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Weekend Estimates by Ex Kladina

Sunday, April 19th, 2015

Weekend Estimates 2015-04-19 at 9.01.20 AM

An interesting weekend for a change.

Even the Furious 7 is interesting at this point. A mature franchise leaping somewhere around 60% in gross.

Or maybe it’s a little more obvious than that. The racial thing is not new. Paul Walker, however good a human being, was not a big worldwide box office star. But they have been selling this as “the last ride.” And Walker certainly had fans in the context of this franchise. Let’s assume that these factors could tweak the significant incremental growth of the franchise from 4 to 5 to 6 to, now, 7. The last 3 films had each grown in box office at a rate of somewhere between $125 million and $175 million worldwide.

And then there is a panda in the china shop… China. From what I can tell, Fast & Furious 6 was the first film to get a theatrical release there, in 2013. About $70 million. This one, their second? $250 million and counting. International growth outside of China? A bit over $50 million (to date)… or right in line with the previous growth of the franchise.

I am not a big fan of box office asterisks. Don’t like counting tickets (especially because the historic counting available to us is impossibly flawed)… don’t like adjusting for inflation. There is no logical comparison between box office in the 30s, 40s, or 50s, and box office now… forget about all the other availability like DVD and streaming and distractions, just on the basis of TV, the mass audience lives with movies in a very different way. The industry adjusted to this, but ticket counters don’t seem to get it. The past should be honored, but it is not an easy comparison.

But my point is, Chinese box office demands asterisks. On the most surface level, it is 3D in reverse… but it bends the box office conversation even more than 3D because all of the revenue is the same, much small “rentals” than anywhere else. Studios receive less than half of the box office take compared to anywhere else in the world. So, effectively, the grosses from China are worth (less than) half of what any other reported grosses are worth to the distributors. It is still a massive, growing, absolutely critical market for Hollywood. But there are now 20 billion-dollar-plus films and Furious 7 is just the 5th one of them to have gotten over $100 million added to their box office by China. And the onslaught is coming…

Another film that is about to move from the marginal China revenue category to maga-bucks is Avengers: Age of Ultron. The first Avengers, the first non-Jim Cameron film in history to pass $1.35 billion at the box office, only took in about $86 million from China… not nothing, but not a critical amount in defining its success. The cast is currently in China, promoting the sequel, and I can’t imagine that it won’t lead to at least $300 million at the Chinese box office next month. This could push the film close to the $2 billion mark, heretofore only cracked by Titanic (in 2 releases, including $45m from China in it’s digital re-release) and Avatar ($204m from China… the first Hollywood mega-gross in the country, in 2010).

Does it matter? As I noted at this beginning of this rant, I am not a big believer in asterisking every bump in the box office road. But unlike, say, 3D, access to the Chinese audience is not open territory. Not everyone can play. And if the grosses from China are 27% of a film’s title worldwide gross, meaning that the distributor will receive around 15% less from their worldwide gross, that is pretty significant (this is the story with the last Transformers movie).

And in 20 years, this will probably look like just another bump in the road. China will show more Hollywood films. More revenue will be returned to distributors. We’ll start seeing annual grosses over $500 million from China. It’s all gonna happen. Fair enough.

And there are plenty of surprises in this growth. You might assume that a mega-hit like Frozen made a killing in China. But no. Only about $50 million. It did 5x that in the mature market of Japan. The 10 Hollywood films that have done over $100 million in China, to date, are Furious 7, Avatar, Iron Man 3, Pacific Rim, Interstellar, Dawn of the Planet of the Apes, Captain America: The Winter Soldier, X-Men: Days of Future Past, and the last two Transformers movies. That’s it. These are early days. And unless we can get a handle on piracy, it may be the last big market to go into play.

But for now, we should all have an asterisk in our heads when chewing on these numbers. But more importantly, we should be conscious of the “magic trick” that seems to be happening in front of our eyes. And as grown ups, we also have to be able to balance the questions about domestic box office – which has been shrinking marginally on an annual basis for decades now – and international grosses, which represent 95% of the population of the earth.

But I digress…

Paul Blart: Mall Cop 2 had a good opening, which only looks weak when compared to the release of the original, a surprise hit. But after 6 years, Blart ain’t exactly Star Wars coming back. Sony should be thrilled that it’s only off 23% so far.

Unfriended is yet another Jason Blum film… low budget, decent box office = profit. If you want to examine how power works in Hollywood, follow the Jason Blum. He is the kind of asset that can make a career in this town. A money tree. For now. (This trend will eventually pass and Blum has shown a broader interest than just horror/thrillers, including Whiplash, but that will be his 2nd act.)

I am glad that Disneynature exists. But Monkey Kingdom is one of those films that makes one worry that it all may get shut down before long. Really, Disney can lose small amounts of money on the films and keep it going just in brand support of its animal theme park interests. And you never know when one will shock everyone and hit big. Anyway… soft opening… not a disaster.

True Story isn’t a pretty launch. But it’s not a pretty movie. Life will go on for Searchlight.

And Child 44 was thrown out into the world by Lionsgate like an unwanted child. Audiences responded in kind.

But back to the happy stories… Ex Machina expands from 4 to 39 screens and scores a $20,620 per screen average. That’s really good. It doesn’t guarantee a huge gross, but it suggests that this could be A24′s biggest film. They are approaching it with a lot of caution, for better or worse. But the buzz is clearly growing. If you look at the other indie genre hit on 2015, It Follows, the 2nd weekend expansions are of a similar size (39 vs 32), but Ex delivered about double the per-screen, even with the higher number of screens. It Follows is at $13.2 million and A24′s high grosser so far is Spring Breakers with $14.2 million. So that seems doable.

Looking for a higher end comparison for Ex Machina, I looked at Birdman, which had slightly better numbers in expansion ($27.6k per on 50). Then there is Chef, which never had these numbers, but played well for a long time. Both of these films had the advantage of adult audiences. This is the dichotomy, as Ex Machina should do sensational business with genre fans, but is a smart film that could also play to grown-ups who usually eschew genre. A24, which is also having some success with the dramedy While We’re Young, is very into smart tweeners. If they can continue to build on their commercial success, they could become the next great light, leading the way in the indie world.

Also having a nice weekend is the Dior & I team, which is running a little behind Valentino: The Last Emperor, but is looking like it will be a million dollar doc, which is a not-insignificant challenge these days.

Also doing a strong per-screen number, albeit only on 1 screen, is Felix and Meira from Oscilloscope.

The glorious Clouds of Sils Maria, which seems to be more divisive for audiences than it has been for critics, did an okay $5260 per-screen on 31. This is one of those cases in which IFC eschewed day-n-date VOD and isn’t seeing it pay off in a significant way.

Friday Estimates by Klady Blarted

Saturday, April 18th, 2015

Friday Estimates  2015-04-18 at 8.42.17 AM

Oopserman vs Broodman Trailer

Saturday, April 18th, 2015

BYOB: April The 16th Be With You

Thursday, April 16th, 2015

Delivelution: April 2015 – Pt 2, Meet The New Bundle. Same As The Old Bundle

Tuesday, April 14th, 2015

Gosh darn, the media luvs change. Any kind of change (aside from losing their particular jobs). Gotta have it. Reporting “nothing has changed” or ” there has been incremental change” isn’t very exciting.

Almost four-and-a-half years ago, ESPN started streaming its networks live. For an even longer time, the sports programming leader has made programming that didn’t make it onto the networks available for streaming and PPV.

Another Disney television network, ABC, has been streaming their programming for almost two full years.

So why don’t these leaders in emerging media technology seem to ever get mentioned in stories about the future? Because they aren’t cord-cutting tools.

Now, as ESPN streams on Dish’s extremely limited streaming Sling TV network, suddenly they are a part of the conversation again… but only as a part of the cord cut.

Let’s process this… Disney makes their ABC broadcast network available to stream to scores of millions as a free part of their cable/satellite (MVPD) subscriptions and… not a story. But Viacom’s CBS makes their network available to a couple hundred thousand (maybe) cordcutters for $6 a month and BOOM… the world is changing.

If you want to follow a niche group that likes to pose and whine constantly, feel free. But that never ends up being the story.

One journalistic axiom that I live by is “follow the money.” And the story here is about what will happen when 80 million+ households are ready to take action.

There is no cliché more worn out that “everyone wants what they want when they want it and they want it for free.” Yet this is how the evolution of content distribution is constantly covered. Make no mistake, there is an evolution going on. The vast number of ways that content will soon be distributed constitutes an immense change.

But here is what has not changed, and won’t change. 60 seconds in a minute, 60 minutes in an hour, 24 hours in a day, 168 hours in a week. The vast majority of people will spend 35-56 hours of every week sleeping. That same majority will spend between 20-60 hours productively working (inc school, etc) during most weeks. So what does that leave? 20-60 hours a week entertaining ourselves in some form? Food, sex, bathing, thinking… all eat into that.

And the value of money will change, but people will basically make similar amounts now and 50 years from now. And no matter how excited the press gets about change, until filmed entertainment can fully replace food and/or drugs and/or alcohol and/or sex and/or sleep, the average American household will not be spending a lot more, by percentage, on these things than we do now. $250 – $350 a month is about the cap.Of course, on the high side, that adds up to over $400 billion a year. The question is, how does it get cut up?

Now… let’s discuss the bundle.

