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Foreign Markets Less Interested in Hollywood

The Holloywood Reporter asks the question, just how bad was the theatrical business last year that some pundits in and out of the industry were predicting the demise of the conventional movie house?

Rental figures -- the bare-bones revenue returning to the major U.S. studios last year after the exhibitor's cut and promotion and distribution fees -- reveal that worldwide theatrical revenue dipped 10.6 percent, $6.68 billion from 2004's record $7.48 billion. Hardest hit was the foreign market, which showed a decline of 16.7 percent, $3.19 billion compared with '04's $3.83 billion.

The domestic market dropped only 3.2 percent, $3.49 billion to the previous year's $3.6 billion. The Year of the Slump results were circulated confidentially this year to distribution executives of the six major studios by the MPA, the overseas arm of the MPAA. Coincidentally, the MPA theatrical revenue report was obtained just as the industry is in the throes of a vibrant comeback, with some studio honchos forecasting a bonanza in 2006, equal or better than the benchmark 2004.

Yet the lackluster 2005 performance appears to have triggered a warning alert, as several Hollywood movie studios have started serious retrenchment programs.

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