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Saving 'Alexander'
Domestic audiences snubbed some big-budget flicks in '04. But even bombs make money these days.
December 22, 2004: 3:03 PM EST
Krysten Crawford, CNN/Money staff writer

NEW YORK (CNN/Money) - Alexander the Great conquered a nice chunk of the world before he died young. The makers of "Alexander," the three-hour Oliver Stone saga about the Greek warrior's life, are banking on a similar conquest before it's too late.

2004 Year in review Quotes of the year Banned ads

The film has, by most accounts, flopped in North America. With a worse-than-expected $33 million in ticket sales in its first three weeks out, industry analysts say "Alexander" is all but done in domestic theaters. That's more than a flesh wound for Warner Bros. and other backers, which spent nearly $200 million to make and market "Alexander," according to estimates from BoxOfficeMojo.com.

But the film's investors may win the battle yet. Thanks to foreign movie buffs and DVD collectors, "Alexander" might just eke out a profit.

"It's almost impossible to lose money on a movie anymore," said Scott Hettrick, the editor-in-chief of DVD Exclusive, speaking generally about the industry.

Looking back on 2004, there's one trend worth noting: Overseas audiences and DVD buyers are now critical drivers of movie profits. Both consumer types came to the rescue this year of a number of blockbuster wannabes that bombed at the domestic box office.

"For the really big-budget films, the North American box office gross does not always have to be spectacular," said box office analyst Gitesh Pandya. "International is becoming a bigger part of the pie and so are worldwide video sales."

CLARIFICATION
Warner Bros.' total box office receipts have exceeded $3 billion in 2004. The studio is ranked No. 1 by overseas market share, with $2 billion in box office receipts, and No. 2 by domestic market share, with more than $1 billion in ticket sales.

Indeed Warner Bros., owned by Time Warner (Research) (as is CNN/Money), has announced that its worldwide box office grosses have already hit $2 billion in 2004, making it No. 1 by global market share. Runners up Walt Disney Co. and Sony Corp. are looking at breaking $1.5 billion, according to Variety.

And DVD sales are expected to reach a record $14.6 billion this year, a 24 percent increase over 2003, according to Video Store Magazine. Studios pocket as much as 80 percent of a DVD sale, compared to about half of a movie ticket purchase.

Samurais & Trojans

Perhaps the best example in 2004 of the power of the foreign movie buff was "Troy," another Warner Bros. project with a Greek theme. Released in the U.S. this spring, the $225 million extravaganza was coming up short, with $133 million in domestic ticket sales, according to BoxOfficeMojo.com. But then came a worldwide release that added another $364 million in revenues. The Brad Pitt epic went from fizzle to sizzle.

There were other bust-to-boom examples in 2004: Universal's "Van Helsing," Walt Disney's "The Village," and "Collateral" from DreamWorks (Research). More recently, "Bridget Jones: The Edge of Reason," just broke even as measured by North American receipts. Helped in large part by British audiences, the Renee Zellweger flick has hauled in an extra $140 million overseas.

To be sure, foreign crowds don't always come to the rescue. "The Alamo," the Disney (Research) rendition of the 1836 standoff between the Mexican army and Texan colonists, took in just over $22 million in the U.S. and Canada and a paltry $3 million in foreign ticket sales. BoxOfficeMojo.com says "The Alamo" cost almost $140 million to produce and market.

Understanding the dual effect of overseas receipts plus DVD sales requires going back a year (sales are still early for many 2004 films on DVD). A year ago Warner Bros. rolled out "The Last Samurai," a $170 million production starring Tom Cruise.

North American audiences were drawn to the tale of a Civil War veteran who leads Japanese soldiers to battle, but they weren't swept away. Domestic ticket sales came to $111 million, according to BoxOfficeMojo.com.

Then the foreign markets kicked in, adding another $350 million in ticket sales.

And DVD sales have been just as spectacular. "The Last Samurai" is one of the year's best-selling DVDs, with more than $100 million in revenues through November, according to DVD Exclusive, a monthly trade publication.

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Movie making is "absolutely a global business right now," said Hettrick of DVD Exclusive. "Studios want to make movies that play around the world."

Brandon Gray, the president of BoxOfficeMojo.com, agrees with that assessment, but cautions against sounding the death knell for the domestic box office.

North America, he says, is still the biggest movie market in the world and is the biggest source of revenues for most movies. The top three studios by U.S. ticket sales -- Sony (Research), Disney and Warner Bros. -- have all exceeded $1 billion in box office receipts.

What's more, Gray notes, domestic draws set the stage for international performance and help fuel sales of DVDs, which have been bigger moneymakers for Hollywood studios than ticket sales.

"Domestic is still the engine that drives the train," said Gray.

"Alexander" investors sure hope not.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.