As soon as you put a second piece of entertainment together with another to increase value, you have a bundle. Netflix and Amazon and Hulu are all bundlers. They bundle content with the idea of appealing to the widest possible group, few of whose tastes will match consistently through their viewing. Meaning… if one-third of the Netflix subscribers watch a show like “House of Cards, “that’s a huge win for Netflix, as they have created unique value for one-third of their buyers. Maybe another one-sixth subscribe for old TV shows. Another one-sixth like the range of docs available. Maybe one-third can’t live without the kids’ programming. Etc, etc, etc.

This is also the kind of bundler that the major networks are, except that their targets are even wider. They get paid based on how much everything they air gets watched, not by subscriber purchase and loyalty. Also, they have historically lived with the limits of the 168-hour week or more to the point, 22 weekly hours of primetime and a wide variety of daytime and latenight chunks. So, for instance, today (Monday) on ABC, the network will program, on most affiliates, 16.5 hours of the 24 hour day. On this upcoming Sunday, they have 12 hours of programming. Fox, on the other hand, will only program two hours of the 24 hour day of its affiliates today (Monday).

MVPDs (cable/satellite) are a third form of bundling, pulling together an attractive series of networks to reach an audience even wider than the broadcast networks. These companies were tasked, at the start, with serving the communities to which they were given exclusive rights on a town by town basis. Local stations were included under “must-carry” rules. Networks like TNT and USA used major league sports to make them semi-unofficially must-carry (as in, you need to have them so your constituents can see their local teams when they are televised nationally).

Bu things changed dramatically as (and there are lots of pieces, but sticking to my point here) the MVPD world solidified and what were specialized networks realized that they could compete with the more mainstream cable networks and even the broadcast networks. Cable nets like MTV and Bravo and AMC and History realized that they had 70 million-plus (many of them around 100 million) potential viewers to work with, same as the major broadcasters had sole access to for years. Why program only niche shows hoping to find hundreds of thousands out of an interest group of a few million when they could shoot for millions of viewers.

And as those higher pursuits expanded (along with the costs), those networks grew more important for those MVPDs to keep their subscribers and the shoe changed feet. Now the networks had an advantage (as did ESPN and other older nets). But there were the broadcast networks, who still draw more viewers overall than any other segment of the MVPD content universe, spending lavishly and creating hundreds and thousands of hours of new programming annually and not getting paid by the MVPDs. And so, that shifted and now they are – for the most part – being paid to be available via your cable or satellite provider.

In other words, your cable company started paying a la carte prices to hold together your bundles, all the while listening to you, the consumer, complain about 500 channels with nothing on.

Is this the only reason your cable/satellite bill has been steadily/sneakily rising over recent years? No. But it is a big part of the cause.

So now we get to cutting the cord.

If you just say, “Man, I don’t need all of that!,” God bless you and opt out of this conversation now. You are part of a very small group of people who are just fine making that leap. Congratulations.

As for the rest of you… your decision is really about choice. There is expense. And there is easy, wide-open access. And there is the vast space in between.

Here is what is not going to happen… you are not going to get to pick the channels you like and only those you like and shave 50 cents or a buck off of your bill for each one you eliminate.

On my DirecTV, the first 70 channels are committed to local “free” TV. 70 – 100 are all shopping channels. 101-200 are all DirecTV PPV or other in-house programming. 201 – 221 are news and sports channels (some very specific, like The Golf Channel). More shopping from 222 – 230. 231 – 288 is the meat of the cable programming… Food Network, Bravo, AMC, E!, History, Discovery, FX, A&E, Comedy Central, Lifetime, Oxygen, WE, Oprah, USA, TNT, TBS, etc. Kids programming 289-304. A bit of a mash-up until MTV at 331 which starts music and hip entertainment until 345. News channels from 346 – 360. Religion 363 – 379. Unavailable national nets from 380 – 400. Spanish-language nets from 401 – 462. DirecTV space until HBO and the premiums nets at 501, which go until 573, which is when the porn starts. The 600s are for local sports networks. The 700s are for paid access to sports. 800s are music channels. Everything 1000 – 2000 is now on-demand channels. And over that, it’s DirecTV inside baseball.

So what do I use? Not the 70 channels of free TV… but the ones I want and the others are free to me and DirecTV anyway. 201- 221 are sports channels I watch. 231-288 are core. The news channels are important to me (346-360). With a kid in the house, the Kids nets are important (289 – 304), even though he also uses Netflix all the time. I don’t watch much MTV (331-345), but it would be weird not to have it available. And the premium channels, which I am already paying for at great cost.

So… with a roughly 500 channel “basic” universe on DirecTV, I care about roughly 120 channels. Within that I could surely pare it down to under 100 channels… maybe 75. But as I wrote before… it doesn’t work like that and will never work like that.

Still, even with a priority of 75 channels (before premium nets), there is no way to achieve that bundle solely by streaming.

Rumor has it that the Apple offering will be around 50 channels… but what 50 channels?

And each of us (who do care about having a fairly broad level of access) will have to ask ourselves, what is our tipping point?

What level of inconvenience is $50 a month worth? $25 a month? $75 a month?

And this is where is becomes a giant cluster f***, because as we seek to break the bundle, we each become responsible for creating our own bundles. And that includes making sure your internet access through your home works well enough for streaming consistently and with minimal interruption.

I’m not playing the “what’s available right this second” game here. I’m taking the Playstation Vue (now in 3 cities) and the reporting on Apple to be mostly accurate. (Sling TV, as far as I am concerned, is already dead. 20 stations, no broadcast… not going to cut it. In time, it will get the networks. It will have to in order to have any chance. But it may well be too late.)

Playstation Vue is offering up to 88 channels. But the offering changes in each of the 3 cities in which Vue is currently available… and again based on the three levels of service. In all 3 cities, the cheapest level, “Access,” is $49.99 a month. In NYC, you get 53 channels at this level. For news, there is CNN, HLN, Fox News, Fox Business, CNBC, and MSNBC. For sports, there is Fox Sports 1, Fox Sports 2, NBC Sports Net, and networks that show some pro sports, TBS, TNT, CBS, NBC, and Fox. No ESPN (on this or any level). And no ABC (on this or any level). To get YES (to watch The Yankees), you have to go to the “Core” level, which makes it $59.99 a month. For kids, Nickolodeon, Nick Jr, and Nick Toons. No Disney (on this or any level).

And what about the “meat” channels I referred to earlier? Not bad. AMC, Bravo, E!, Food Network, MTV, VH-1, TBS, TNT, TCM, TLC, USA… all there. But A&E, BBC America, History, Lifetime… sorry. And logically, if those channels were to sign on, it would be another tier of $10 a month for their inclusion.

The $69.99 “Elite” level is a load of 21 unnecessary channels. If you feel strongly about having Logo (the most surprising channel to be held Elite hostage, because it seems like a political misstep) or Boomerang or The Cooking Channel, so be it. But you pretty much get it all for $59.99… but with some big holes. Add HBO Now and you’re up to $75 a month. Add Netflix, Hulu and Amazon Prime and you’re just over $100 a month. Without a DVR. With limited video-on-demand over a tightly limited period. Without a number of significant networks, including premium nets Showtime and Encore. Currently, PS Vue doesn’t stream to the iPad or iPhone, but they say that will soon change, so I won’t hold it against the service… and I will hold it against DirecTV and other MVPDs that don’t allow much live streaming of their top networks outside of the home.

But… it’s just another bundle. And even at the “Core” level, did you really ask for the Cosi Channel, Destination America, the Big 10 Network, Esquire Network, Animal Planet, Science, Discovery Family, TeleXito, etc? I’m sure some of you wanted one or two of them, but these are the networks that are noted as “unneeded” when people complain about MVPD bundles.

If I could get this for my wife’s parents, in their 70s, who rarely change the channel from Fox News, and wouldn’t worry about not having ABC or ESPN, my inclination would be to say, “sold.” Of course, they would need internet service, which they might choose not to have. They still pay all of their bills by mail.

Unfortunately, checking in with Time-Warner Cable in my neighborhood, they could have 200 channels (100 in HD) on 3 TVs with DVRs and the internet for $129 a month. Or they could pick 20 channels on 3 TVs with DVRs and the internet for $80 a month.

Now the value proposition is razor thin, at best.

The irony of all of this is that the people most anxious to cut those chords and lead the revolution are younger… and The Young are the group most focused on event moments, whether the newest TV episode or movie. Older people tend not to be as must-see focused. They are willing to wait to consume their entertainment. They don’t feel compelled to jump on Facebook or Twitter to discuss something minutes after it ended. But those younger people are happily throwing up release date hurdles for themselves and the older audiences are less willing to go through all that effort (or multiple delivery systems).

But returning to the central point of this episode… “bundle hatred” is a false premise used lazily to express the disaffection for the current, overly mature system of local near-monopolies that have lowered the bar on the need for MVPDs to aggressively service their customers in a positive way.

Many consumers (perhaps a majority) feel like their content delivery systems are too expensive and not worth the price these days. They see a load of channels in their cable/satellite guides that they never watch. And they figure that if you just trim the fat, prices will go down. They also want maximum access to content on digital platforms.

I believe that consumers will end up winning this battle, as they mostly have so far. But it will not be the revolution of which many dream. If you want to reduce down to local TV by digital antenna and the 4 big streamers (Netflix/HBO/Hulu-Plus/Amazon Prime), you are good to go for under $100 a month (including internet) for as long as the broadcasters are putting signals in the air.

