The Hot Blog Archive for May, 2018

4-Day Estimates

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Weekend Estimates by Underwhelmed But Unhysterical

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The vortex of Solo box office disappointment is hard to escape. Many of the theories being floated are surely true… but not in all-caps. As with so much these days, every fact is an excuse to spin one’s broader, and often irrelevant belief into a bigger picture.

My sense is that theatrical is not only healthy, but an increasingly critical piece of the financial puzzle for studios as we move into a post-theatrical world of endless content available on demand at all times for relatively small amounts of money via subscription (which will just be an expansive version of cable when we look back at it in 2030.)

Others—most media—are committed to the theatrical sky falling because of the tyranny of The New. So take it all in with thought and perspective.

I was right there at the beginning, going at the inevitability of Disney screwing up the Star Wars brand with too many films and not enough invention. So I should be celebrating the non-$100m opening. I am still vocal about the mistake they made firing Lord & Miller. I should be jumping on Solo’s grave. But I am not doing either. Because doing so is stupid and thoughtless.

Deadpool 2 is over $200m domestic in 10 days and about 15% behind the original phenom. Boo-hoo. They will only make a fortune instead of a fortune and a bit. Losers!

Maybe the media was too busy celebrating Netflix being overvalued to the point of insanity, carrying hhree years worth of gross earnings in debt, but still positioned by Wall Street to be the AOL of the era.

And again… I love Netflix. They are very, very smart. The value is glorious. They have been a force that benefits consumers from the start, whatever the actual disposition of Netflix. But the stock valuation is insane. And that is dangerous because at some point, it will cost a lot of jobs, likely starting with Fox.

Happy Memorial Day!

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Friday Estimates by So Low Klady

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So yeah… not the expected number for Solo.

What does it mean?  It means you can’t let the brand sell itself.

The reaction from veteran marketers is fearful, but you that doesn’t really account for the fact that brands are being sold in much greater quantity, at a much greater pace, than ever before.

And people have short memories.

Remember when DreamWorks Animation went to three films a year? It lasted one year. Ancient history? 2014.

And you have to wonder, why would Disney break their own rhythm by putting a Star Wars film in summer and none at Christmas until 2019?

With this question, the question about Solo… why did Kathy Kennedy take the idea of breaking from the trilogies as well as scuttle it by firing the filmmakers who were hired to break from tradition? Will she ever admit that this was a mistake? Because what she got was neither fish nor fowl… and it shows in every bit of marketing.

The greatest irony is that Disney is the home of Marvel, where this code has been cracked to greater success than anywhere else. The lesson in how well Thor built to Infinity War and how Ant-Man and Doctor Strange were pure standalones that brought their own value before the characters were integrated into the bigger structure is very significant.

When I see a Larry Kasdan interview taking about Solo being off the traditional Star Wars timeline, first I say, “bullshit.” Then I ask, “If it’s off the timeline, how come it’s so boring?”

Rogue One should have been be,used as a one-off, but instead, LucasFilm took a terrible lesson from it.

(Spoilers for Solo coming!!!)

You don’t have to kill off everyone who doesn’t land in the trilogy timeline!!! The gag works once. Then move along!

Spoilers Over

If they wanted to do Young Han Solo, we should have seen the relationship whe these two were kids. If you wanted to make what the audience wanted, where were Jabba and Boba Fett?

Solo is no disaster, artistically or commercially. But it is an example of fear-based filmmaking at the highest level. And those wrong choices have met strong (come on, people… don’t lose your mind over expectations), but underwhelming box office.

And Deadpool 2, which was 100% committed to its foundation, should have moved up a week when Avengers did. Solo is making this weekend sad.

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Weekend Estimates by Deadklad 2

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Deadpool 2 is the biggest not-first-weekend-of-May May opening. Ever.

The previous top in this category was Shrek 3, which was part of the Triple Trilogy summer of 2007, which also owns the Memorial Day record with Pirates 3 at $115 million, which gives Solo a target for next weekend.

That summer, 11 years ago, inspired a lot of the Chicken Little-ing we’re getting about theatrical these days. It turned out that 2007 was the first $4 billion summer, which has led to $4 billion every summer since (except last summer). Similarly, 2007 came the year after 2006 failed to match the then all-time high summer of 2004… thus, the falling sky.

