It could almost be the script for a film. An historic Hollywood studio transforms itself from an ogre to a star, with the help of films about . . . massive transforming machines and an ogre.

Paramount Pictures, the studio that has been entertaining audiences since 1912 and that last ruled the waves when it launched Titanic on the film-going public in 1997, is back as king of the box office in America and Britain.

Thanks largely to the success of Transformers and Shrek the Third, the most obvious fruits of Paramount’s alliance with DreamWorks, the studio won a 15.9 per cent share of the US box office, achieving total gross returns of $1.48 billion (£743 million), according to Box Office Mojo, the industry research group. Outside the United States, Paramount is estimated to have earned another $1.6 billion.

The triumph at the box office – Paramount ranked only fifth in the US in 2006, with a 10.3 per cent market share – is tangible evidence of the turnaround that Brad Grey has achieved at the Viacom-owned Paramount since his appointment as chief executive in 2005.

In December that year the producer and distributor agreed to acquire DreamWorks for $1.6 billion. It also signed a distribution deal with DreamWorks Animation, a separate studio run by Jeffrey Katzenberg, the DreamWorks co-founder, which will run to 2012.

Shrek the Third has been the fourth-biggest film of 2007, grossing $796 million worldwide. Transformers has taken a further $706.3 million at the worldwide box office, making it the fifth-biggest film of 2007.

Despite industry rumours that Steven Spielberg and David Geffen, DreamWorks’ other co-founders, are unhappy at Paramount and may leave in November next year, Paramount is expecting another strong showing in 2008. Films set for release include Indiana Jones and the Kingdom of the Crystal Skull, Iron Man and Kung Fu Panda. Sweeney Todd: The Demon Barber of Fleet Street, starring Johnny Depp and released in the US on December 21, is also expected to be a big box office success.

According to Nielsen EDI, Paramount was No 1 in the UK this year with a 14.9 per cent market share, followed closely by Warner Brothers, with a 14.6 per cent slice, and Twentieth Century Fox, owned by News Corporation, parent company of The Times, with a 14.3 per cent share.

Warner Brothers was also second in the United States by market share, with 14.5 per cent, thanks in large part to the success of Harry Potter and the Order of the Phoenix.

Buena Vista, with the year’s biggest hit Pirates of the Caribbean: At World’s End, was the third-largest studio by market share in the US, with 13.6 per cent. Sony Pictures, which was behind Spider-Man 3, took fourth position, with a 13.1 per cent share.

Twentieth Century Fox’s strong showing in Britain was not repeated in America, where, despite the success of The Simpsons Movie, it finished in sixth place, with a 10.2 per cent slice of the market.

Overall takings at the box office increased in the film industry’s core US market, from $9.2 billion in 2006 to $9.31 billion in 2007, although analysts attributed that growth to price rises rather than increased ticket sales.

Stagnating ticket sales in America have forced the big studios to develop audiences elsewhere. Paramount, for example, is expanding its international business in markets such as Russia, where ticket sales are increasing significantly year-on-year.

Box Office Mojo’s figures run until December 25, so some small changes in the final week of the year are possible.

World’s biggest films in 2007

1 Pirates of the Caribbean: At World’s End Buena Vista (Disney) $961.0m

2 Harry Potter and the Order of the Phoenix Warner Bros (Time Warner) $938.5m

3 Spider-Man 3 Sony $890.9m

4 Shrek the Third Paramount/DreamWorks (Viacom) $796.0m

5 Transformers Paramount/Dreamworks (Viacom) $706.3m

6 Ratatouille Buena Vista (Disney) $615.4m

7 The Simpsons Movie 20th Century Fox (News Corp) $525.6m

8 300 Warner Bros (Time Warner) $456.1m

9 The Bourne Ultimatum Universal (NBC Universal) $441.2m

10 Live Free or Die Hard 20th Century Fox (News Corp) $382.1m

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