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Scorsese’s ‘Hugo’ Faces Tough Road to Profitability After Soft Opening

Produced by Graham King for more than $150 million, the 3D film debuted to just $15.4 million; Paramount still insists it will enjoy an extended holiday run

Martin Scorsese’s first effort at a family film, big-budget 3D movie “Hugo,” now has a big hill to climb at the box office.

Debuting at just 1,277 theaters in the U.S. and Canada last Wednesday, the PG film grossed only $15.4 million over the five-day Thanksgiving holiday period.

Graham King's GK Films produced "Hugo" at a cost of well more than $150 million. Paramount is distributing the film, and scaled down the ambition of the its North American debut amid soft pre-release tracking on the eve of the premiere.

While "Hugo" actually surpassed Paramount's conservative five-day opening prediction of $10 million – $12 million, the film's budget will make profitability on the Scorsese project a longshot, a film producer told TheWrap.

“At that budget, you have to do $450 million theatrical,” the producer said. “And there’s no franchise, there’s no ancillary rights, there’s no merchandising, there’s no DVD because the 3D is intended to be seen in the theater.”

So what happened?

This producer questioned "Hugo's" star power, which was led by Ben Kingsley and Sacha Baron Cohen.

"Sacha Baron Cohen is not going to get anyone in the theater," he said. "Not to have a star is rough."

A marketing executive at a rival studio, meanwhile, acknowledged that people who see “Hugo” generally like it.

“But when somebody says, ‘What should I see with my kids,’ people say, ‘I don’t know. ‘Happy Feet’ or ‘The Muppets.’”

Paramount executives still insist the movie will be fine.

“As we play through December we are going to continue to expand, we’re going to continue to support the movie, and we’re going to continue to find both of those audiences responding to the movie,” Paramount president of marketing and distribution, Megan Colligan, told TheWrap.

She pointed out that Paramount intentionally opened “Hugo” at only 1,277 locations, compared to  3,440 for Disney’s “The Muppets” and 3,376 for Sony/Aardman’s “Arthur Christmas,” both Thanksgiving PG competitors.

Based on per-theater average, Colligan noted, “Hugo” compared favorably to "The Muppets," which had a $41.5 million opening — "Hugo" had a per-location average of $12,043, while “The Muppets” averaged $12,209.

Also read: Review: Scorsese Gets 3D Right — It Adds Real Depth to 'Hugo'

But “The Muppets” cost a modest $45 million to make, and re-launched a merchandising juggernaut. “Arthur Christmas” had a heftier $98 million budget, but its anemic $16.3 million weekend in North America is being mitigated by solid play in Aardman's European homeland.

Colligan noted that the movie has been extremely well reviewed and, as of Monday, had a remarkable 96 percent fresh rating on Rotten Tomatoes.

She expects the critical acclaim to translate into a raft of awards nominations — which she believes will translate into more people watching the movie.

Defending the studio's platform-release strategy, Colligan said Paramount will expand "Hugo's" release to about 1,800 locations next weekend and even more on the weekend of Dec. 9.

“We have real opening money to be spending these next two weeks,” she said. “This is not just holdover money. This was a plan that was created by design for a long life in the marketplace.”

As for Graham King, Colligan said he offset his risks by pre-selling international territories and “doesn’t have humongous numbers in there. I think he’s going to be able to get where he needs to be.”

Other box-office watchers aren’t so optimistic.

“It’s expanding?” one marketing executive asked TheWrap. “Good luck. See where that per-screen average goes.”

He said that “Hugo” is a tough movie to market. Based on a children’s book, it is set in France in the 1930s and is about an orphan who lives in a train station and finds himself working alongside a robot while investigating his father’s death.

Added another producer: “It’s like trying to get kids to see an animated version of ‘Amelie,’” he said. “There are a great many films that don’t work out at the box office and many bad movies that do.”