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The 2008 summer box office has provided audiences with a number of memorable battles. Iron Man fought his nemesis, another man in iron, while the Incredible Hulk provided some variety by fighting another hulkish being. Elsewhere, Indiana Jones battled Russians, and characters in The Happening faced the hellish prospect of Mark Wahlberg acting. But the most interesting battle of the season is occurring behind the scenes, as 2008 fights to top the amount of money brought in during box office 2007. So far, it’s neck and neck.

After some early success that provided a healthy cushion against last year, subsequent weak weekends eroded that premium until it was finally depleted. But not all hope was lost, as a strong June got its game on and sent comparisons crying home to momma. After last weekend, when “The Incredible Hulk” made its debut on top, 2008 regained its position over 2007, having made 0.2% more. This is too small a premium to matter; especially when one considers that attendance levels are lower this year (higher ticket prices create the boost from last year).

Given the neck-and-neck nature of the two years, the question remains whether there will be enough strength in the rest of the summer to rebuild a cushion that could last through the year. There remain some major films yet to be released, notably “The Dark Knight,” but this upcoming weekend is one of the biggest question marks.

Two major films are being opened that will likely play to similar audiences. Warner Brothers is releasing “Get Smart,” a spy comedy adapted from an age-old TV show. The film has some star power and is being well (and extensively) marketed as equal parts action and comedy. Goldman Sachs expects a debut in the high-$30 million range.

The other new release is Paramount’s “The Love Guru,” which will have to fight “Get Smart” for the comedy-seeking audience. While Guru has a bigger star in Mike Myers, it has also received horrible, scorched-earth reviews that may limit repeat viewings. Goldman puts Guru’s debut around $25 million.

These lower key releases show that this weekend is not considered a crucial one for the season. But it still may eke out a win over the comparable one in 2007, given the continuing appeal of such recent releases as “Kung Fu Panda,” “Sex and the City” and of course, “Iron Man,” which recently became the first film of the year to make more than $300 million.

Marvel Entertainment’s green machine is set to roll into theaters this weekend, as its latest feature film from a stable of comic-book characters hits the big screen. Oh, and there’s a bulked-up angry chlorophyll-colored guy in it.

“The Incredible Hulk” opens June 13 and is expected to earn $50 million to $60 million in its first weekend, based on early buzz and word of mouth.

That figure implies a domestic box office of about $150 million, according to Drew Crum, an analyst with Stifel Nicolaus. After attending an advanced screening of The Hulk, Crum said, “it can hit this target.” That would make it easily the top film of the weekend, with competition coming from “Kung Fu Panda”’s second weekend and the release of “The Happening”.

JPMorgan forecasts a $50 million opening weekend for Hulk. If the film clears $120 million at the domestic box office, Marvel will lose $24 million, JPMorgan said, and if “The Incredible Hulk” makes $150 million, Marvel will see a $34 million profit.

The buzz for the movie has “improved markedly over the past few weeks,” said analyst Doug Creutz of Cowen & Co., who expects the film to make $55 million in its opening weekend.

“One of the factors which impressed us the most about the film at our screening was the degree to which the film ties in to other Marvel properties, such as ‘Iron Man’ and ‘Captain America,’ ” Creutz said. “Marvel is clearly building towards its planned ‘Avengers’ film in 2011.”

And they have more in store, no doubt. As Marvel points out, it has 5,000 characters in its library.

Silly “Speed Racer,” success is for “Iron Man”.

The first real movie match-up of the summer has come and gone, and the easy winner was Marvel’s superhero adaptation, which flew high in its second week. While most considered the prospect of newcomer “Speed Racer” eclipsing “Iron Man” an outside chance, few expected that the gap between the two would be so large.

“Iron Man” banked another $50.5 million in its second weekend, easily maintaining the top position and eclipsing “Horton Hears a Who” as the top-grosser of the year so far. The film’s current total is $177.1 million, and while competition should erode the man of metal in the coming weeks, studio executives at Paramount have plenty of reason to light up cigars in celebration.

Warner Bros. pricey “Speed Racer”, on the other hand, crashed and burned in second place with $20.2 million, making it a hard pill to swallow for studios.

The studio wasn’t the only one finding it hard to swallow. Critics gave the film- the shiniest ever made- terrible reviews, which bodes ominously for its future, especially when the acclaimed “Iron Man” is playing next door.

Expectations were high for the action extravaganza, which is about a young racecar driver with the career-limiting moniker Speed Racer. Some analysts expected the film would make more than 50% more than it actually did. Deutsche Bank said the results were “a disappointment for such an expensive film,” though it added that the costs were split with fellow studio Village Roadshow. “With poor tracking, we would not be surprised if it had already been partially written off,” the firm wrote. The film’s budget was estimated at $120 million, which doesn’t include the tens of millions spent on advertising.

