The Twelve Days of Box Office: Day Three
By David Mumpower
December 24, 2012

Friends forever!

Welcome to day three of the 12th annual 12 Days of Box Office. Yes, you read that correctly. We have been analyzing these dozen days for a dozen years now. That’s like 365 days worth of box office analysis! And for all of these years, you assumed I was good at math…

Ordinarily, I handle this introduction on the first day but since December 22nd fell on a Saturday this year, Tim Briody and John Hamann had the honor. Tim did a wonderful job in hitting the highlights. I am not going to bury you with statistics and calculations today. That’s more of a Wednesday column. For now, all I want to do is reinforce his comments with a couple of data points. There will be a little math but it’s fairly straightforward. I promise, Christmas pinky-swear.

The purpose of the 12 Days of Christmas box office analysis is to demonstrate how the rising tide lifts all boats. This is the strongest period for movie revenue on the calendar each year. There is no debate on the issue. If you have ever wondered why there is always so much great product available in movie theaters at the end of the year, you now know why. The cause is that consumers have ample free time to watch as many theatrical releases as they like. The effect is that movie studios seed the marketplace with some of their finest products.

Before we get too far ahead of ourselves, let us consider the rising tide aspect. The only two examples I plan to use today – I realize it is Christmas Eve so I will be less verbose than normal – are Rise of the Guardians and Wreck-It Ralph. These two titles were released at Thanksgiving. The first rule of the movie release cycle is that when new product is available, old product is pushed aside. In December, there is an exception to this rule. Any title that maintains exhibitions until the end of the year receives the Holiday Bump.

Rise of the Guardians is a great example. Consider its weekdays for the first week of December. During that Monday-to-Friday period, the Thanksgiving release garnered roughly $2.54 million in box office receipts. All of you who read the Daily Box Office columns at BOP each summer know that this total just depreciates between 40 and 60% each week, depending on the film/genre. Rise of the Guardians fell modestly to $2.17 million during its second set of weekdays. This is a 15% weekly decline, a very solid figure for a title.

Last week is when the situation grew more interesting. Rise of the Guardians increased to $2.71 million during the Monday-to-Thursday box office timeframe. This particular title gained 25% from the previous week and is up 6.7% from the first week of the month to the third week of the month. Generally, the only titles that do this are runaway blockbusters such as Taken and The Sixth Sense that demonstrate borderline unprecedented box office stability. In December, this is modus operandi for all titles in release.

I recognize that there is an obvious counterpoint to the above. Yes, Rise of the Guardians is a holiday-themed feature. As such, it could benefit from seasonal interest. This is why I included Wreck-It Ralph in the discussion as well. The charming Disney title debuted during the first week of November. By any reasonable standard, it should be reaching the end of its box office run. After all, films are expected to depreciate, right?

Wreck-It Ralph earned $1.36 million during its first set of December weekdays. A realistic expectation would be for the movie to decline 40% week to week, which would mean $820,000 two weeks ago then $490,000 last week. Instead, its box office totals were $1.10 million for the second set of December weekdays followed by $1.20 million last week. Yes, it increased $100,000 despite the fact that Wreck-It Ralph lost almost 500 venues.

Here is the most amazing statistic of all. On Monday, December 3rd, Wreck-It Ralph earned $308,767 from 3,087 play dates. Last Thursday, December 20th, everyone’s favorite 8-bit villain turned hero garnered $354,174 from 1,863 play dates. The same movie earned roughly 15% more in 1,225 fewer exhibitions. The per-location average for Wreck-It Ralph was $100 on December 3rd; it was $190 on December 20th. Yes, that is 90% improvement in an industry that ordinarily expects films to decline.

This is the Holiday Bump demonstrated in a single example. Pointedly, the skew is even larger with Rise of the Guardians. That movie earned $565,496 on December 3rd then grew to $858,445 on December 20th. During this timeframe, the film lost 285 play dates yet its revenue increased 52%. That’s mathematically inexplicable at any other time of the year other than the end of December.

And here is the most amazing aspect of the Twelve Days of Box Office phenomenon. Rise of the Guardians and Wreck-It Ralph will maintain this performance until the end of the year despite the fact that they will once again cede theaters to new releases tomorrow. They should at least match and feasibly could gain revenue from last week to this week. And these are titles that are less in demand. The behavior will be more dramatic with more popular titles.

Last year, Mission Impossible: Ghost Protocol earned $124.7 million from December 21st until January 2nd. It was the seventh largest domestic hit of 2011. A full 60% (!) of its final domestic take of $209.4 million occurred during this two week window. A movie can turn into a runaway money train overnight during the Twelve Days of Box Office.

I do not expect 2012 to feature such a success story. A key reason for this is that the calendar configuration is not as conducive to extended revenue as has been the cast in past years. With Christmas Eve and New Year’s Eve both falling on Mondays, there are fewer additional potential vacation days for North American consumers. And as long time readers know by now, free time is the hidden ingredient in all box office inflation scenarios.

Beginning on Wednesday, we will examine exactly how and why the calendar configuration hurts the titles in release a bit more than usual. We will also examine the new Christmas releases and take a hard look at what’s in store for The Hobbit. There will be a column tomorrow as well, but it will be fairly basic as I know that everyone will be spending the holiday with friends and family…and many new toys. I hope you get all the presents you want.