And even if Solo is soft next weekend, it will surely best $100m, making this only the second summer in history to have three $100m+ openings by the end of May. (Yes, I am counting Avengers.)

But keep obsessing on Netflix’s claim of 80 “movies” this year. That must be the important story in film this year. Now quick… name a Netflix movie that came out this year.

Did it take you 5 seconds? 10 seconds? Have you come up with a title?

I love Netflix. I am happy they are spending. I am glad to watch their films. But they are not important to the current or future theatrical business at this time. They have raised some of the prices for films at festivals, which makes festival buying less attractive for indies, but that’s a blip. Five years ago, there were other market forces. Remember, Hamlet 2 happened without streaming.

Anyway… Deadpool 2 is fine. Paramount has to be underwhelmed by Book Club’s launch. I think it and Life of the Party suffered from being back-to-back and seeming so niched as being about older women getting their grooves back. Both needed another marketing gear. And nice per-screen on 4 for First Reformed.

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Friday Estimates by The Royal Wedded Klady

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BYOP: DEADPOOL 2

af0212_pubstill_01_R – Ryan Reynolds stars as Deadpool in Twentieth Century Fox’s DEADPOOL 2. Photo Credit: Courtesy Twentieth Century Fox.

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BYOB: Solo Spoiler

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BYOB: Solo Non-Spoiler

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Weekend Estimates by 3-Weekend Klady

Weekend Estimates 2018-05-13 at 11.48.57 AM

I still don’t have much to say about the weekend.

Avengers: Infinity War is a big, fat hit… as it must be.

Opening the second weekend of May is, as it has long been, fraught. Last year, it was $19.5m and $15.4m million for Snatched and King Arthur, respectively… almost exactly what the 2 new wide openers launched to this weekend.

There have been bigger openings in this slot. Neighbors opened to $49 million. The Great Gatsby opened to $50 million. Dark Shadows to $30 million. Bridesmaids to $26m. Robin Hood to $36m. And the first Star Trek reboot opened to $75 million a decade ago.

Who knew, when Tammy got slapped for opening to $21.6 million in the summer of 2014, that it would be on the high end of WB comedy opens from then on. Only Get Hard and Central Intelligence, out of 19 comedy releases by WB since Tammy, opened better. Those films were 3 and 2 years ago. And specifically, Life of the Party is the best WB comedy opening since Central Intelligence since June 2016.

None of this makes this opening look heroic. But context matters. And somehow, one gets the feeling that this same film opened by Universal would have launched in the high 20s. WB still opens certain films well. But comedy is hit or miss.

Warners has opened 23 movies to $30 million or more in the last 4 years (out of 92 total releases). The 3 Conjuring Universe movies were the cheapest. As mentioned before, 2 comedies. 5 were DC movies. 8 were reboots or existing franchise sequels (It, Godzilla, Kong, Hobbit, Fantastic Beasts, Mad Max, Tarzan, Blade Runner) 2 were The Rock (San Andreas/Rampage). Plus The Veteran 3: Sully, Ready Player One, and Dunkirk.

This is out of 92 WB releases in these last 4 years. For perspective, Universal has has 25 $30m launches out of 69 total releases in the same 4 years. Fox hit $30m opens on 22 of 63 releases. Sony has gone 11 of 81 in the last 4 years, which is the real reason Amy Pascal lost her job, no matter how many stolen e-mails Ben Fritz wants to analyze. (If you think I am blaming Ms. Pascal for what Tom Rothman has done, she was 6 of 34 in this category when you go back another 2 years, to 2012. So, Summer 2014 – 2018, 14%. 2012 – 2014, 18%. And now that you are playing with that stat, the Summer 2014 – Summer 2018 stat for WB is 25% and U is 36%. Of course, Disney is at a stoopid 64%. And Paramount comes in at a round 20%.)

The opening, in context, for Life of the Party is okay. McCarthy/Falcone is, when budget is in check, still a good bet. If I were them, I would set a deal at one studio where they feel great about a specific marketer who gets them and give up a few bucks to make a permanent home work. Their next film together is scheduled for WB in late 2019. The entire studio may be flipped by then.

Breaking In is from Universal’s new second favorite producer, Will Packer, who delivered this on a #1 Son (Blumhouse) budget. As such, good opening. Packer flipped between thrillers and comedies for Sony/Screen Gems for years. This was a start on the Universal future. Not the brightest launch… but okay. The studio has two films a year with him for the next while.

