October is usually a quiet period at the box office. It's a step up from the doldrums of September when the year's "not quite blockbusters" get dropped and a transition period into the busier winter movie season. It's also a time when Oscar contenders start hitting the scene.
Last week, the film Gravity rewrote the October box office records while also bringing forth the year's first Oscar contender. The film brought in $55.8 million domestically last weekend, besting the October opening weekend record held by Paranormal Activity 3. Helping Gravity's box office haul was the fact the film was marketed as an experience best seen in theaters. Commercials for the film showed off stunning visuals and suspense best viewed in a theater rather than a distraction-filled home.
The marketing worked, but was also helped by a critical consensus that Gravity is a triumphant film well worth the price of a 3D admission. In total, a stunning $44 million of Gravity's $56 million open weekend ticket sales came from 3D showings. That's a record and shows how effective a must-see-3D experience can be.
Currently, the film has a 97% on film aggregator Rotten Tomatoes, which along with positive audience ratings speaks well to the film's longevity. Let's look ahead to how Gravity might fare as box office competition heats up this weekend, and whether other films can copy its 3D success. Could Gravity be a boon for companies like IMAX (NYSE:IMAX) and RealD (NYSE:RLD), which are aiming for greater expansion of "premium" theater experiences?
Competition from Mr. Hanks
Last weekend, Gravity's biggest competition was Cloudy with a Chance of Meatballs 2, a film that earned a respectable $21 million, but played to an entirely different audience than Gravity.
|Film||Weeks in Box Office||Weekend Gross|
|Cloudy with a Chance of Meatballs 2||2||$21.0 million|
|Runner Runner||1||$7.7 million|
Source: Box Office Mojo
While Gravity was destined to score a high box office with its star power -- it features George Clooney and Sandra Bullock -- and fantastic production quality, it benefited from dull competition in its adult demographic. For as much as Gravity's star director Alfonso Cuaron took a difficult subject -- two astronauts alone in deep space -- and created a fantastic product, the weekend's main competition Runner Runner took a bland subject (yet another poker film) and made an even blander film. The movie was panned by audiences and critics alike.
This weekend features heightened competition in the form of Captain Phillips. It's a film that tells the real-life tale of a hijacked ship on the high seas. Most importantly, it:
1) Is a tension-filled film targeting the exact same adult-skewed audience as Gravity.
2) Is already receiving great reviews. The film currently has a 94% on Rotten Tomatoes.
3) Has Tom Hanks. While Hanks has been featured in a series of middling box office performers over the past seven years, he's still a major draw and an audience favorite.
So, the film should prove a capable competitor for the week's box office crown.
It'll likely be Gravity winning the week again
However, in spite of all Captain Phillips has working for it, Gravity will likely emerge on top of the weekend box office again. One key reason is that there's little competition at IMAX and 3D screens across the country. Remember that both IMAX and 3D showings come with higher ticket prices, meaning smaller audiences can drive higher grosses. With Gravity raking in not only $44 million from 3D showings, but also an impressive $12 million from IMAX presentations, it has major appeal across all forms of "premium" theater experiences.
While Captain Phillips was remastered for IMAX, nothing about the film screams a need for IMAX viewing. Across this weekend (and into November), Gravity will retain its grip on IMAX and 3D theaters, just another factor driving its longevity. Finally, while both Captain Phillips and Gravity appeal to an older audience, with its more sci-fi setting and focus on slick graphics, Gravity still has plenty of appeal to younger audiences, which could give it more expansive appeal across different demographics.
IMAX and RealD, winners of Gravity?
One final area that'll be fascinating to watch with Gravity is how the film continues performing in both 3D and IMAX. As I mentioned, Gravity should have a largely unchallenged run across both IMAX and 3D in coming weeks. It's an interesting case in that it's a movie dropped in October, which has jaw-dropping special effects (normally the domain of summer), yet will also be a top contender across several categories come Oscar season. This isn't your typical October film.
RealD, which licenses technology to enable 3D showings, could use the help. 3D technology led off with a bang when Avatar hit multiplexes. The film was a must-see event, opening with 71% of its box office from 3D showings. However, over time consumers tired of 3D showings and the extra costs associated with films in the format, especially as films used it in gimmicky ways. The pinnacle of this trend might have been this year's Great Gatsby, which was a forced use of the technology and led to only 33% of its opening weekend gross coming from 3D showings.
Gravity's clever use of 3D and amazing haul of 80% of box office in the technology last weekend shows that must-see-3D programming can be done right, especially in normally blockbuster-free months like October. Yet, there's also a reason RealD shares lost over 50% of their value in recent months while IMAX is at two-year highs: Gravity is hard to replicate. The film has an immensely talented director and a great cast, which led to the great product
In the end, that's why RealD revenue slid 13% last quarter while there is an installation backlog of 280 IMAX screens. Gravity might have done 3D right and will be a nice boost to RealD, yet it's a hard film to copy. However, something like larger screens and a better picture -- IMAX's basic value proposition -- is a more scalable idea across different films. Gravity shows that 3D can be "done right," but the idea that other films can replicate its success is still far from proven.
Eric Bleeker, CFA has no position in any stocks mentioned. The Motley Fool recommends Imax. The Motley Fool owns shares of Imax. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.