NY Magazine
A Proposal for Fixing Hollywood’s Box-Office Problem
By Claude Brodesser-Akner
How was your summer? Hollywood’s was terrible. During a season
movie studios count on for a little less than half their annual gross,
domestic ticket revenue dropped 8 percent in July and 10 percent in
August. Attendance is at a twenty-year low. Tent-pole films intended to
prop up balance sheets instead produced red ink; the ill-conceived Battleship
erased the profits of all other films Universal released last quarter,
while Sony and Warner Bros. are expected to see hefty losses on Total Recall and Dark Shadows.
Some of these economic wounds, true, are self-inflicted. But the movie
business has reached what ICM partner Chris Silbermann calls “an
inflection point.” Things have gone so haywire that the studios might
not be able to break the cycle of ever-costlier flops without getting
some outside relief. Funny as it sounds, Hollywood may need its own
Washington bailout — in this case not in an injection of stimulus funds
but a change to an old law that feeds many of its worst habits.
Here some history is helpful. In the golden age of the movie
business — the thirties and forties — studios owned their own theaters
and thus decided where their releases would play, forcing theaters
outside their empires to buy films without even having seen them. Then, a
Justice Department antitrust case led to the 1948 Supreme Court ruling
known as United States v. Paramount Pictures, Inc. Studios
were told they could own the tracks or the trains, but not both.
Hollywood opted for the trains. With studios no longer able to ram an
entire year’s worth of films — hits and stinkers alike — into helpless
theaters, the stakes for each production went up.
Thanks to the Paramount decree, studios now wind up sharing film
grosses more or less equally with theaters, but — and this is crucial —
the two don’t collect at the same time. Because the studios take the
bulk of the risk, they get paid first. Each company negotiates a
different split, but it’s not uncommon for a studio to get 90 percent of
the first weekend’s grosses, 80 percent of the second’s, and so on.
Eventually the split reverses, favoring the theaters in the second half
of a film’s run. The upshot is that studios have come to strongly favor
movies with built-in demand — in the form of a superhero in the lead or a
plot drawn from a hit book — and the potential to open with a bang. The
calculus has gotten Hollywood addicted to so-called “event movies” —
but making high-caliber event movies is not just expensive; it’s also
just plain hard. What’s more, as Hollywood has burned through existing
characters, it’s now moved onto franchises that have few actual fans.
“When I wanted to make Transformers, almost everyone
rejected it and said, ‘It’s a stupid toy movie!’ Then we got it made,
and it succeeded, so Hollywood thought the lesson was, ‘Let’s go make
stupid toy movies!’ ” recalls Don Murphy, a producer on the film. “But
that was not the lesson. It was not a stupid toy movie; the first Transformers
was a very good movie. It also had 150 issues of a Marvel comic. It had
170 half-hour TV shows, and a fan base that had grown up with it in the
eighties." Compare this to Battleship, a brand that has no mythology. It’s a game, like poker or tiddledywinks.
One thing Battleship — and the broader genre it represents
— does have, of course, is plenty of special effects. But to help pay
for the pricey digital and 3-D projectors that display the studios’
retina-popping CGI creations, theaters have raised average ticket prices
to record highs. Finally, the studios compound all these problems by
creating a logjam of dubious blockbusters, for which audiences are
expected to buy overpriced tickets, during the warmer months. “You can’t
just keep piling up high-profile, expensive movies on top of one
another,” grouses the vice-chairman of a major Hollywood studio (who
declined to speak for attribution, fearing the wrath of movie theaters).
“It’s not just the quality but the quantity of the pictures, too.”
During the summer of 1982, there were fewer than 50 films released. By
2002, the number was 157. This year, there were an astonishing 214
summer movies.
CBS Films co-president Terry Press is among those who see letting
studios own theaters again as a way out of the downward spiral. “I
understand the antitrust of it all,” she says. “But there would be much
more freedom to gauge how to release a movie.” The flexibility would be
not just temporal but geographic. A film like Magic Mike, for
example, underperformed in blue markets but hugely overperformed in red
ones: St. Louis and Nashville saw leaps of more than 30 percent over
typical ticket sales, while Kansas City saw a honking 75 percent
box-office bump. In New York City and Los Angeles — where advertising
and marketing costs are most expensive — Mike fell short of
averages by 30 percent and 15 percent, respectively. If Warner Bros.
controlled the big screens it was shown on, it could have adjusted for
that and devoted resources to other productions.