Holds, overall, were good. RBG expanded from 34 theaters to 180 and did $6,060 per screen and $1.1 million for the weekend. The per-screen king of indie was Magnolia’s brilliant doc, Sara Driver’s Boom for Real, charting the rise of Basquiat with great footage from the era and real insight not only in the artist, but the New York art scene of the 80s. It’s only on 1 screen and that would be in downtown New York City. So this makes sense. But the movie is a treat for anyone interested in the last great art scene.

Close by is Roadside’s Beast, a modern, non-singing version of the classic Beauty tale. Right on its per-screen heels is a period location-heavy version of The Seqgull, starring Saoirse Ronan and Annette Bening, which by some count would be a better opening, given that it is on 50% more screens (even if that’s just two in this case).

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Friday Estimates by Klady of the Party

Friday Estimates 2018-05-12 at 10.27.37 AM

Not a lot to say… and my wife has us going on a long drive to see family in a few minutes…

Anyone sad that Avengers: Infinity War got to $500m domestic faster than Black Panther is, well, an idiot.

The Black Panther number is more impressive and will remain so no matter what any Avengers movies do. I don’t think it proved anything about people seeing movies starring and directed by people of color; I never believed this was an issue anyway. But the whole media narrative about young people (who tend to consider color an issue a lot less than we old folks) not going to see movies and white people not seeing people of color in movies and international being more racist than America at the box office—and still is, though year by year will become less so—turns a true phenom of a movie into a simplified talking point.

Meanwhile, we are waiting for a “woman with a gun and a R rating” movie to become a big hit. (I wouldn’t be surprised if Jennifer Garner’s film blows up). None of this means that I don’t think people of color and women get the shitty end of the Hollywood lollipop, yesterday, today and tomorrows to come. When big object lessons come, the way to progress is to use them to make small objects move in an aggressive way, because all hype shall pass. That, and enjoy the wins fully and don’t get tied to the parts on which you don’t have a factual handle.

Moonlight‘s $37 million international is as big a milestone as Black Panther… probably bigger. The people who move the bar are the people who just do their work. And if Barry Jenkins and Jordan Peele and Ryan Coogler take a commercial step backwards on their next films, celebrate that too… because that is what white men have done forever. And then wait for the film after that. Or the one after that. And embrace and support the success of that work because it will come because of their skills and hard work, not because of or in spite of the color of their skin. And also support choices like Coogler handing Creed 2 to another generation of filmmakers of color. Success begets success. Celebrate opportunity, not just the best results.

In counterprogramming, Melissa McCarthy should not be in the second weekend of May. Bad date. Life of the Party isn’t Bridesmaids and WB doesn’t open comedies the way Universal does. WB opens many successfully… just differently. And a big-head-poster kind of movie needs more space that this. Still, Melissa is a 3.5x – 4x opening kind of star, so WB may survive the misstep.

Breaking In is the kind of movie that makes many people wonder where the ads were. I’m sure Universal worked the traditional windows. But the studio has also not opened a black-facing “Screen Gems” movie in a long time. And this one is under-opening that market by a bit. Unlike Melissa McCarthy comedies, the vast majority of films like this, thrillers that market to the audience of color above all else, don’t tend to have long legs. Universal has had enormous success with the Blumhouse movies, which often lean into race… but ultimately, they are more horror than thriller (even the thrillers, like The Purge series). And one wonders if there was more left to be mined, in this case, in the Gabrielle Union lean towards women than the market of color. It also sucked for this film that Melissa McCarthy was also on the date because women who might well have tried this film out this weekend are off laughing with McCarthy.

Movie marketing is a broad science… and a narrow art form. Still fascinating after all these years. And never forget – all together, folks – opening weekend has nothing to do with the movie. It’s all about the marketing and publicity in 95% of cases. It’s not about what you sell, it’s about how you sell it. It will be about the movie itself soon enough.

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BYO Your Summer Favorite Movies

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Weekend Estimates by OverKlady

Weekend Estimates 2018-05-06 at 11.04.36 AM

What can one say?

Avengers: Infinity War isn’t the biggest anything.

