Which movie generated Hollywood's heftiest 1991 revenues? Terminator 2: Judgment Day, according to dozens of newspaper, magazine, and TV stories in the last month. They were all wrong.
True, T2 was indeed No. 1 on Variety's list of the top North American theatrical money-makers of the year, with $112 million in receipts. But while such box office-based figures were the best way to measure the industry's fortunes when the chart was created 46 years ago, in the last decade, revenues from home video and foreign theaters have overtaken domestic theatrical receipts, which, say analysts at the investment firm Goldman Sachs, now account for only 20 percent of annual movie-studio income.
So what was the real winner in 1991? ''The true revenue champ last year,'' says Bart Story, director of market research for Video Store magazine, ''was Fantasia.''
According to Story, Fantasia's video release is worth $350 million in retail sales. While the studios won't reveal cassette earnings, industry experts say Disney netted 40 percent of the retail value, $140 million. Add to that about $33 million from Fantasia's domestic and foreign theatrical rereleases last year, and an estimated $90 million from overseas video markets, and by 1992's end Fantasia's 50th-anniversary release is expected to have earned $263 million; T2's total earnings in the same markets shouldn't exceed $250 million. Disney should also come close to duplicating Fantasia's tally with the April video release of 101 Dalmatians, following its hugely successful 1991 theatrical run.
With so much of movies' earnings coming from secondary markets, why is attention still lavished on the first round of box office returns? According to John Krier, whose company, Exhibitor Relations, tracks weekly grosses, such figures are a promotional tool. ''Movie executives use box office standing to confer status when a picture opens,'' he says. ''But they don't break out individual profit figures in annual reports.'' Production honchos, he says, also downplay the radical growth of ''piggyback'' markets to protect their power.
The cassette industry is not only providing fat bonuses for hits, it's also changing the fate of movies with lackluster box office performances, judging from Story's numbers (recently published in the newsletter Video Week). For each of the top 25 movies on video in 1991, cassettes provided at least a third as much income as theaters did; in spots 26 and below, video revenues almost always beat theatrical revenues. MGM/UA's January video release of Thelma & Louise has already matched its theatrical take of $20 million; the movie should earn even more if it's reissued as a $20 or $25 tape. Sometimes video performs a truly dramatic save. Disney's 1990 The Rescuers Down Under took in a meager $14 million from theaters but $65 million from tapes. The live-action flops Life Stinks, Dutch, Delirious, Another You, and Showdown in Little Tokyo combined pulled in a truly pitiful $9.3 million in theaters; on video they're expected to collect nearly four times that much not enough to make them smashes but enough to keep their creators in business.
Foreign box office is now nipping at the heels of home video as Hollywood's most promising short-term growth market. This year, for the first time, Twentieth Century Fox earned more in theaters overseas than domestically. While most of the other majors suffered a drop in foreign income in '91, they expect overseas expansion in the next decade. Fox movie chairman Joe Roth predicts his studio could be making 75 percent of its theatrical money abroad by the end of the decade.
Of course, as Art Buchwald learned when he sued Paramount for a share of Coming to America's receipts, movie accountants don't always count either cassette or foreign profits. ''If they did, they'd have to pay out more to writers and actors,'' says Andy Marrus, a video-market analyst. ''The studio-production branches all belong to conglomerates. But it's to their advantage to treat tapes, cable, and syndication like separate divisions.'' Industry giants like Steven Spielberg and Arnold Schwarzenegger have the clout to demand hefty percentages of revenues from these markets. But by and large, Hollywood's creative people aren't being cut in proportionately and as the piggyback profits grow, studio fiscal reports are likely to reveal less than ever of the big picture.