Privately, other movie executives insist that having the ability
to aim better will lead to fewer creative misses. Without the pressure
of having to make as much money as possible as soon as possible, more
inventive films would be able to take more time to catch on. Owning
theaters could, in this vision, have Hollywood going back to Back to the Future.
After 232 days in release, Robert Zemeckis’s 1985 classic finally
reached $200 million ($428 million in today’s dollars), marking the
slowest climb ever to that milestone. Few would argue that it wasn’t
worth the wait.
*This article originally appeared in the September 24, 2012 issue of New York Magazine.
Thompson on Hollywood, Indiewire
September 22, 2012 4:29 PM
There's no getting around the truth: business continues to be bad. Although the top ten grossed a bit above last week's mediocre numbers, by this point most year's numbers are recovering with new, stronger releases upgrading performance. But compared to a year ago, grosses are down by a disastrous one third! Last year, three films grossed $5 milliion or more on Friday. This year, none did.
The battle for #1 won't be resolved for sure until Monday, although the full weekend estimates will likely shift the top three. For their modestlevel of expense and ability to grow audiences in upcoming weeks, both "End of Watch" and "Trouble With the Curve" show promise. But positive studio balance sheets won't make theater owners happy when they see a continuation of several weeks of box office slump that shows signs of getting worse, not better.
1. House at the End of the Street (Relativity) NEW - Cinemascore: B; Metacritic score: 37
$4,640,000 in 3,083 theaters; PSA: $1,505; Cumulative: $4,640,000
For the fourth straight Friday, a horror film led all grosses. "House" however is not likely to make it four straight weekends, since the win was narrow and the two films close on its heels, with adult support, will likely gain over the next two days.
Jennifer Lawrence shot this before getting her best actress nomination for "Winter's Bone" or even "Hunger Games." Relativity paid between $2-3 million for US rights to the $10-million independent production. Marketing costs will be several times that, so any quick gross playoff and brief run would make this an marginal performer despite the decent first day.
What it means: It made sense to delay the film until after "The Hunger Games" made Lawrence a big draw. But coming out as the third horror wide release this month likely tempered interest, more so when the main attraction was the star more than any distinctive story hook.
2. End of Watch (Open Road) NEW - Cinemascore: A-; Metacritic score: 70
$4,600,000 in 2,730 theaters; PSA: $1,685; Cumulative: $4,600,000
Likely heading to #1 for the weekend, in a bleak month this film is cause for excitement. Opening wide right after its Toronto Film Festival premiere, its genre (police film) and stars (Jake Gyllenhaal and Michael Pena) didn't immediately suggest the possibility of breakout sucess. Yet this looks like it might not only win the weekend but be set up for a solid lengthy and profitable run.
This is another gold opening for Open Road, a distribution venture created by top exhibitors Regal and AMC to add product (mainly) to fringe periods in the release schedule. Open Road acquired indie-financed "End of Watch" for $2 million plus a guaranteed wide release spend (in-theater support cuts down costs).
Getting a career boost is director David Ayer, who moved from strong scripting credits ("The Fast and the Furious," "Training Day," "SWAT") to directing ("Harsh Times," "Street Kings,"). Not only is this opening above expectations (studios passed on the film before Open Road bought it), the film also scored well with critics, who raved about the performances from Jake Gyllenhaal and Michael Pena.
Since "Brokeback Mountain," other than the big budget "Prince of Persia" ($350 million worldwide), Gyllenhaal's films have grossed between $9 and $54 million in the US/Canada. But all of these cost considerably more than "End of Watch" and reinforced a sense that he had failed to establish himself as an A-lister. This could be a step towards elevating him once again.
What it means: In a period when studios are getting increasingly wary of "risky" non-horror or family-oriented lower-budget dramas, "End of Road" shows that a smart, well-reviewed film can still find a theatrical audience and make profits. And for Open Road, after some success (particularly the equally surprising "The Grey"), their appeal to producers will just get stronger.
