What's Behind the Dismal Winter at the Box Office

Theater stocks slide and grosses drop 15 percent as "Jack the Giant Slayer" leads a season of discontent and a glut of grim action flops leaves few studios unscathed.

This story first appeared in the March 15 issue of The Hollywood Reporter.

When Bryan Singer sat down at his computer in mid-January and read Internet comments criticizing a new Warner Bros. poster for his big-budget epic Jack the Giant Slayer, he fumed. He didn't care for the cartoonish image of the film's stars brandishing swords and standing around a swirling beanstalk. So Singer complained on Twitter. "Sorry for these crappy airbrushed images," he wrote Jan. 16, irking Warners' powerful marketing head Sue Kroll. "They do the film no justice. I'm proud of the film & our great test scores." An insider confesses, "Bryan felt like he had to apologize to his fans."

The dust-up points to a long and fraught process culminating with the low $27.2 million North American debut of Jack the Giant Slayer during the March 1-to-3 weekend, the latest in a string of dismal 2013 domestic releases. Revenue and attendance both are down a steep 15 percent from the same period in 2012, wiping away gains made last year. Jack might have cost far more than any of the other misses, but in assessing the carnage, there's a collective sense that Hollywood is misjudging the moviegoing audience and piling too many of the same types of movies on top of one another.

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There were 13 R-rated films opening through the first nine weekends of 2013, an unprecedented number even for off-peak months. Many of those films were violence-laced action pics heavy on gunfire and featuring a parade of aging stars. "It's true, a lot of movies have been cannibalizing each other," says Dan Fellman, president of distribution at Warners, which distributed Sylvester Stallone's dud Bullet to the Head (Joel Silver and IM Global partnered on the pic). Adds another studio distribution chief: "A lot of these films came out in the midst of the gun-control discussion sparked by the Newtown school shooting. It was terrible timing." Warners' homegrown Gangster Squad also fired blanks, and Fox's Bruce Willis starrer A Good Day to Die Hard will be the lowest-grossing film in the franchise domestically. It has earned nearly $60 million to date and likely won't get to the $83 million earned by the first Die Hard in 1988 (the sequel has earned north of $160 million internationally).

Universal's Identity Thief, which opened in February, is the only 2013 release to have crossed $100 million in North America, with earnings of $107.4 million through March 3. In February 2012, three films grossed more than $100 million: Safe House, The Vow and Journey 2: The Mysterious Island. Overall domestic revenue this February plummeted 24 percent, sparking alarm on Wall Street. That, coupled with Jack's weak debut -- driving revenue down 38 percent from the same weekend a year ago, when Dr. Seuss' The Lorax opened to $70.2 million -- caused analyst Eric Wold of B. Riley Caris to downgrade theater chains March 4, sending shares of Regal, Cinemark and Carmike Cinemas lower.

The finger-pointing has begun over why Jack failed to connect. Warners' New Line division and Legendary Pictures spent nearly $200 million to produce the revisionist fairy tale thanks to costly special effects. Tack on a hefty marketing spend, and the price tag grew to close to $300 million -- reminiscent of last year's Battleship, which resulted in a sizable loss for Universal after topping out at $303 million globally. Box-office experts say Jack is headed for the same fate unless it takes in $400 million to $500 million worldwide. In its favor: Early response in select Asian markets has been slightly better.

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Sources say Singer ultimately was pleased with Warners' marketing campaign, but the director's impetuous tweet won't soon be forgotten by studio executives, who promptly demanded it be deleted (it's still there). What Singer's camp can't quite reconcile is the March 1 release date. Jack was supposed to open in June 2012, when older kids and college-age fanboys would be out of school, but more time was needed for special effects and to make the PG-13 film more kid-friendly. A new March 22, 2013, date was planned because it coincided with spring break. But the filmmakers were startled when it was again moved, this time to March 1, one week before the release of Disney's Oz the Great and Powerful, a film that targets the same audience, and further from the Easter holiday. Oz is tracking for a $75 million-plus opening, though there are no guarantees in the current climate. "They always said they'd find a place when kids were available. Also, everybody [at Warner Bros.] underestimated Oz," says the source.

Fellman says March 1 was the best date because there were no other event films (animated tentpole The Croods opens March 22). "Multiple reasons go into a dating decision, including the international rollout," he says, adding that the market often can sustain multiple event pics.

Privately, studio executives concede that Jack was a feathered fish, neither a straight fanboy tentpole that Singer (X-Men, Superman Returns) is famous for nor a pure family play. "Sometimes you simply have a movie that is rejected," laments one Warners executive, a common refrain these days in Hollywood. "You can spend as much as you want, market it a zillion different ways, and it still doesn't work."