The media has become sick with its endless need for everything to be a horse race. Ten days into its run, Infinity War is the fifteenth highest grossing film ever, both domestically and worldwide. It’s a massive success, supported by many other massive successes. We are now in the stage of the film’s theatrical life that will be driven by consumer word-of-mouth and as the best of the three or four Avengers films (I count Civil War), it should be strong for at least the next month.

Another sickness is “reporting” on box office from the perspective of an inflexible agenda.

Have you read any stories about how IP has taken over Hollywood? (Rhetorical question… these stories are unavoidable and relentless.)

And have you read any stories this year about the uptick in successful originals? No?!?! Really?!?! Surprise.

Analysis of this gets sticky. But if one is to be fair, the changes are obvious. (I hate year-vs-year comparisons seeking to make broad comments about how the industry is changing. Four years is about the minimum for me. But I am speaking to how media is covering all this and it is, at its conceptual core, stupid.)

These stats are all based on the year to May 5 and with domestic grosses over $40 million.

2017 Sequels – 9
2018 Sequels – 5

2017 Non-Sequel IP Films (inc Blumhouse & Tyler Perry) – 5
2018 Non-Sequel IP Films – 6

2017 Originals (inc Blumhouse/TP) – 5
2018 Originals – 9

2017 Productions Over $100m – 10
2018 Productions Over $100m – 6 (with Tomb Raider claiming under… make it 7 if you don’t buy that)

2017 Gross As Of May 5 (roughly) – $2.45b
2018 Gross As Of May 5 – $2.54b

That’s about a 4% bump from this time last year. The overall year, according to Mojo, is 5.5%. So there must be some uptick below my $40m domestic Mendoza line as well.

So where are the news stories about how this year is kicking ass and doing it with fewer sequels and less IP? Brooks? Pam? Brent? Anthony? Ben?

There is a real chance that 2018 will be the first $12 billion year at the domestic box office.

How will the media explain that theatrical is dead at the end of this year?

Yes, the tide towards a majority of big films being all-IP, all-the-time is coming. It’s summer. This summer offers 12 sequels and 4 reboots/spin-offs/whatever, plus Teen Titans Go. But there are more than 22 (I don’t believe everything saying it will open wide will open) originals opening wide this summer.

The biggest titles are going to be the sequels. No question. But the majority – even in the summer – will be originals. And of those, only Skyscraper is a big-budget, franchise-launching effort.

Next weekend, two major studios release two non-IP movies wide, Breaking in and Life of the Party. Avengers will win for the third weekend in a row. But both newcomers should open in the 20s, based on the history of the talent. I understand that this isn’t what film writers are looking for… they want shiny objects that draw lazy “wow” hits. But these writers are creating a falsehood when they minimize mid-range movie success in favor of endless coverage of the mega-movies (rarely mentioning their mega-price tags) while claiming that there is no mid-range business anymore. Just because they refuse to cover the profitable middle does not mean that it doesn’t exist and that it is not a key part of the annual profitability of every studio except Disney.

And I will tell you what… when the Disney backlash comes – and it will – that will be bullshit too.

Theatrical is a mature business. It isn’t an ocean. It is a lake. Lakes have waves, too. But they tend to be a lot less volatile. And I know, volatile is where the fun is.

We are in stupid times.

Netflix’s market cap is $140 billion. Paramount (aka Viacom B) is $12.5 billion.

Objectively, in the long view, Paramount’s assets today are worth more than Netflix’s actual assets. But the stock market values Netflix at more than ten times what it values Paramount.

Why? Because Netflix has a stable revenue stream and the market fantasizes growth in the future. Paramount has been treading water as a studio for a decade-plus and has been unsuccessful in creating a path to its own future.

If you value a major studio’s library (inc Paramount TV. Nickelodeon, etc.) at $400 million a year for a streaming company to lease, Paramount’s current stock value is just over 30 years of leasing.

Why aren’t Netflix or Sony fighting to purchase bargain-basement Paramount before it reunites with CBS, where it will become viable competition? Because they are missing the value.

Netflix is not actually in the film business and reiterated this through its CEO this week, who signaled that they were getting out of the Cannes business forever. They don’t need Paramount. They don’t need the headache of owning and operating an actual movie studio. At least, they don’t need it right now. They are focused on creating their own content. And what no one wants to say out loud is that the further down that path they go, the more they are susceptible to the slings and arrows of every other content-driven business in the market… and the more easily the current library-heavy companies will be able to compete.