3. Trouble With the Curve (Warner Brothers) NEW - Cinemascore: B+; Metacritic score: 58
$4,165,000 in 3,212 theaters; PSA (per screen average); $1,297; Cumulative: $4,165,000
Though this could still end up #2 or even #1 for the weekend, these are not great grosses for this Clint Eastwood/Amy Adams baseball story. Opening wider than any Clint Eastwood starring film ever, and unlike the previous two ("Gran Torino," "Million Dollar Baby"), opening wide from the start, the PSA is going to fall below at least five of them, even more significant since the most recent was four years ago, the oldest 20, meaning lower ticket prices for the earlier films.
Some caveats though: Eastwood's audience is older, not as inclined to rush out opening weekend, so if this shows strong word-of-mouth, its legs and length of run could be better than most opening films. The reviews were below most Eastwood films (this one was not directedby him), so that may have cut into the initial gross. The critic-influenced audience may have overlapped with those less inclined to go to this after his recent political brouhaha.
And, from a financial perspective, although the production cost for this has not been published, Eastwood's Malpaso is known for making economical films, far below industry average, so that even with marketing costs the domestic box office likely doesn't need to be anything near $100 million to be a success.
What it means: "Moneyball," another baseball-centered film, opened a year ago to an opening weekend of just under $20 on its way to $75 million domestic and $110 million total worldwide (the sport limiting interest in most markets). Based on these early numbers, this likely comes in less. Still, considering its star is 82 years old (has there ever been a wide release with a lead over 80?), other than the high standards of earlier Eastwood films, this is still an impressive take.
4. Finding Nemo 3D (Buena Vista) Week 2 - Last Friday: #2; Last Weekend: #2
$2,388,000 (-53%) in 2,904 theaters (unchanged); PSA: $822; Cumulative: $22,922,000
The 3-D reset of "The Lion King" not only opened much bigger than "Finding Nemo," but its second Friday only fell one-third, compared to the more than half fall for "Finding Nemo." After a strong summer of multiple animation smashes, this counts as a disappointment.
What it means: Even still, the cost of the 3-D redo was minor relative to gross, and this performance - with most of the rest of the world yet to come - will not prevent future endeavors.
5. Dredd (Lionsgate) NEW - Cinemascore: B; Metacritic score: 57
$2,230,000 in 2,506 theaters; PSA: $890; Cumulative: $2,230,000
Lionsgate, which is having a strong year once again, is said to have acquired this British/South African production with a marketing commitment north of $20 million, an investment not looking lucrative with this weak initial gross (enhanced by 3-D ticket prices). From the same comic book series that the 1990s Sylvester Stallone "Judge Dredd" came from (that grossed an OK for its time $34 million for Disney), this was a test of star Karl Urban's ability to carry a potential action franchise after establishing himself as a memorable physical force in films like "Star Trek," "The Bourne Supremacy" and "Red" as well as leading roles in films like "Doom" and "Priest." These grosses won't help his cause.
For British director Pete Travis, who came out of the festival circuit with "Omagh" to make "Vantage Point" and then the barely released "Endgame," this also won't be the breakout success he likely wanted. (It also played at the recent Toronto Film Festival, in the Midnight section).
What it means: This has opened in the UK, to (relative to population) somewhat better results. For the producers (not Lionsgate, whose participation is limited to US/Canada) this could bear more fruit around the rest of the world.
6. Resident Evil: Retribution (Sony) Week 2 - Last Friday: #1; Last Weekend: #1
$1,950,000 (-76%) in 3,016 in theaters (+4); PSA: $647 Cumulative: $28,718,000
This is one of the biggest second Friday falloffs for a #1 film in recent months, both in terms of PSA drop and position, but still about the same as 2010's "Resident Evil: Afterlife," so it doesn't come as a surprise.
What it means: This has earned most of its domestic gross already. The foreign first week already had brought in $50 million though, so more from the franchise is likely.