But if you want to consume with some abandon, $150 – $200 a month is likely to remain the norm for a long time to come. What I see coming in a lot more content for the same overall price point. Some networks will die. MVPDs will be a part of the machinery, but will earn a lot less revenue from content sales than they have, focusing more heavily on providing internet services (as many have suggested before me).

The need to have multiple networks, like six HBOs, will dissipate. NBCUniversal has 15 of the 88 Playstation Vue channels (and a similar or bigger clock on MVPDs) currently. Occupying channel space has been a leading strategy for 20+ years, but having – for instance – both Cloo and Chiller in a digital on-demand universe seems redundant moving forward.

So maybe the bundle will only have 20 “channels,” each channel priced at various levels. But there will still likely be basic and premiums levels that cross all those channels. The difference from now is, you will be able to watch what you want wherever you want to, the DVR will be phased out with access to download any post-release filmed entertainment (and perhaps be broken into multiple windows, but not ones as seemingly arbitrary as right now), going to movies will be about that very specific experience which could well be as popular if not more popular than now, and television will fight for a few million viewers from across the globe on the nights of premieres and far more in the 2 – 3 weeks to come.

But I am getting ahead of myself. More to come…

Part 1: Unscrambling Eggs
Part 3: The Tyranny Of The Old
Part 4: $200 Billion Is Never Enough

Weekend Estimates by Furiouser

Sunday, April 12th, 2015

Weekend Est 2 2015-04-12 at 10.17.32 AM

Not a very eventful weekend. The Avengers 2 junket got more media attention than any of the films in release.

But a solid hold for Furious 7. The film’s domestic lead over its predecessors in the franchise continues to expand week by week, which is impressive. Just tree weekends in, this is already the highest grosser of the series, with literally hundreds of millions (2) still possible worldwide. I didn’t think a billion was possible… but it clearly is at this point.

Home is actually running ahead of How To Train Your Dragon 2 right now. Beating the domestic number would be a very positive event for DWA, especially given that Dragon was a sequel and it was a summer film. I doubt that Home will come close to Dragon 2 internationally, which speaks to the ultimate profitability. But if it comes close, that’s still a big win. That would give DWA winners at Fox for three years in a row: The Croods, Dragon 2, and now, Home. It would also kick current thinking in the teeth… that familiar brands are the best way to go. If DWA can keep producing one new strong, original franchise player a year, it could quickly put Rise of The Guardians (Santa, Easter Bunny, etc), Mr. Peabody & Sherman, and the spin-off of Madagascar in a different light.

The Longest Ride simply failed to hit the marks (Nicholas Sparks meets Nashville) it was seeking. It is by no means a disastrous opening. Just not a great one.

Insurgent is now, officially, a mature series. The number ain’t going to change much on the last two films… domestically. But there is still some hope for real growth internationally. Indications are (someone will kindly correct me if I am wrong) that there are a lot of territories out there to still open and Insurgent is already close to Divergent‘s international total. If Mojo’s charts are accurate, high- grossing countries like China, France, Germany, Russia and Mexico are all still untapped and international could add another $100 million before its all done, taking the franchise to or close to the $400m worldwide mark.

Indie expansions are getting a lot of play this month. $5.7 million for the weekend and a cume coming up on $10 million seems like a ton for Woman in Gold, a Nazi artwork-return drama. The expansion of nearly 6x the screens of opening weekend led to just under 3x the opening, which is a very solid number.

Also from The Weinsteins, Radius’s trend-setting choice not to day-n-date It Follows continues to pay off. Our estimate for this weekend is much higher than some, but whether the film is down a little or up a little, the numbers are very good… under the circumstances. With word-of-mouth like this, it makes you – or it should make you – wonder what would have happened had this been released in a normal way and had a bigger initial sampling group. I am glad that this opportunity was not  squandered by Radius… but we are heading to the next iteration of indie distribution, where opportunities like this – great movie, great critical acclaim, popular genre – are never day-n-date VODed and that bigger theatrical distributors are more anxious to buy these kinds of films. Radius is a terrific company, but they have had quite a few films fall into their VODing hands that were really strong commercial plays. These have been some of the most successful VOD films… but could have been more.

The trend set by Radius is seen with Clouds of Sils Maria, a truly great movie that IFC is releasing in theaters without a VOD date set, much less launched on the same day or within a week. The result this weekend was a strong $28,700 per-screen on three (by estimate).

And Danny Collins, from first-time distrib Bleecker Street, has taken its time and is seeing some payoff from their seeding of the film. Pacino’s made four “small” films in a row (Stand Up Guys, The Humbling, Manglehorn, and Danny Collins). The Humbling had a messed-up run at award season and might comeback theatrically… we can hope. Good movie. Barry Levinson directing. Buck Henry script. Stand Up Guys didn’t do much. IFC is bringing out Manglehorn, but that strong David Gordon Green film will challenge audiences in a commercially unfriendly way. So it looks like Danny Collins will be the top grosser of the group. Pacino is having a career resurgence thanks to his daring, interesting choices. I hope audiences will get to see it.

Also continuing to expand well is While We’re Young from A24, adding about 8x the screens and doing about 3x the gross. Solid against the expectation on these kinds of expansions.

A24 also has the most excellent (and most horribly titled, for commercial purposes) Ex Machina, which did an estimated $61,750 per screen on 4, behind only Spring Breakers in the distributor’s short history. This is another film, like It Follows, that feels like it could have been a lot bigger with some more marketing firepower (read: money) behind it. I will try to find out the story behind Universal selling domestic rights to A24, because it seems like someone over there blew the pooch on this one.

Also in exclusive release, documentary Dior and I did an estimated $22.3k per on 2 from Orchard.

Friday Estimates by Still Furious Klady

Saturday, April 11th, 2015

Friday Estimates  2015-04-11 at 8.02.37 AM

BYOB Weekend

Friday, April 10th, 2015

byob_applewatch

Delivelution: April 2015 – Pt 1, Unscrambling Eggs

Thursday, April 9th, 2015

Pregnant again.

Before film, all moving entertainment content was live. Movies were the first born. It took until 1951 for television to be birthed for a consumer audience. The Delivelution had twins in 1976 with the first national cable networks and the launch of commercial videotape player/recorders. Baby 5 was commercial DVD in 1997.

And now, streaming.

We are still in the first trimester of What’s Next for the content delivery business. But we can expect the baby to arrive with most of its fingers and toes in a couple of years, with surprising symmetry, 20 years after the launch of sell-thru DVD, as DVD came about 20 years after VHS and VHS 25 years after broadcast TV.

Of course, I have left out a lot of the detail work in between these “children.” The Internet, for one. But this is not unintentional. The coverage of the Delivery Evolution of content tends to get caught up in those “trees” and to lose view of the “forest.”

The phase we have been in for a couple of years and will continue in for a couple more is an unscrambling of the content eggs.

For almost 40 years, cable has been at the foundation of post-theatrical content revenues. And the industry has built and torn down infrastructure over that entire period, seeking maximum revenues. Cycles have repeated endlessly. Empires have been built and burned. But it terms of the broad strokes, pretty stable. As a result, cable companies that were already wiring homes, were able to build a second arm of their businesses wiring the internet into those same homes. And some became content players. Vertical builds became all the rage. The world was being reduced down to a handful of mega-businesses.

But while there is an element of that still going on, something changed a few years back. These giant conglomerates realized that they were not maximizing revenues anymore with everything under one roof. The savings attached to being consolidated were less than the perceived potential earnings of smaller, more lithe units chasing maximized revenues.

Meanwhile, in The Delivelution, content library values were bottoming with the DVD ownership business. DVD went from being a massive added-revenue situation to being integrated into steeply rising costs of production and marketing and when it hit the wall, it was showing signs not just of maturation, but old age. Pricing had become so low and sales so high that people who were buying out of habit were looking at piles of unwatched, valueless DVDs. Moreover, Netflix came along with a cheap rental solution that made ownership seem silly for many consumers.

So where was The Money? Back to the cable companies. Around $100 billion in gross revenues annually on the cable/satellite side alone. Content costs were relatively low. And so, content providers started to squeeze. And so began the post-DVD second generation The A La Carte Era.

I am simplifying, but for the purposes of this column, forest, not trees.

And so… now we are in the period in which everyone is trying to unscramble their eggs and to sell them much more carefully than they had over these last 40 years of relative post-theatrical stability.

My date for the start of this era is June 9, 2009. That is the day the SAG contract with AMPTP was overwhelmingly voted in by SAG’s members. The agreement with SAG, under the claim that there was little-to-no money in the “emerging technology” of streaming had cleared a number of cost hurdles for the content owners and buyers.

Hulu, initially a partnership between NBCUinversal and Fox with Disney coming aboard in 2010, started streaming reruns in 2008. The 2009 SAG agreement gave those companies a 24-day free rerun window. Hulu announced its first profitable quarters in 2010.

Also in 2010 (July 6), the first streaming deal with a massive price tag was announced, as Netflix and Relativity Media did a $100 million a year deal to bypass traditional pay tv and to go direct to Netflix after theatrical.

This event triggered every content owner that was being paid at significantly lower rates (which at the time was everyone) to withdraw their content as quickly as possible. Both Disney and Sony found ways out of their full agreement with Starz, which was the top provider of streaming studio movies to Netflix at the time.

Also in 2010, HBO Go launched with some films from the four studios with which they have output deals, but with more of an emphasis on the original HBO content library. And Hulu launched Hulu-Plus, which allowed subscribers to push some of their reruns to TVs, instead of just computers and phones/tablets, and slowly added some exclusive content.