Elsewhere, Fox’s comedy “What Happens in Vegas” pulled in a solid $20 million debut, nearly edging out the racer for the silver. But given Vegas’s substantially lower budget (about $35 million), this is one bet that Fox will be glad it placed.

The top 10 films made $115.4 million, up a healthy 24% from the $93.4 made in the equivalent week a year ago, when the emo “Spider-Man 3″ was swinging into its second weekend.

Despite the premium in this past weekend, last week’s comparison bruising has edged the year-to-date total down 0.3% from 2007. There is hope for for this to swing to a positive next weekend, however, as Walt Disney gets its game on with the highly-anticipated “Prince Caspian”. The Dow component is releasing the film in ultra-wide distribution with a huge advertising blitz, leaving no doubt that the crown-less again shall be king.

Fans of Netflix are an enthusiastic bunch. New users frequently laud the program for how logical it is in its construction. You add movies to your queue, watch them at your leisure, mail them back, and then get new ones, all for a fixed monthly fee based on the program you chose. Theoretically, if you fill up the queue to the (admittedly restrictive) 500-title limit and watch one a week, you wouldn’t have to do anything for the next nine-and-a-half years, and you’d still get titles in the mail.

Netflix patented its business plan, which it referred to as “a method for renting items to customers” by means of “computer-implemented steps.” These guidelines are pretty broad, so much so that when rival Blockbuster countered with its own DVD-by-mail service and used a similar format, it argued that Netflix’s patent shouldn’t be enforced, on the grounds that the terms were too expansive. It’s not an unreasonable argument. Are there many other forms such a service could take?

The Blockbuster dispute was settled out of court in 2007 with undisclosed terms, but some wonder whether other groups will try to hone in on the company’s model, which, in covering a way of renting “items” can hardly be limited to DVDs.

Sunil Kumar, a professor at Stanford, recently conducted a study in which he concluded that “Netflix got it right” in its program, especially in its disuse of deadlines and late fees. If it works for Netflix, he wondered, would it work for another type of business?

He speculated that an equipment rental company might benefit from such a model, as someone could rent something suitable for the opening stages of a job, trading it in later for a different tool later as the job progresses and the needs change. “It’s worth examining,” Kumar said, according to a study published on Stanford’s Graduate School of Business Knowledgebase site.

Naturally this model can’t be applied to all business types. Because people don’t return a rental car in order to get another one, Hertz or Avis wouldn’t benefit from it. And obviously restaurants can’t expect to have customers return food after “using” it.

It’s not clear whether Netflix should start preparing to receive all sorts of royalty checks from rental companies, but in a strange (perhaps) non-coincidence, the Stanford report was released the day before the company’s shares rallied to an all-time high of $40.50.

And so we’ve come to the end. The first quarter of the 2008 box office season is over, with the current year emerging as the weakened, bloody victor. Analysts at BMO Capital Markets noted that while the first quarter of 2008 finished better than the year-earlier period, it “limped to the finish line as tough comparisons in the second half of the quarter emerged.” Limped is the correct word. What was once a double-digit lead over 2007 narrowed to end a mere 2.5% higher. But still, we won! It’s all sunshine and rainbows from here on out, right?

Wrong. Sorry.

The second quarter has started off badly, with the first week off 27% from last year. The top 10 films made $76.9 million, a far cry from the $104.7 million made last year. The results narrow the full-year’s lead over 2007 to a mere 1.2%.

The top film over the weekend “21, Sony’s gambling drama, which went double-for-nothing in its second weekend, staying atop the charts with a mere $15.1 million. The film fell a respectable 37% from its debut, and has taken the house for $46.5 million thus far.

Among the weekend’s new films, Universal’s football comedy “Leatherheads” came in second with just $13.4 million. The film was backed by a strong advertising push, making the debut the most disturbing leather-related performance since Rosie O’Donnell in “Exit to Eden.” The George Clooney vehicle didn’t get much praise from critics, so expect “Leatherheads” to fumble quickly and get tackled by upcoming films soon.

The weekend’s bronze medal went to the Fox’s “Nim’s Island,” an entry into the kid adventure genre that made $13.3 million. Ironically, it was another Fox release that might have dampened the reaction to this one. We’ll just call that elephant in the room Horton, and note that he pulled in $9.1 million in his fourth weekend. The cumulative total for “Horton Hears a Who” now stands at $131 million, making it the top film of the year.

The weekend’s other wide release was Paramount’s horror film, “The Ruins,” which was aptly named in its disastrous debut, making $7.8 million in fifth place. Horror films rarely build audiences in subsequent weeks, so look for this to disappear quickly, as though it was attacked by something evil at a Mexican archaeological dig.