7. The Master (Weinstein) Week 2 - Last Friday: #19; Last Weekend: #19
$1,386,000 (+571%) in 788 in theaters (+783); PSA: $1,759; Cumulative: $2,442,000
After its record setting NY/LA platform openings last week, and with reviews in new cities at the year's best level already established, Weinstein quickly turned this into a much wider film with multiple theaters in a wide range of cities nationwide.
The Friday result - keeping in mind that the audience likely increases more than most new films because of the adult appeal - is not at the same level of success as the extraordinary exclusives last week. The gross is the same as when "Moonrise Kingdom" first reached this level of playoff (about 65 more theaters, so the PSA is a bit better here). But that came in its sixth week of release, when many of the theaters had already been playing for a week or longer, so it isn't the ideal comparison. Director Paul Thomas Anderson's "There Will Be Blood" at 885 theaters (its fifth week, boosted by multiple Oscar nominations) grossed $4.9 million for three days, again expanding after having already been somewhat wide.
Though the reviews have been at the highest levels, some indications of a more love it/don't love it quite so much divide came in the weekday figures in NY/LA. From a $103,000 Monday, this fell steadily to $62,000 total in its five initial theaters. With a much wider release, though still drawing a sophisticated audience, this less striking performance isn't unexpected.
What it means: This may still expand further, but at this point it looks like it may struggle to reach, at least on its initial run, the levels of "Moonrise Kingdom" or "The Best Exotic Marigold Hotel," the two best limited releases this year.
8. The Possession (Lionsgate) Week 4 - Last Friday: #3; Last Weekend: #3
$815,000 (-56%) in 2,598 theaters (-262); PSA: $314; Cumulative: $43,465,000
Lionsgate likely didn't expect this to be a top 10 film in its fourth week.
What it means: This is all gravy by this point.
9. The Lawless (Weinstein) Week 4 - Last Friday: #4; Last Weekend: #4
$704,000 (-48) in 2,614 theaters (-449); PSA: $269; Cumulative: $32,895,000
Still hanging in there, this Weinstein acquistion continues to hold on better than initially expected.
What it means: It's going to end up close to $40 million, quite good for an early September opening.
10. The Bourne Legacy (Universal) Week 7 - Last Friday: #7; Last Weekend: #8
$479,000 (-44%) in 1,431 theaters (-739); PSA: $335; Cumulative: $109,272,000
The steady performance continues, as what once looked like a problem hitting $100 million in US/Canada now is a good deal beyond near the end of its run.
What it means: With $90 million additional in already and several major countries still to open, this series entry will be the first to do better overseas than at home, which helps chances that it there could be at least one more sequel.
Thompson on Hollywood, Indiewire
Friday Box Office Top Ten: Trouble With the Grosses, Lawrence Leads Weak Field
bySeptember 22, 2012 4:29 PM
There's no getting around the truth: business continues to be bad. Although the top ten grossed a bit above last week's mediocre numbers, by this point most year's numbers are recovering with new, stronger releases upgrading performance. But compared to a year ago, grosses are down by a disastrous one third! Last year, three films grossed $5 milliion or more on Friday. This year, none did.
The battle for #1 won't be resolved for sure until Monday, although the full weekend estimates will likely shift the top three. For their modestlevel of expense and ability to grow audiences in upcoming weeks, both "End of Watch" and "Trouble With the Curve" show promise. But positive studio balance sheets won't make theater owners happy when they see a continuation of several weeks of box office slump that shows signs of getting worse, not better.
1. House at the End of the Street (Relativity) NEW - Cinemascore: B; Metacritic score: 37
$4,640,000 in 3,083 theaters; PSA: $1,505; Cumulative: $4,640,000
For the fourth straight Friday, a horror film led all grosses. "House" however is not likely to make it four straight weekends, since the win was narrow and the two films close on its heels, with adult support, will likely gain over the next two days.
Jennifer Lawrence shot this before getting her best actress nomination for "Winter's Bone" or even "Hunger Games." Relativity paid between $2-3 million for US rights to the $10-million independent production. Marketing costs will be several times that, so any quick gross playoff and brief run would make this an marginal performer despite the decent first day.
What it means: It made sense to delay the film until after "The Hunger Games" made Lawrence a big draw. But coming out as the third horror wide release this month likely tempered interest, more so when the main attraction was the star more than any distinctive story hook.