Streaming, even at the high prices that Netflix was paying, could not replace the lost DVD revenue. But it was a new revenue stream that made the pain a little less dramatic.

But as these new services rolled out, there was actually less and less major studio content available to stream. Studios didn’t rebel against HBO. But when it came to Netflix or Hulu-Plus or eventually Amazon, etc, they want(ed) to get paid.

And looking at the broad strokes, we’re still there.

The EPIX streaming deal with Netflix includes Paramount and Lionsgate product, is non-exclusive and limited to films that are actually playing on the EPIX cbale/satellite network.

Warner Bros has its HBO relationship and has also built out the Warner Archive product for streaming. They also bought Flixter a few years back, which may ultimately be something or nothing. But the vast majority of their library is not available for streaming.

Sony owns Crackle, which has about 150 Sony library movies available at any time.

Disney has a $350 million deal with Netflix that starts next year, but it is unclear if there is much exclusivity outside of TV and there is still talk about Disney launching their own channel.

Fox and Universal have deals at HBO, but are floating a bit, though you can count on Universal’s strategy being heavily influenced by its parental relationship (Comcast).

To give you some perspective, there were nine Best Picture nominees 2 years ago, which puts us outside of their pay-tv windows. As of this writing, of those 9 Best Picture nominees, only 2 are available to stream via a subscription service, Django Unchained and Silver Linings Playbook, both on Netflix thanks to their deal with The Weinstein Company.

Think I am being snobby? Of the Top 10 grossers of that same year, only 2 are available on a subscription streaming service. Skyfall is on Netflix and Amazon Prime and Madagascar 3: Europe’s Most Wanted is currently available on FX Now (which is free with cable/satellite).

Of course, you can buy or rent any of these titles for as little as $2.99, but now we’re back to Blockbuster.

Consumers have shown, thanks to Netflix, that they are willing to pay for a subscription service so they can watch what they like when they like. But at this moment, that option isn’t on the table for most of the studio libraries. But it will be… because it has to be.

Why didn’t Blu-ray, once it got past HD DVD aka “Red-ray,” raise the bar for the sell-thru Home Entertainment business? Because as that fight was happening, cable/satellite was converting to HD and the vast majority of consumers couldn’t really see the difference between a Blu-ray disc and the cable/satellite delivery of the same film in HD or a stream… certainly not enough so they would pay $15+ for a Blu-ray disc. Yes, there is the cinephile market. I have my shelves loaded with Blu-ray. But, I haven’t bought a new one in quite a while. I get the Criterion Collection on Hulu-Plus. I have more to watch than I can handle.

Those libraries, thousands of titles deep, can’t just sit there gathering dust. They cry out for exploitation. A few years into streaming, a lot of the eggs have been unscrambled. Studios are much closer to being prepared to exploit those libraries in the new streaming/DVR-driven universe.

I don’t know the specifics of the Disney/Netflix deal, but I can say this… whoever can boast of being the exclusive streaming home of the Star Wars library has a huge advantage. Whoever can boast about being the exclusive streaming home of Pixar and Disney films has a huge advantage. As we critical types are gushing about “House of Cards” or “Transparent,” in the real world, there are 20 million homes that will choose to pay monthly for a subscription that will include a densely-packed  subset of films that are beloved. And each studio has a library with that kind of muscle.

Will Disney give Netflix that advantage or will it build its own business? That is the mega-question of the next couple years.

In the cable era, it worked both ways. None of the other premium cable networks were ever able to match HBO’s subscriber base. But they sold movies to HBO and eventually, a few studios got together and built their own premium network, which was part of what drove HBO to shifting focus to more original programming.

But the key here is the library, not just the first wave of “pay-tv” revenue. None of it is getting more valuable sitting on the shelf. And for the first time in history, technology will allow content owners to make everything they own available to audiences at any time.

The questions are, what does the media experience look like for the consumer and how does the money pie get split up moving forward?

Those questions and more in Part 2: Meet The New Bundle. Same As The Old Bundle, Part 3: The Tyranny Of The Old, and Part 4: $200 Billion Is Never Enough.

Weekend Estimates by Premature Summerlation Klady

Sunday, April 5th, 2015

Weekend Est corr 2015-04-05 at 11.56.20 AM

A mega-opening used to be a shocker. Now, not so much. We never saw a $100m opening before 2002′s Spider-Man. And since 2005, we haven’t had a year with fewer than two. In 2012, we had four. Three in 2013. Just two last year, leading to “sky is falling” stories that didn’t account for the massive budget tightening that made last year one of the best years for most of the studios, in terms of profit (oh, that!) ever. And now, our first $100m opener of 2015.

It’s interesting, looking at the chart, that Disney’s Marvel division is the superstar of Hollywood right now and they only have three $100 million openings. That might put opening-mania (brought to you by the breathless media) into perspective. Marvel will have its fourth $100m opening in four weeks, perhaps the second $200 million opening in history (after their own Avengers).

The other striking thing is how odd last year really was. For one thing, Transformers: Age of Extinction delivered the lowest overall domestic gross from a $100m+ domestic opening so far. $245 million after a $100 million launch.

But on the world stage, none of the three films that did over $300 million domestically did as much as $800 million worldwide. And two of the films in the mid 200s (Transformers and Hobbit) did over $950 million each. Even if one uses the China Asterisk (which we really should when discussing mega-grosses), Tranformers would still be over $900 million worldwide and Hobbit around $895m. (For me, the “China Asterisk™” is counting the China gross for American films at 50% the revenue value for the distributor/studio/producer of any other country’s gross. This is because only 20% of China theatrical grosses are returned to distributors, as opposed to about 45% for most foreign territories and 55% domestically.)

So are the 2014 numbers an anomaly, or the future? No one can really know. Our first $200 million domestic grosser of 2015 will be Furious 7 and it seems like a lock to do over $800 million worldwide. So that will end last year’s trend. Avengers 2 will do likewise.

For the last decade, big films with over 70% of the gross coming from international have been 36% of the cases (10 of 28). Of those 10, two Hobbits, two Ice Ages, a Pirates, and a Transformers (6 total) grossed less than $300m domestic. Bond, Hobbit 1, Potter 7a, and Avatar both broke $300 million domestically and $800m worldwide, suggesting the imbalance was less significant.

What strikes me is that we may be seeing with franchises very much what we saw with movie stars in years past. Perhaps it is not, as I have felt in the past, that the rest of the world is simply behind the U.S. on the trend line by three or four years (the fading of 3D being the next big landmark if that is the case). But rather – or in addition – that there are franchises that, somehow, just play better internationally than domestically.

Note – Almost all $500m+ worldwide grossers now gross more internationally than domestically. That’s not what I am talking about. I am talking about over 75% coming from international. Ice Age, the last Transformers, the last Pirates. Are these the Brad Pitts of current Hollywood?

Also… this is the one weak part of Marvel’s game, which you can be sure they are working on improving. They have had just two films of their ten – Avengers and Iron Man 3 – do over $460m internationally. This is not a dig at Marvel. But if things ever slide domestically, it is great to have international there as a safety net (or cash cow). Avengers did 59% of its business internationally. Someone with a slide rule is worrying today about getting that percentage – no matter how it does domestically – up to IM3‘s 66% or better. If they can do that, they can start projecting champagne baths for an extra couple of years.

Great opening by Furious 7. Impressive. And Furious 7 is a Top 10 all-time. (Seven of those 10, btw, are not 3D… for those who endlessly worry about 3D asterisk-ing stats.)

Not a whole lot else to chew on this weekend. Drops were modest, but nothing to write home about.

It Follows is not growing, even with added theaters. It has nothing to do with the movie. It has to do with marketing… or lack thereof. And that was a decision that came long before the (correct) choice to push VOD back. They should have never set the film with a day-n-date VOD. But we’re discussed that in depth before. VOD is great if you are aiming relatively low… and terrible for a movie that has real commercial appeal. (Kinda like my Old Harvey Weinstein thing… great cutter if your movie sucks, terrible cutter if your movie is great.)

While We’re Young added 7x the theater count and got a 2x bump. Still, it seems to be running more in line with bigger A24 films, rather than the smaller ones. One never knows, but $4m – $5m is looking doable for this one (which would make it Top 5 for A24).

Friday Estimates by Kladious 7

Saturday, April 4th, 2015

Friday Estimates 2015-04-04 at 8.39.48 AM

What can you give a movie that’s got it all?

After 7 movies, in which quality seems to be a minor detail, the Fast & Furious franchise is making its next great leap, it seems. The first film was a hit back when DVD drove the business and international was increasing… but the film wasn’t a big hit overseas. Tokyo Drift was an attempt at reaching out… and was the commercial low point of the series. But when they returned to the well, BOOM, 2009′s Fast & Furious not only had the highest domestic gross of the series, but it nearly doubled the previous best international gross. International doubled again for Fast Five. And it grew another 25% for Fast & Furious 6. Meanwhile, domestic crept up too. But based on this opening, Furious 7 should take at least a 30% leap over the last film here at home alone. That’s big. And if international follows, massive, threatening the billion dollar mark.

Now, it may turn out that this is just a massive front-loaded opening day. But… well… we’ll see…

Pretty much everyone else avoided this date. Harvey Weinstein grabbed a counter-programming slot to okay-ish results with Woman in Gold.

Home is holding well, more good news for Jeffrey Katzenberg.