The results for “The Ruins” bode horrifically for next week, when Sony’s fright flick “Prom Night” will be the biggest thing opening. Smaller films also will be released in the form of Miramax’s “Smart People” and Fox’s “Street Kings.” In other words, it’s fiercely likely that this week will be the last week where 2008 will be ahead of last year, at least for a while.

Hollywood is able, at the end of most Decembers, to proclaim the previous year its most successful ever. While true, at least on the surface, it masks a long-term problem: People just aren’t going to movies much anymore.

Movie attendance levels occasionally rise from the previous year, but the general trend has been downward. The biggest movie-going year was way back in 1946, when enough tickets were sold for an astonishing 90 million people to go every week. Then television came in and stole the theater’s audience, followed by competition in the form of video games, computers and a general lessening of audience amazement. Total 2007 attendance was down 8% from the year earlier, and the current year’s box office looks unlikely to top last year.

The “most successful year ever” award is thanks to the ever-rising price of tickets, which averaged $6.88 in 2007, up 33 cents from 2006 and up more than $1 per ticket from 2002.

So it’s no surprise that film studios are struggling. Bernstein Research analysts said that most studio returns “have not meaningfully improved over the past decade” and that while revenue growth typically “has been matched or exceeded by expense growth, this hope of spending more to make more has generally not panned out.”

In a research note titled, “Isn’t It Time to Rethink the Film Studio Model?” Bernstein notes that while theater audiences are smaller, the home video market has exploded. The firm identified three potential growth opportunities:

• Blu-Ray DVDs. The firm estimates that Blu-Ray revenue will be $4.2 billion in 2011, up significantly from its 2009 estimate of $1.1 billion.
• Online distribution. While noting that the results for Apple’s online movie distribution hasn’t met expectations, Bernstein expects large growth in this area as more titles become available. Currently, only three of the top 10-selling DVDs are available online.
• Video on demand. Bernstein said that from a financial standpoint, “this represents the Holy Grail for studios,” as it provides better economics than physical rental. “In the rental market, the studio takes 30% of the retail revenue whereas in a video on demand purchase, the studio takes 70%.”

It’s almost guaranteed that studios will look to these areas to combat lagging audience rates, but don’t expect last picture show-type theater closures. Mega-theater IMAX has been gaining popularity as studios release their biggest titles on the biggest screen for the biggest possible revenue (average IMAX ticket is well above $10). If anything, expect the process of going to the movies to regain some of the “event” status it had back in the 1940s, and possibly for audience amazement levels to creep back up.

For the fourth straight weekend, the American film box office posted a negative comparable result to the previous year, with the top 10 totaling $74.7 million, down 27.5% from $103 million posted last year. The negative showing was caused by a few unexpectedly weak releases and some early 2007 films that outperformed expectations.

Though the full-year box office take is still running ahead of the same period in 2007, the gap has been narrowing. The current 2008 box office is ahead by 13.4% from last year; two weeks ago it was 14% above last year.

This weekend was marked by one of the year’s most unexpectedly low debuts. New Line’s Will Ferrell basketball comedy “Semi-Pro” came in first place with what Deutsche Bank described as a “weak” $15.3 million. To compare, Box Office Guru had forecast a $35 million debut, in line with recent Ferrell sports comedies, such as “Blades of Glory” ($33 million in its debut) and “Talladega Nights” ($47 million). With declining returns for sports comedies, does this mean that audiences will never get the chance to see a film like “Balls to the Wall: The Jai Alai Story”?

While the total of “Semi-Pro” was below expectations, the weekend’s results suffered from last year’s debut of “Wild Hogs,” whose strong $39.7 million debut made for a difficult comparison.

The weekend’s other new releases also performed poorly. Sony’s “The Other Boleyn Girl” arrived in fourth place with $8.3 million, and Summit’s “Penelope” was dead on arrival with $4 million, good enough for eighth place.

There were a few bright spots this weekend. Last week’s top film (Sony’s “Vantage Point”) held steady in second place, falling a relatively mild 43.2% to score $13 million and a $41 million cumulative total. “No Country for Old Men” returned to the top 10 after sweeping the Oscars. The best-picture winner, about a demonic murderer, rose an appropriate 66.6% week-over-week to gross $4 million in its 17^th weekend. “No Country” has made $69.6 million thus far.

Next week sees the arrival of the big-budget adventure film “10,000 B.C.,” family comedy “College Road Trip” and heist movie “The Bank Job.” Though the results could add a fifth disappointing week to the year, some are still positive about 2008. Soleil Securities said despite “some interim lumpiness from time-to-time reflecting disappointing content, we remain optimistic about the performance of the 2008 slate as a whole.”