2. End of Watch (Open Road) NEW - Cinemascore: A-; Metacritic score: 70
$4,600,000 in 2,730 theaters; PSA: $1,685; Cumulative: $4,600,000
Likely heading to #1 for the weekend, in a bleak month this film is cause for excitement. Opening wide right after its Toronto Film Festival premiere, its genre (police film) and stars (Jake Gyllenhaal and Michael Pena) didn't immediately suggest the possibility of breakout sucess. Yet this looks like it might not only win the weekend but be set up for a solid lengthy and profitable run.
This is another gold opening for Open Road, a distribution venture created by top exhibitors Regal and AMC to add product (mainly) to fringe periods in the release schedule. Open Road acquired indie-financed "End of Watch" for $2 million plus a guaranteed wide release spend (in-theater support cuts down costs).
Getting a career boost is director David Ayer, who moved from strong scripting credits ("The Fast and the Furious," "Training Day," "SWAT") to directing ("Harsh Times," "Street Kings,"). Not only is this opening above expectations (studios passed on the film before Open Road bought it), the film also scored well with critics, who raved about the performances from Jake Gyllenhaal and Michael Pena.
Since "Brokeback Mountain," other than the big budget "Prince of Persia" ($350 million worldwide), Gyllenhaal's films have grossed between $9 and $54 million in the US/Canada. But all of these cost considerably more than "End of Watch" and reinforced a sense that he had failed to establish himself as an A-lister. This could be a step towards elevating him once again.
What it means: In a period when studios are getting increasingly wary of "risky" non-horror or family-oriented lower-budget dramas, "End of Road" shows that a smart, well-reviewed film can still find a theatrical audience and make profits. And for Open Road, after some success (particularly the equally surprising "The Grey"), their appeal to producers will just get stronger.
3. Trouble With the Curve (Warner Brothers) NEW - Cinemascore: B+; Metacritic score: 58
$4,165,000 in 3,212 theaters; PSA (per screen average); $1,297; Cumulative: $4,165,000
Though this could still end up #2 or even #1 for the weekend, these are not great grosses for this Clint Eastwood/Amy Adams baseball story. Opening wider than any Clint Eastwood starring film ever, and unlike the previous two ("Gran Torino," "Million Dollar Baby"), opening wide from the start, the PSA is going to fall below at least five of them, even more significant since the most recent was four years ago, the oldest 20, meaning lower ticket prices for the earlier films.
Some caveats though: Eastwood's audience is older, not as inclined to rush out opening weekend, so if this shows strong word-of-mouth, its legs and length of run could be better than most opening films. The reviews were below most Eastwood films (this one was not directedby him), so that may have cut into the initial gross. The critic-influenced audience may have overlapped with those less inclined to go to this after his recent political brouhaha.
And, from a financial perspective, although the production cost for this has not been published, Eastwood's Malpaso is known for making economical films, far below industry average, so that even with marketing costs the domestic box office likely doesn't need to be anything near $100 million to be a success.
What it means: "Moneyball," another baseball-centered film, opened a year ago to an opening weekend of just under $20 on its way to $75 million domestic and $110 million total worldwide (the sport limiting interest in most markets). Based on these early numbers, this likely comes in less. Still, considering its star is 82 years old (has there ever been a wide release with a lead over 80?), other than the high standards of earlier Eastwood films, this is still an impressive take.
4. Finding Nemo 3D (Buena Vista) Week 2 - Last Friday: #2; Last Weekend: #2
$2,388,000 (-53%) in 2,904 theaters (unchanged); PSA: $822; Cumulative: $22,922,000
The 3-D reset of "The Lion King" not only opened much bigger than "Finding Nemo," but its second Friday only fell one-third, compared to the more than half fall for "Finding Nemo." After a strong summer of multiple animation smashes, this counts as a disappointment.
What it means: Even still, the cost of the 3-D redo was minor relative to gross, and this performance - with most of the rest of the world yet to come - will not prevent future endeavors.