Cinderella is holding even better, though Disney is probably a little less than thrilled that this one isn’t stronger, cash cow though it may be.

Insurgent continues to fall ever-so-slightly farther behind Divergent.

It Follows expands by 437 screens, but drops 35% from last Friday. It’s great that the hardcore showed up for the hardly-advertised film, but it’s difficlut to change course from a day-n-date opening. This is a success compared to what the numbers would have been with d-n-d, but a disappointment when you realize how this film might have done in a straight theatrical.

BYOB April Fool’s Day 2015

Wednesday, April 1st, 2015

byobhumpday

20 Weeks of Summer: Glory Days

Monday, March 30th, 2015

nostalgia-2015

We’re all used to sequels, remakes, reboots, rehashes, reruns in the summer. But as a 50-year-old man, this summer strikes me as not only being the same old, same old, but a full-on parade of films coming directly from the imaginations (or lack thereof) of people my age, give or take a few years.

There are three tiers to this celebration of middle age. Going farthest back, Tier One is made up of films made from TV shows that We grew on back when there were 3 networks and no more than 4 or 5 active VHF channels in most cities. Mission: Impossible 5 and The Man From U.N.C.L.E.

Tier Two is the direct track… actual sequels, reboots or relaunches of films from the 1980s and 1990s – Mad Max, Poltergeist, The Terminator, Jurassic Park.

Tier Three is very, very familiar homage, represented by Straight Outta Compton, Pixels, Pan, Dope, and Tomorrowland.

I think 11 actually is a trend.

But mostly, it’s timing. 20 and 30 years later, everything old is new again… plus, for those of us for whom it is actually old, there is built-in love.

You can expect a lot of writing about retreads. How harsh it gets – or doesn’t – will end up being based on the box office. Even film critics eventually submit to peer pressure.

But I would argue – and often do – that at over a hundred years old, it is now time to show the respect to cinema as a mature art form, as we do literature and theater, where reproduction, recycling, and homage are the norm.

Yes, there is a need for The New. And as summer will tend to bring out in studios, even The New may end up being rather familiar. This summer, new-ish product includes franchise or potential franchises like The Marvel Universe, Pitch Perfect, Insidious, Spy, The Transporter, Ted, Magic Mike, Despicable Me, the Amy Schumer Universe in Trainwreck, The John Green Universe. Only the last two are truly “new,” even if there has already been a John Green-based hit. Still, all of these have launched (or come of age, as Marvel has, in the CG era) during this millennium… the last 15 years.

I am excited for some of the movies referenced in the last paragraph. But I am more excited about reliving the first blush of my adult-ish movie love. I remember where I was when I saw Mad Max (AMC Omni, Miami), The Road Warrior (Mann Plaza, Westwood), Mad Max: Beyond Thunderdome (Loew’s 84th, NYC), Poltergeist (170th St Theater, Sunny Isles), The Terminator (HBO), Terminator 2 (Cinerama Dome, LA), Jurassic Park (McClurg Court, Chicago).

And I will remember where I saw Ghostbusters (and that they shot around the corner from me in NYC where they built those fake cracked streets) when it is remade. Then the Michael Fassbender remake of Tootsie will remind me of another theater. Then, the new Rocky. And Conan. And The Toy. And Tron. There was a bad remake of Trading Places with Get Hard this last week. When will we get Zach Galifianakis as Mr. Mom? And the ultimate meta-kitsch… a remake of the self-reflective classic, The Big Chill?

But this summer is the first giant wave of my movie coming-of-age crashing on the shore of my middle age.

Tomorrowland screams 80s Spielberg to me. Dope feels like a modern response to Car Wash. Pan is the latest spin on Peter and Hook. Pixels seems like a straight up rip-off of Ghostbusters with a Wreck It Ralph twist. And Straight Outta Compton looks like it’s going to be a piece of “our” personal recent history… a Boyz In The Hood (1991) meets The Blues Brothers.

I was a little kid when I stayed up after my bedtime to watch “Mission: Impossible” on TV. And “Man From U.N.C.L.E.” was a fave in UHF reruns, between “The Saint” and “The Prisoner.”

There are youngsters (under 30s) who know these films from DVD or cable or whatever and are excited about the return. But most audiences under 20 will truly be being sold this product for the first time. Or they will be force-fed  older versions in anticipation of the new ones… but the new ones will be “theirs,” just as the first three Star Wars films belong to one generation and the second three another.

I have to admit… I am kinda excited. I want to feel the sheer joy that I felt all those years ago, the first time around. Really, that’s what I want to feel every time I watch a movie.

But déjà vu and joy together? So looking forward to it…

Weekend Estimates by The Sky Isn’t Falling This Weekend Klady

Sunday, March 29th, 2015

Weekend Estimates 2015-03-29 at 9.44.44 AM

Not a whole lot to add since yesterday.

Estimates for Home are running stronger than Friday suggested, which may be a sign that the film plays a little young… but it’s Fox’s best DreamWorks Animation opening to date and a happy weekend for Katzenberg, even though this doesn’t appear to be a game-changer after the DWA troubles of the last few years.

Get Hard hammocks right in between The Other Guys and Blades of Glory (less than 5% in either direction) as Will Ferrell’s #4 live-action opening. The ongoing question will be how much of the opening came with Kevin Hart and how well will the combination of his and Ferrell’s audience hold.

Radius and parent  Weinstein Co. pushed It Follows out into 1218 theaters and got a result that is great for a VOD film that didn’t have much marketing and is iffy for a proper theatrical release. There has been some spending on TV ads, but I don’t know the budget. That said, it looks like the film can pass $10 million in domestic theatrical before going to its delayed VOD and will more than double the #2 theatrical gross in Radius’ three-year history.

For those who want to argue that day-n-date VOD is great – and it is, for the right films – the claim is always, “It never would have done big business in a regular theatrical release.” Obviously, all any of us can do is speculate. But of Radius’ 28 releases so far, I have argued only that three titles would have been much more successful in more traditional release: It Follows, Snowpiercer, and Bachelorette. Each of the films has a clear, marketable point of view. Two of them have strong reviews, aka support from the media. And there are plenty of comps suggesting that solid, highly profitable theatrical releases were possible for each of them.

Specifically, as regards It Follows, it seems to me a reach to suggest that in light of female-audience-driven horror having had great success over the years, that the film could not have done in excess of $35 million in theatrical and as much as $70 million. Part of what is a pleasure in the movie is that David Robert Mitchell took familiar genre elements and turned them on their head… but leaving plenty of material that could be utilized for a strong TV push. As for Snowpiercer, do people really think it could not have done John Wick money (or better)? And I would still argue that in light of both Bridesmaids and The Hangover series, Leslye Headland’s film could have easily been an $80m+ theatrical grosser.

Clearly, some feel otherwise. It is all conjecture, on both sides. But one thing is crystal clear. Day-n-Date VOD has a glass ceiling. If $10m or less is a happy goal for a film, all in, it is great. Ad costs are minimal. Returns on gross sales are much better. Less risk. Wide distribution. All good. But if your aspirations are $20m or higher, it is not your delivery method. There is nothing wrong with this… just knowing your tools.

The VOD dream is not new. Pay-per-view has been a dream of movie distributors for decades now. And it’s never fulfilled those dreams. It’s not worthless. There is money there. And yes, if you put Harry Potter 9 on day-n-date VOD, the numbers would be staggering. But there is not a chance in hell that Disney would put Avengers 2 into day-n-date. Windows maximize their revenues. And they know it. But that is the trick. Of course windows work great for Avengers… because the profile is massive. With a popular product, it obviously makes sense to sell it four times instead of only two. It’s the tweeners, even on a studio level, that are difficult… which is why studios don’t want to make tweeners… no one wants to lose their job on a shoulder-shrugger.

There is a way for more experimentation and smart plays with VOD and theatrical. But studios have to be willing to make concessions to theater owners to make it work. Day-n-date is a mirage for the most part, when you take all revenues into account. The studios, four of six of which are owned by non-entertainment corporations, are as interesting in minimizing risk as maximizing profits. So the exhibitors know that if they allow the door to open, the economics of their business change, and if VOD ate, say, 20% of their overall business, many theaters would have to close their doors. And if that is the future, that is the future. But there is a very good chance – I would say a nearly sure bet – that theatrical revenues will not only be important to the future of cinema, but that it will be increasingly important as we continue into the digital future. And if, say, over a six-year period, we lost 40% of our theatrical screens, they become a sinkhole that could not be easily re-filled.

I would love to see a full-scale experiment for a year or two in which the exhibitors participated with the major studios in testing day-n-date for a set number of releases. Maybe the results would suggest that theatrical is destined for a niche position. Maybe the opposite (my belief). But at least there would be a way to measure consumer responsiveness, which could then allow a response to develop. As it is now, it’s Mutual Assured Destruction, which is, indeed, MAD.

While We’re Young was the big exclusive release of the weekend with an estimated $56k per screen on 4 for $220,000. This is just a little less impressive than A24′s highest grosser, Spring Breakers. And given that Noah Baumbach’s best career domestic gross is $7.4 million, there is a good chance this will be his biggest film.

Also looking strong in exclusive release are two documentaries, Vietnam doc Ride The Thunder with $22k per on 1, and Wim Wenders’ photographer bio, The Salt of The Earth, with $11k on 4.

About 10,000 people went to go see Serena, the Jennifer Lawrence/Bradley Cooper-starrer that couldn’t get a distributor for over a year.

