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Hooray for Hollywood
Narnia and Harry Potter have fueled a box office comeback and King Kong awaits. But what about 2006?
December 12, 2005: 1:56 PM EST
By Paul R. La Monica, CNNMoney.com senior writer
Wild about Harry:
Wild about Harry: "Harry Potter and the Goblet of Fire," the fourth movie in the popular series about the boy wizard, has raked in a magical $244 million so far at the box office.
This lion isn't cowardly:
This lion isn't cowardly: "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" took in more than $67 million during its first weekend, better than what most analysts expected.
Photo GallerylaunchSee more photos

NEW YORK (CNNMoney.com) - The chicken, wizard and lion held up their end of the bargain. Now it's up to the monkey to help Hollywood finish the year on a strong note.

"The Chronicles of Narnia: The Lion, the Witch and the Wardrobe," the Walt Disney (Research)-produced movie based on the popular C.S. Lewis children's book, grossed $67.1 million at the U.S. box office this weekend. That take was better than the $50 million or so that several box office analysts were expecting.

The strong debut for Narnia is the latest bit of good news for the beleaguered movie industry, which is in the midst of a year-long box office slump.

After a weak summer, ticket sales have bounced back a bit during the fall thanks to crowd pleasers like Disney's computer-animated movie "Chicken Little," and "Harry Potter and the Goblet of Fire", the fourth movie from the series about the boy wizard.

According to figures from movie tracking firm Box Office Mojo, "Chicken Little" has grossed $127.2 million so far while "Goblet of Fire," released by Warner Bros., has grossed $244 million. (Time Warner (Research), which owns Warner Bros., also owns CNNMoney.com)

And coming on Wednesday is perhaps the most anticipated movie of the year, "King Kong."

A holiday season fitting for a "King"

Robert Bucksbaum, president of box office tracking firm Reel Source, said he is conservatively estimating that King Kong will generate more than $80 million during its first five days.

Another box office analyst, Exhibitor Relations Co. president Paul Dergarabedian, said "King Kong" should easily surpass $100 million at the box office by the end of the weekend.

And Gitesh Pandya, editor of BoxOfficeGuru.com, said "King Kong" could wind up doing as well as the last movie by "King Kong" director Peter Jackson. "The Lord of the Rings: The Return of the King" grossed more than $124 million during its first five days in December 2003.

The strong holiday season certainly must have Hollywood executives feeling a lot better than they did a few months ago. Pandya said that thanks largely to Potter, Narnia and Kong, ticket sales could wind up being down only four percent this year.

Sure, that's still a decline. But considering that attendance was down about 8 percent year-over-year before November, it's a nice comeback.

"After the year Hollywood had, it desperately needed a big bang for a finish. And this is shaping up to be one of the strongest holiday seasons ever," Pandya said.

The healthy year-end box office would appear to be good news for beaten down media stocks like Disney, Time Warner, Fox-owner News Corp (Research). and Viacom (Research), which owns Paramount and just inked a deal to buy DreamWorks SKG. The movie industry's woes are one reason behind the poor performance of these stocks in 2005.

And huge ticket sales for "King Kong" would also bode well for conglomerate General Electric (Research), which owns Universal, the studio behind King Kong.

What's more, the recent box office turnaround has raised hopes that 2005's slump was just an anomaly and that the industry will bounce back next year. But analysts warn that Hollywood still has a lot of work to do in order to avoid another poor year in 2006.

Stories, not stars

Bucksbaum said he hopes Hollywood may finally have learned that it can't just throw lots of money at a well-known actor or actress and expect them to carry a film.

He points out that most of this year's biggest hits, including the Narnia and Potter films as well as the year's top grossing film, "Star Wars: Episode III - The Revenge of the Sith," did not have huge stars in them. "War of the Worlds", starring Tom Cruise, was the one notable exception.

"I don't think any actor is more important than the story. It's the story that sells at the box office," said Bucksbaum.

He added that the perfect model for Hollywood to follow is that of Pixar (Research), the computer animated powerhouse that has yet to have a movie fail at the box office. He doesn't mean that studios should stop making live-action movies, of course, but that they should focus more on interesting and unique plots, rather than just big marquee names.

"Pixar is not paying actors huge amounts of money and their movies are just phenomenal. People don't need to see actors doing the same thing over and over again," Bucksbaum said.

Dergarabedian agreed that movie studios have to be more careful in what they green light. Hollywood is no longer the only game in town, so to speak, from an entertainment standpoint. In order to attract audiences, the quality of movies has to improve.

"It's a much more competitive marketplace than ever before. Technology is allowing people to get all kinds of entertainment where they want, when they want and how they want," Dergarabedian said. "To get people away from their big-screen TV, away from their game console and away from their iPod, the movies have to be that much better."

Pandya is cautiously optimistic that studios won't lapse into their old lazy habits.

"People complain every year about too many sequels and remakes," he said. "The key is that Hollywood only needs to recycle to a certain extent each year," he said.

To be sure, there are several high-profile sequels on tap for next year which are expected to do well, such as "X-Men 3" and "Mission: Impossible 3." But analysts also have high hopes for the movie adaptation of the best-selling novel "The Da Vinci Code" as well as Pixar's latest movie, "Cars."

With that in mind, Dergarabedian said that the industry should rebound next year and that people will soon forget about the weakness in 2005. After all, it shouldn't be too difficult for box office figures to eclipse this year's totals. That's especially true for the first few months of 2006 since comparisons won't be that difficult.

But if next year starts out with a whimper, then that could be a sign that the industry may in fact be in the beginning of a steady, long-term decline.

"If we get into 2006 and the industry is still having trouble exceeding the take from a year before, then that says a lot since it should be easy to do. Another slump in 2006 would not bode well for the future," Dergarabedian said.

For a look at more media and entertainment stocks, click here.

For more about News Corp's ties to Narnia, click here.

The reporter of this story owns shares of Time Warner through his company's 401(k) plan.  Top of page

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