5. Dredd (Lionsgate) NEW - Cinemascore: B; Metacritic score: 57
$2,230,000 in 2,506 theaters; PSA: $890; Cumulative: $2,230,000
Lionsgate, which is having a strong year once again, is said to have acquired this British/South African production with a marketing commitment north of $20 million, an investment not looking lucrative with this weak initial gross (enhanced by 3-D ticket prices). From the same comic book series that the 1990s Sylvester Stallone "Judge Dredd" came from (that grossed an OK for its time $34 million for Disney), this was a test of star Karl Urban's ability to carry a potential action franchise after establishing himself as a memorable physical force in films like "Star Trek," "The Bourne Supremacy" and "Red" as well as leading roles in films like "Doom" and "Priest." These grosses won't help his cause.
For British director Pete Travis, who came out of the festival circuit with "Omagh" to make "Vantage Point" and then the barely released "Endgame," this also won't be the breakout success he likely wanted. (It also played at the recent Toronto Film Festival, in the Midnight section).
What it means: This has opened in the UK, to (relative to population) somewhat better results. For the producers (not Lionsgate, whose participation is limited to US/Canada) this could bear more fruit around the rest of the world.
6. Resident Evil: Retribution (Sony) Week 2 - Last Friday: #1; Last Weekend: #1
$1,950,000 (-76%) in 3,016 in theaters (+4); PSA: $647 Cumulative: $28,718,000
This is one of the biggest second Friday falloffs for a #1 film in recent months, both in terms of PSA drop and position, but still about the same as 2010's "Resident Evil: Afterlife," so it doesn't come as a surprise.
What it means: This has earned most of its domestic gross already. The foreign first week already had brought in $50 million though, so more from the franchise is likely.
7. The Master (Weinstein) Week 2 - Last Friday: #19; Last Weekend: #19
$1,386,000 (+571%) in 788 in theaters (+783); PSA: $1,759; Cumulative: $2,442,000
After its record setting NY/LA platform openings last week, and with reviews in new cities at the year's best level already established, Weinstein quickly turned this into a much wider film with multiple theaters in a wide range of cities nationwide.
The Friday result - keeping in mind that the audience likely increases more than most new films because of the adult appeal - is not at the same level of success as the extraordinary exclusives last week. The gross is the same as when "Moonrise Kingdom" first reached this level of playoff (about 65 more theaters, so the PSA is a bit better here). But that came in its sixth week of release, when many of the theaters had already been playing for a week or longer, so it isn't the ideal comparison. Director Paul Thomas Anderson's "There Will Be Blood" at 885 theaters (its fifth week, boosted by multiple Oscar nominations) grossed $4.9 million for three days, again expanding after having already been somewhat wide.
Though the reviews have been at the highest levels, some indications of a more love it/don't love it quite so much divide came in the weekday figures in NY/LA. From a $103,000 Monday, this fell steadily to $62,000 total in its five initial theaters. With a much wider release, though still drawing a sophisticated audience, this less striking performance isn't unexpected.
What it means: This may still expand further, but at this point it looks like it may struggle to reach, at least on its initial run, the levels of "Moonrise Kingdom" or "The Best Exotic Marigold Hotel," the two best limited releases this year.
8. The Possession (Lionsgate) Week 4 - Last Friday: #3; Last Weekend: #3
$815,000 (-56%) in 2,598 theaters (-262); PSA: $314; Cumulative: $43,465,000
Lionsgate likely didn't expect this to be a top 10 film in its fourth week.
What it means: This is all gravy by this point.
9. The Lawless (Weinstein) Week 4 - Last Friday: #4; Last Weekend: #4
$704,000 (-48) in 2,614 theaters (-449); PSA: $269; Cumulative: $32,895,000
Still hanging in there, this Weinstein acquistion continues to hold on better than initially expected.
What it means: It's going to end up close to $40 million, quite good for an early September opening.
10. The Bourne Legacy (Universal) Week 7 - Last Friday: #7; Last Weekend: #8
$479,000 (-44%) in 1,431 theaters (-739); PSA: $335; Cumulative: $109,272,000
The steady performance continues, as what once looked like a problem hitting $100 million in US/Canada now is a good deal beyond near the end of its run.
What it means: With $90 million additional in already and several major countries still to open, this series entry will be the first to do better overseas than at home, which helps chances that it there could be at least one more sequel.
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