And it bears mention again… Still Alice is the biggest grosser for Sony Classics, aside from two of the Woody Allen movies, since Capote, a decade ago. Tough subject, female lead, not much for under 30s, Best Actress but not Best Picture… doing bang-up business in theatrical for SPC. It’s not The Imitation Game, but it is a major indie hit.

Friday Estimates by The Home Klady

Saturday, March 28th, 2015

Friday Estimates 2015-03-28 at 10.08.18 AM

Lots of happy stories at the box office this weekend… for a change. That is to say, not just one movie having a story to tell and everything else looking weak.

Home has a good chance of being DreamWorks Animation’s best opening since it moved to Fox a couple years ago and the third best non-sequel opener in the history of the company. No, it doesn’t look like the next Shrek, but a solid success on the heels of last summer’s solid success with Dragon 2 and Jeffrey Katzenberg may get some sleep this weekend.

After this weekend, three of the top five openings of 2015 will have targeted children (Spongebob, Cinderella, Home). I look forward to the New York Times expose on how the market has shifted away from its new focus on women – this week’s crap analysis – to children. I know that it is frustrating to perceive a lack of interest in women in the film industry, but it should not cloud our minds and send us down the road of making up misleading stats. Hollywood has always had a strong interest in the female audience and, like all other audiences, exploiting it. You can be sure that if Screen Gems had It Follows, they would have opened it to over $20 million by targeting the strong female horror audience that has driven many of Screen Gems’ biggest hits. The New York Times leaned on the lame “it’s cyclical” thing to cover their ass with a lot of bad reporting on their “women in charge” story. But the cycle is Disney targeting balancing their male lean starting back with the femme re-build on Tangled in 2010. Alice, Oz, and of course, most profoundly Frozen have all come since. Insurgent is just a copy of the 7-year-old Twilight franchise. And 50 Shades is its own thing. As for why boys aren’t coming to the box office in huge numbers early this year, poking at two delayed-because-they-were-trouble films (Jupiter Ascending and Chappie) is closer to a lie than disingenuous, especially while avoiding the surprise male-driven success of Kingsman: The Secret Service and the sexually ambiguous Spongebob.

Enough about that… though I did see an editor discussing Brooks Barnes’ absurd article on CBS this morning and it occurred to me that the editor, who seems to think that the article made any sense at all, might be the problem. (Amusingly, the movie fan co-anchor chewed up some of the NYT BS in a cheerful, unintentional way… just by knowing a little bit about movies.)

Meanwhile, Get Hard‘s opening is nothing to sneeze at. After some wildly over-the-top political correctness came out of the film’s SXSW premiere, Warner Bros actively avoided addressing the issue and as a result, it dies quickly. It may not be the most honest play, but it worked. This $12.8m opening day is the third-best of Will Ferrell’s live-action career. And yes, Kevin Hart certainly is a big part of that success. But Ice Cube-led Ride Along is the only film of Hart’s to open as well, with Think Like A Man coming close. But to be in the position to be wondering which actor deserves more credit for this opening is a good place to be.

Insurgent is doing okay. Won’t match Divergent, which was a bit soft. Keep those talks with the company-buying suckers… uh, Chinese… going.

Cinderella will come in well behind the other Disney live-action adaptations, but it also seems to have cost a lot less, so…

Kingsman: The Secret Service has hit $300 million worldwide. I don’t know if it will ever play China, but if it doesn’t it will be a hugely popular illegal DVD, as it is really a kind of modern chopsocky picture, albeit with more weapons. But a lot of balletic violence should be very popular in the Far East. (The film does not seem to have opened Japan either.)

Expanding well is It Follows, which no longer has day-n-date VOD following it and trying to murder its financial prospects (did Harvey have to have sex with someone to make that happen?). I believe strongly that day-n-date VOD has a place that matters to the smallest indies. But I don’t know how anyone can argue that it doesn’t create a glass ceiling for theatrical. It Follows will likely be Radius’ highest theatrical grosser EVER by the end of this weekend, passing Oscar-winning doc 20 Feet From Stardom. But frankly, it is still underperforming what was possible had it been positioned as a straight theatrical months before its release, with a full and proper theatrical campaign. I’m talking $40m – $50m theatrical, minimum.

Also doing nicely in its debut is While We’re Young from Noah Baumbach, released by A24. It should end the weekend with between $40-45k per screen.

The Salt of the Earth, the Oscar-nominated Wim Wenders doc, will also close in on $10k per screen this weekend.

BYOB Thursday

Thursday, March 26th, 2015

byobglobes
What’s not Furious on your moviegoing horizon?

48 Weeks To Oscar: Academy In Crisis(?)

Monday, March 23rd, 2015

The grass always seems greener on the other side. But it is not always the case. In the case of The Academy of Motion Picture Arts & Sciences, it is a sad story of insecurity, fear, oversized yet easily bruised ego, and a lack of perspective on itself.

With due respect to a very bright and talented person, it started with the hiring of Dawn Hudson, whose top achievement was The Independent Spirit Awards, which has bounced around time slots, live shows, taped shows, locations, etc for years with an ever-declining significance, mostly because it become a faint echo of The Oscars a day before The Oscars. When it really was just a great cocktail and social event on the beach for the indie world – and it is still that, in part – the organization and Dawn were fast risers on the scene. By the time Ms. Hudson left, the show had reached an uncomfortable, awkward middle age, losing much of the luster she had worked so hard to build.

So who does The Academy, whose #1 priority is that TV show that pays all the bills, hire? The person with a show on the down-slope with a rather narrow view of the movie world.

And what Dawn has brought to The Academy, skilled as she is at many things, is that anxiety of the climber. Since her arrival, The Academy, perhaps the most stable and boring of all Hollywood institutions for decades under a politburo lead by Bruce Davis, Leslie Unger, and others, has become a constant work-in-progress… that just keeps losing footing in its desperation to climb.

Dear Academy… you are the golden gods… you are the kings of all award shows… you are the pinnacle of careers. Perhaps it is time to start acting like the home run hitter rather than the kid who is scared of being picked last for the kickball game even though you own the ball and the field.

And I have news for you. You can throw yourself, publicity-istically, on the pyre of Political Correctness all you like, but even adding 100 annual new members who would not normally qualify to become Academy members, the Academy is going to be white in the vast majority for many years to come and statistically dominated by men for not quite as long, but for a while. And if The Academy is going to remain above the rest of the groups, the average age will be “Old” forever. If more than 10% of The Academy is under 40 at any time, The Academy starts to become a joke. This organization has built its reputation – deserved or not… I will leave that to others to endlessly whine about – on the veteran status of its members. Yes, there is some under-40 talent out there that deserves a place at the table. Almost all of those are actors.

But here is the note… Jay Duplass is already 42. Mark Duplass turns 40 next year. I think they make a pretty fair tipping point. Not The Puffy Chair at 30. But multiple movies a year as producers, writers, and actors? They have come of age. Maybe next year. Maybe the year after. But they have accomplished enough to be taken seriously as potential Academy members. Make sense?

The annual drama around each telecast is, to say the least, idiotic. The ratings go up a little. The ratings go down a little. You remain on top of the heap. The Grammys made their run at The Oscars. But they have fallen back. And they have a huge built-in advantage. They have turned their award show into a 3-hour concert starring the top musical performers in the world. Music performance is a mega-business and people will tune in for one-of-a-kind moments like that. But sorry, Oscar… you can’t emulate that because film is not a live performance medium. So get over it already.

There are two issues that are very controversial within The Industry, though most civilians could not care less… or don’t know that they care because its all subtext. The Voting Process and The Date of The Show.

Even within The Industry and within the sliver of industry watchers called Oscar Writers, there is plenty of debate on both of these issues. And to be completely fair, the significance of both is utterly subjective. Personally, my position on both issues is about consumer/civilian benefit. I believe in Oscar – although it has become a media obscenity on many levels – and I want the show and the honor to not only survive, but thrive. And I believe that transparency – even fake transparency – on these issues allows the conversation for civilians to become about the show and the movies and not constant debate over minutiae.

The are two outstanding issues about voting. Should there be 10 nominees or 5 and should there be a simpler voting system that doesn’t require endless explaining every season that still doesn’t stick for 99% of people you ask (including Oscar writers)?

My position, regardless of the number of nominees, there should simply be weighted voting of each voter’s Top 3 choices for Best Picture. Very, very simple. This balances out the (irrational) fear of 10%+1 or even 20%+1 winning over films that are more widely popular. If someone chooses not to vote for 3 then their vote for picture is eliminated. Period. No shenanigans. I am not a supporter of any system designed to get to a 50%+1 winner because it has a legitimate chance of devaluing passion. But I agree that just picking a #1, especially with a wider field, can be problematic.

As for the question of 10 nominees or 5, I should say that I do not support, like, find interesting, or condone the current middle ground in which the number floats depending on the math between 5 and 10 nominees. This is not something fans can rely on. It is a distraction with no upside. If you are good with more than 5, just settle on 10 and let it be.

And I have become a fan of the 10 nominee system over time. Initially, I was against it, fearful that it would, in fact, be manipulated into embarrassing choices as nominees. But that is, factually, not what has happened. The first year of the expanded list was, by far, the most commercial of the six years to date. A big part of that was Avatar‘s massive gross sitting atop the chart. The 10 films that year averaged $151m before nomination and $170m per in final domestic gross. This year, it was $26m per film before nomination and $83m in the end. I believe that is the low for pre-nomination gross in the modern history of Oscar, with 5 nominees or 10 or in between. Of course, the post-award totals were skewed mightily by the massive success of American Sniper and were not a record low at all.

