HOLLYWOOD GETS MIXED REVIEWS : RECORD ATTENDANCE OFFSET BY RISING COSTS.

Byline: Dave McNary Daily News Staff Writer

Jack Valenti, the movie industry's top cheerleader, offered attendees at its major trade show a mixed outlook Tuesday of booming attendance and soaring costs.

``This past year retrieved and confirmed my long-held belief that moviegoing will never fade away,'' said Valenti during the keynote address of the ShoWest Convention, which opened here Tuesday at Bally's.

Valenti, president and chief executive officer of the Motion Picture Association of America, released final official results for 1996 showing domestic revenues up 7.6 percent to $5.91 billion and admissions up 6 percent to 1.34 billion, the highest since 1959.

This year's box office is running 12 percent ahead of last year's and is on pace to reach $7 billion.

On the down side, Valenti said production costs continued to jump last year, rising 9.5 percent to $39.8 million per picture. Additionally, marketing costs soared 26 percent to $19.8 million per film and have now nearly doubled in five years.

Marketing is the major focus at the convention, now in its 23rd year, with about 5,000 industry participants. The four-day exhibition gives major studios the opportunity to romance theater owners by putting on elaborate shows featuring stars and upcoming attractions.

On Tuesday, 20th Century Fox showcased ``Anastasia,'' seen as a serious challenge to Disney's dominance in the animation field. Meanwhile, Sony previewed its lineup for the rest of the year with live appearances by Harrison Ford, Julia Roberts, Anthony Hopkins and Will Smith.

But what impressed attendees the most was Sony's early glimpse at ``Godzilla,'' due out in May 1998.

Amid the lavish presentations, several studio executives said costs need to be brought under control, a refrain that has been spoken but ignored by Hollywood for years. MGM became the latest proponent, pledging to release fewer films and focus on quality projects instead.

``The upward trend in costs is incredibly disturbing,'' said Gerry Rich, MGM's president of marketing. He said, for example, the studio will face ``staggering'' costs in trying to distinguish the 18th James Bond movie, due out this winter.

Robert Harper, Rich's counterpart at Fox, said at a panel discussion that much of the industry's gain in revenues has come from an increase in new theaters rather than significant gains in moviegoer interest.

``We are fighting each other but we're not really gaining in the overall market,'' he said.

Exhibitors are expected to add 1,500 new screens this year and another 1,000 or more screens in 1998, pushing the total number in the United States over 30,000. Many of the new locations are the so-called megaplexes with 15 to 30 auditoriums apiece.

The convention sponsor, the National Association of Theater Owners, announced Tuesday that ticket prices edged up just 6 cents last year to an average of $4.41. William Kartozian, president of the trade group, said theater owners may actually not be charging patrons enough to meet costs.

``We have nothing about which to be defensive when it comes to prices,'' he said.

Kartozian also said there has been overbuilding of new complexes in some markets, citing the city of Ontario specifically. AMC opened a 30-screen complex in the San Gabriel Valley town in December and Edwards Cinemas will open a 22-screen complex later this month.

``My commandment to the industry is, `Thou shalt not Ontario one another,' '' he said.

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Chart: MOVIE MARKETING COSTS SKYROCKET