it around for us, obviously, is product,” Mr. Viane said. “When we put a stable of films together for the course of a year, you don’t purposely have a dry spell and then a hot streak, those things happen.”Disney’s year-end films – the Howard Hughes biography “The Aviator” and “The Life Aquatic With Steve Zissou,” a Bill Murray comedy – won’t be enough to reclaim the lead, Mr. Viane said. Those films came out last weekend.“No matter how you cut it, that positioning won’t change, “Mr. Viane said. “It will finish out exactly where it is today.”

Time Warner On Way to No. 1 Box Office Rank

Time Warner On Way to No. 1 Box Office Rank

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