How do you interpret these stats? Again, all opinion on every side. Some would say that the low average gross at the time of nomination was bad for The Academy and left the Oscar show with a pool of films that didn’t draw an audience. Others (like myself) would say that this shows that discrimination about gross has finally been left behind by Academy members and they are picking their favorites in a more honest way and that this benefits the power and legitimacy of The Oscars in the short and long run.

How about this? When Crash won in 2005, it was the lowest grossing winner since 1987′s The Last Emperor. But it still was in the unintentional tradition of one of the top two grossers of each Best Picture field winning. In the 20 years prior to Crash, only twice had the Best Picture winner not been amongst the top two domestic grossers in the BP field by the time the dust settled (Last Emperor and American Beauty, which couldn’t catch up to The Sixth Sense or The Green Mile). The DepartedNo Country For Old Men, and Slumdog Millionaire, the three films with just 5 nominees after Crash, also followed in the two two tradition.

And then came the first year of ten nominees and The Hurt Locker, which was #8 domestic grosser amongst the 10 nominees. Eighth of ten, Like The Last Emperor was fourth of five, so not a singularity. But a very rare event. Was it a fluke?

Well, the next season, The King’s Speech took us back to the old “top two” stat, essentially, by being the #4 domestic grosser amongst 10 nominees. But then The Artist was #7 of 9 nominees. Argo returned to “top four,” though in a field of nine, so a little less successful, statistically, than the old “top two.” 12 Years A Slave, which was attacked pre-release by The New York Times for having potential awards problems because of anticipated low grosses, was #5 of 9. And this last season, Birdman was #5 of 8 Best Picture nominees.

So in four of the six seasons with more than 5 Best Picture nominees, a film won from the lower half of the list of domestic grossers, when this had happened only once in the 24 seasons of 5 BP nominees before (American Beauty was #3, putting it dead center).

For me, this statistical reality, combined with the many strong movies that have gotten the opportunity to be nominated for Best Picture, make me a strong proponent of the 10 Best Picture nominee system.

Next… The date of the show.

This one is a no-brainer to me. Earlier. The only reason to give out awards for the last year’s movies a full two months (or more) after the end of the year is the claim that the show couldn’t be put together quickly enough to manage the transition. But I say, “BS to that.” Just do it.

Maybe ABC wants the show in a sweeps month (February), so okay. But aside from that, get ‘er done.

And by pushing the Oscar back into late January, early February, the industry will be forced to abandon strategies that rely so heavily on late entries. Also, the films that want to open in October and November will be spared the insane expense of holdingholdingholding for months just to have a chance to be in the game. How much earlier will other awards go? Who cares? Let them destroy their brands at their own risk. Academy is king/queen.

The Show – Big barrel of monkeys.

Let me keep this brief.

1. Hire a TV producer for no less than 5 years.
2. Hire a host who will commit to no less than 3 years.
3. Try to build the show to honor the movies… those nominated and perhaps those popular ones that are not. This is not a concert. This is not a hipster event to try to grab the imagination of the under 25s. These are the fucking Academy Awards. Buckle your seat belts. It’s going to be a bumpy ride. (Note to all of you who just rolled their eyes in a “TV is so much better now” posture… my movie award show eats your TV award show’s rating alive. Roll that!)
4. Get the Special Honorees on the show. The brand of Oscar is being and making movie history. Embrace it.
5. Get your nominees on stage giving out awards. Month after month is spent building up these people. Audiences want to see them, not the young stars on April’s big action movie. They will get their slot on the MTV Movie Awards.
6. Try to build a second show that so clearly honors and explains the work of some of the below-the-line categories that those branches are happy to be a part of that show and can remove some of the time stress from the big show. Just kicking them to the curb is not, as The Academy has learned repeatedly, going to happen. Ever.
7. If you want to honor the hit movies of the year, don’t pussyfoot around. Just do it. The tuxedos will enjoy it too. Over do it. Go big. Then go back to honoring the movies that are nominated.
8. Did I mention that this is not a concert… not a stand-up venue… not about pandering to people who will never watch a stuffy old awards. It is about making a great show for the 40 million or so people who will not miss a stuffy old award show under pain of death.

Be The Academy.

Engage the limitations of your role in the world with honesty and kindness, not fear and excuses.

This is an exercise in branding. 95%. And what is The Academy’s brand. Established stars in tuxedos celebrating the hell out of themselves.

A.B.C. Always Be Cocky. You are The Academy of Motion Pictures Arts & Sciences. Step to it.

48 Weeks To Oscar: Academy In Crisis(?)

Monday, March 23rd, 2015

The grass always seems greener on the other side. But it is not always the case. In the case of The Academy of Motion Picture Arts & Sciences, it is a sad story of insecurity, fear, oversized yet easily bruised ego, and a lack of perspective on itself.

With due respect to a very bright and talented person, it started with the hiring of Dawn Hudson, whose top achievement was The Independent Spirit Awards, which has bounced around time slots, live shows, taped shows, locations, etc for years with an ever-declining significance, mostly because it become a faint echo of The Oscars a day before The Oscars. When it really was just a great cocktail and social event on the beach for the indie world – and it is still that, in part – the organization and Dawn were fast risers on the scene. By the time Ms. Hudson left, the show had reached an uncomfortable, awkward middle age, losing much of the luster she had worked so hard to build.

So who does The Academy, whose #1 priority is that TV show that pays all the bills, hire? The person with a show on the down-slope with a rather narrow view of the movie world.

And what Dawn has brought to The Academy, skilled as she is at many things, is that anxiety of the climber. Since her arrival, The Academy, perhaps the most stable and boring of all Hollywood institutions for decades under a politburo lead by Bruce Davis, Leslie Unger, and others, has become a constant work-in-progress… that just keeps losing footing in its desperation to climb.

Dear Academy… you are the golden gods… you are the kings of all award shows… you are the pinnacle of careers. Perhaps it is time to start acting like the home run hitter rather than the kid who is scared of being picked last for the kickball game even though you own the ball and the field.

And I have news for you. You can throw yourself, publicity-istically, on the pyre of Political Correctness all you like, but even adding 100 annual new members who would not normally qualify to become Academy members, the Academy is going to be white in the vast majority for many years to come and statistically dominated by men for not quite as long, but for a while. And if The Academy is going to remain above the rest of the groups, the average age will be “Old” forever. If more than 10% of The Academy is under 40 at any time, The Academy starts to become a joke. This organization has built its reputation – deserved or not… I will leave that to others to endlessly whine about – on the veteran status of its members. Yes, there is some under-40 talent out there that deserves a place at the table. Almost all of those are actors.

But here is the note… Jay Duplass is already 42. Mark Duplass turns 40 next year. I think they make a pretty fair tipping point. Not The Puffy Chair at 30. But multiple movies a year as producers, writers, and actors? They have come of age. Maybe next year. Maybe the year after. But they have accomplished enough to be taken seriously as potential Academy members. Make sense?

The annual drama around each telecast is, to say the least, idiotic. The ratings go up a little. The ratings go down a little. You remain on top of the heap. The Grammys made their run at The Oscars. But they have fallen back. And they have a huge built-in advantage. They have turned their award show into a 3-hour concert starring the top musical performers in the world. Music performance is a mega-business and people will tune in for one-of-a-kind moments like that. But sorry, Oscar… you can’t emulate that because film is not a live performance medium. So get over it already.

There are two issues that are very controversial within The Industry, though most civilians could not care less… or don’t know that they care because its all subtext. The Voting Process and The Date of The Show.

Even within The Industry and within the sliver of industry watchers called Oscar Writers, there is plenty of debate on both of these issues. And to be completely fair, the significance of both is utterly subjective. Personally, my position on both issues is about consumer/civilian benefit. I believe in Oscar – although it has become a media obscenity on many levels – and I want the show and the honor to not only survive, but thrive. And I believe that transparency – even fake transparency – on these issues allows the conversation for civilians to become about the show and the movies and not constant debate over minutiae.

The are two outstanding issues about voting. Should there be 10 nominees or 5 and should there be a simpler voting system that doesn’t require endless explaining every season that still doesn’t stick for 99% of people you ask (including Oscar writers)?

My position, regardless of the number of nominees, there should simply be weighted voting of each voter’s Top 3 choices for Best Picture. Very, very simple. This balances out the (irrational) fear of 10%+1 or even 20%+1 winning over films that are more widely popular. If someone chooses not to vote for 3 then their vote for picture is eliminated. Period. No shenanigans. I am not a supporter of any system designed to get to a 50%+1 winner because it has a legitimate chance of devaluing passion. But I agree that just picking a #1, especially with a wider field, can be problematic.

As for the question of 10 nominees or 5, I should say that I do not support, like, find interesting, or condone the current middle ground in which the number floats depending on the math between 5 and 10 nominees. This is not something fans can rely on. It is a distraction with no upside. If you are good with more than 5, just settle on 10 and let it be.

And I have become a fan of the 10 nominee system over time. Initially, I was against it, fearful that it would, in fact, be manipulated into embarrassing choices as nominees. But that is, factually, not what has happened. The first year of the expanded list was, by far, the most commercial of the six years to date. A big part of that was Avatar‘s massive gross sitting atop the chart. The 10 films that year averaged $151m before nomination and $170m per in final domestic gross. This year, it was $26m per film before nomination and $83m in the end. I believe that is the low for pre-nomination gross in the modern history of Oscar, with 5 nominees or 10 or in between. Of course, the post-award totals were skewed mightily by the massive success of American Sniper and were not a record low at all.

How do you interpret these stats? Again, all opinion on every side. Some would say that the low average gross at the time of nomination was bad for The Academy and left the Oscar show with a pool of films that didn’t draw an audience. Others (like myself) would say that this shows that discrimination about gross has finally been left behind by Academy members and they are picking their favorites in a more honest way and that this benefits the power and legitimacy of The Oscars in the short and long run.

How about this? When Crash won in 2005, it was the lowest grossing winner since 1987′s The Last Emperor. But it still was in the unintentional tradition of one of the top two grossers of each Best Picture field winning. In the 20 years prior to Crash, only twice had the Best Picture winner not been amongst the top two domestic grossers in the BP field by the time the dust settled (Last Emperor and American Beauty, which couldn’t catch up to The Sixth Sense or The Green Mile). The Departed, No Country For Old Men, and Slumdog Millionaire, the three films with just 5 nominees after Crash, also followed in the two two tradition.

And then came the first year of ten nominees and The Hurt Locker, which was #8 domestic grosser amongst the 10 nominees. Eighth of ten, Like The Last Emperor was fourth of five, so not a singularity. But a very rare event. Was it a fluke?

Well, the next season, The King’s Speech took us back to the old “top two” stat, essentially, by being the #4 domestic grosser amongst 10 nominees. But then The Artist was #7 of 9 nominees. Argo returned to “top four,” though in a field of nine, so a little less successful, statistically, than the old “top two.” 12 Years A Slave, which was attacked pre-release by The New York Times for having potential awards problems because of anticipated low grosses, was #5 of 9. And this last season, Birdman was #5 of 8 Best Picture nominees.

So in four of the six seasons with more than 5 Best Picture nominees, a film won from the lower half of the list of domestic grossers, when this had happened only once in the 24 seasons of 5 BP nominees before (American Beauty was #3, putting it dead center).

For me, this statistical reality, combined with the many strong movies that have gotten the opportunity to be nominated for Best Picture, make me a strong proponent of the 10 Best Picture nominee system.

Next… The date of the show.

This one is a no-brainer to me. Earlier. The only reason to give out awards for the last year’s movies a full two months (or more) after the end of the year is the claim that the show couldn’t be put together quickly enough to manage the transition. But I say, “BS to that.” Just do it.

Maybe ABC wants the show in a sweeps month (February), so okay. But aside from that, get ‘er done.

And by pushing the Oscar back into late January, early February, the industry will be forced to abandon strategies that rely so heavily on late entries. Also, the films that want to open in October and November will be spared the insane expense of holdingholdingholding for months just to have a chance to be in the game. How much earlier will other awards go? Who cares? Let them destroy their brands at their own risk. Academy is king/queen.

The Show – Big barrel of monkeys.

Let me keep this brief.

1. Hire a TV producer for no less than 5 years.
2. Hire a host who will commit to no less than 3 years.
3. Try to build the show to honor the movies… those nominated and perhaps those popular ones that are not. This is not a concert. This is not a hipster event to try to grab the imagination of the under 25s. These are the fucking Academy Awards. Buckle your seat belts. It’s going to be a bumpy ride. (Note to all of you who just rolled their eyes in a “TV is so much better now” posture… my movie award show eats your TV award show’s rating alive. Roll that!)
4. Get the Special Honorees on the show. The brand of Oscar is being and making movie history. Embrace it.
5. Get your nominees on stage giving out awards. Month after month is spent building up these people. Audiences want to see them, not the young stars on April’s big action movie. They will get their slot on the MTV Movie Awards.
6. Try to build a second show that so clearly honors and explains the work of some of the below-the-line categories that those branches are happy to be a part of that show and can remove some of the time stress from the big show. Just kicking them to the curb is not, as The Academy has learned repeatedly, going to happen. Ever.
7. If you want to honor the hit movies of the year, don’t pussyfoot around. Just do it. The tuxedos will enjoy it too. Over do it. Go big. Then go back to honoring the movies that are nominated.
8. Did I mention that this is not a concert… not a stand-up venue… not about pandering to people who will never watch a stuffy old awards. It is about making a great show for the 40 million or so people who will not miss a stuffy old award show under pain of death.

Be The Academy.

Engage the limitations of your role in the world with honesty and kindness, not fear and excuses.

This is an exercise in branding. 95%. And what is The Academy’s brand. Established stars in tuxedos celebrating the hell out of themselves.

A.B.C. Always Be Cocky. You are The Academy of Motion Pictures Arts & Sciences. Step to it.

Weekend Estimates by Detergent Klady

Sunday, March 22nd, 2015

Weekend Estimates 2015-03-22 at 9.08.30 AM

Feels sleepy at the box office, even with back-to-back $50m+ opening weekends.

Woe to the white male. Cinderella, Insurgent, and even Fifty Shades of Grey… where is the product for us?

Oh yeah, we got The Gunman and Run All Night. Thanks a lot, Hollywood! If we white men weren’t directing all but one of these films and dominating the executive offices, we would be deeply, deeply offended.

Yeah, we got Kingsman: The Secret Service, which continues to do strong numbers. And American Sniper, of course. But those Hollywood people only teased us with those Oscar nominations that went no where. SNUB!

At least The Weinsteins decided to expand the pure, old-fashioned gore of It Follows into more theaters… wait… it’s brilliant, non-traditional horror? And there are some hot girls, but they aren’t exploited the way they usually are in horror? And it’s about something bigger? Damn it! At least they screwed it up by not deciding on a more aggressive theatrical position until after it was slotted for VOD, spent almost nothing in marketing, and can now claim that it didn’t really work, just doubling the gross by expanding to 8x the screens this weekend. See… can’t blame VOD.

Okay… coming out of character… can’t stand it anymore.

It Follows is a movie that could have easily done $20 million domestic if released with that intent. Screen Gems would have opened it to 20 back in the day. Teenage girls would love it, if someone sold it to them. Radius knew something was up when it became the must-see for serious genre fans… but the film is more than that. There should be op-ed pieces being done on it and fights on various Gawker-based sites. Every time I describe it someone, they want to see it.

But someone has to tell them it’s in theaters. I have zero question that there is a day-n-date VOD glass ceiling that makes the releasing method great for many indies and a complete soul killer for some of the films that would have been break-outs back in the days before VOD came into vogue at IFC and Magnolia. And I have enormous respect for so many of the choices that IFC and Magnolia and Radius make every day of the year. These companies are, with Sony Classics and a parade of smaller distributors, the soul of cinema in this era. BUT… they need to stop pretending that day-n-date is always the best choice for a “smaller” film. It Follows has been blowing people away for almost a year already. Snowpiercer came from a filmmaker with a history of making beloved films… and this time, it was in English! And to be fair, plenty of people are still talking about Harvey Weinstein blowing his opportunity on Paddington, which people of all ages seem to love.

Weinstein/Radius needs The Clash’s “Should I Stay or Should I Go?” playing in the office 24/7, because they are at the crux of the dilemma for indie film these days. If I go there will be trouble. But if I stay there will be double. It’s bloody hard to play the middle.

And it’s not just Weinstein. Fox Searchlight, which has had massive success, including winning Best Picture two years in a row with New Regency, has often run into this problem. Calvary, Belle, Dom Hemingway, I Origins, and The Drop did $26 million domestic between them last year, $20m+ of it from 2 of the films. But strong, interesting choices. Good movies. A couple of great movies. And… meh. Profit against cost, etc, etc, they may have done okay. But that group of films should have done better. Searchlight isn’t dumb in the spring and smart in the fall. They are always smart and always well intended. Just didn’t get there.

There is nothing easy in the distribution game, except Batman. And while opportunity has expanded, the business is harder than ever. Searchlight doesn’t have the day-n-date VOD option. Weinstein/Radius does. But knowing when to use that tool and when to spend on the marketing required for real theatrical success, etc, etc, etc… all challenging. For companies whose average films are going to gross $2-5 million, a theatrical marketing budget is not a light decision.

Sony Classics, perhaps, lives in the middle of this more than any other distributor. Because of being a part of Sony, they don’t have the day-n-date option either. But they have a lot of “smaller” films with smaller expectations, some of which break out. $17 million with maybe a couple more million coming for Still Alice is a happy surprise. In the nearly 4 years since Midnight in Paris, the company has had only had 6 films go double-digits in millions. Three were Woody Allen. Two were Best Picture nominees this year. And most recently, Still Alice. But SPC has had many successful releases in that period. Of 61 releases since Paris, only 11 have grossed less than $500k in the US. Those are very strong numbers in today’s indie market. In IFC’s last 61 releases (including Boyhood), they’ve only had 11 of those films gross over $350k domestic theatrical. (Different model, but that’s my point.)

Even A24, which has been killing it, with 13 of their 15 releases in their first 2 years grossing at least $1 million, has had only one film gross over $7 million (Spring Breakers) and their other bigger grossers (A Most Violent Year, The Spectacular Now, The Bling Ring) feel like they left a lot of money on the theatrical table.

Anyway… I don’t come to piss on Radius or even VOD. But it’s time for some big rethinking… again. And theatrical should be a part of that re-think.

Friday Estimates by InKladiant

Saturday, March 21st, 2015

Friday Estimates 2015-03-21 at 8.50.34 AM