Sony? They want to sell their entertainment side and might be shy about potential regulatory limitations created by the gonzo Trump administration that would embarrass them and limit their ability to compete freely in the U.S. market.

By the way, the Fox film and TV market cap is half of Netflix’s. Insane. But Disney is not getting ripped off, buying most of Fox. This deal works for both sides (aside from the laid-off workers).

CBS/Paramount’s market cap will be in the low 30s when they are finally put back together. But I would expect Les Moonves to double that in less than five years by mining the value that exist, ignoring the ones that have lost their weight, and going hard after Netflix and DisneyOTT (and Hulu and Amazon) immediately. Moonves has already learned lessons from the mediocrity that CBS’s OTT is. He knows that you can’t sell people what they already have for free and ask for them to pay for it.

Theatrical is a healthy business that should be supported and upgraded wherever and whenever possible.

OTT is a business in its infancy and will be the norm for home entertainment for decades to come.

There is nothing incompatible about these ideas.

Everyone is obsessed by Disney, which has an amazing situation that no one can recreate.

But Universal is the studio that should be examined.

Universal has released 71 films in the last four years and all four of those years have been among the five most profitable years in the studio’s history.

Here is how the domestic grosses break down by category…

IP/Non-Animated Sequels (15) – $2.42 billion
Animation (4) – $1.2 billion
Horror (18) – $1.14 billion
Comedy (18) – $1.2 billion
Drama (16) – $680 million

So, the obvious questions:

1. Why doesn’t Universal make more animation when they can’t seem to miss?

Answer: Because the limited output has something to do with the success. Only 19 animated films have ever topped $260 million domestic. Universal’s last four Illumination films are four of them and Despicable 2 is their fifth. Pixar has seven. Disney has four. And DreamWorks has three. Universal acquired DreamWorks Animation (now, just “DreamWorks”) and so they have eight titles and Disney has 11.

History has shown that Pixar at one film a year is optimal. Same for every other animation studio. Expansion undeniably thins the quality of the output and in animation, which is the leggiest of the genres and thus, most reliant on word-of-mouth and repeat business, quality (as defined by the audience, not critics) matters a lot.

2. Why not make more IP-driven product and sequels, though the track record is not nearly as strong as animation?

Answer: Because it is also a unique challenge.

2 Fast & Furiouses
5 Curtain Droppers: 2 Pitch Perfects, 3 Fifty Shades
2 Sequels That Probably Dead-Ended: Ted, Snow White
2 Sequels On Life Support: Jason Bourne, Pacific Rim
1 Smash Hit Relaunch: Jurassic World
1 Disastrous Relaunch: The Mummy
1 Output Deal: The Great Wall
1 International-Only Hit: Warcraft

So where to go from here with these films?

Fast & Furious and Jurassic are on the high shelf with animation.

The Universal Monster re-launch ends… again… the second failure to launch in the last 15 years. When will they try again?

There will be some kind of 50 Shades spin-off. Jason Bourne might be over… maybe they will try again. Pac Rim is an issue of Legendary, where they have a lot of issues.

Not a lot there. If you look at the current upcoming schedule for the studio, it’s a F&F film for three years straight (2019-21), four animated sequels in 2020, an attempt to launch a Pokemon franchise next year, and lots and lots of comedy and horror (at least five a year from Blumhouse and on the comedy side, Will Packer, in 2019 and 2020). There are FOUR untitled Universal event films in 2020.

3. Will they ever make a drama again?

Answer: I’m sure.

Yes, dramas make less money for the studio than more “marketable” movies and the biggest worldwide grossing drama in these last three years (Straight Outta Compton) “only” grossed $202 million. But that film was also a lot more profitable for Universal than Jason Bourne, which grossed twice as much.

If you want to make $70 million dramas, you are kinda screwed… even at Netflix. There is no one in that business right now.

Then again… no idea what the budget on First Man is. But I bet it is too high to make Universal execs comfortable. They may end up with a win anyway, but the 23 years since Apollo 13 did $355 million worldwide is a long time. And Universal is also betting on Bob Zemeckis for a drama based on 2010 documentary Marwencol, which is a great thing to do, but no lock at the box office. Those are on the slate for this year. What they mean for years moving forward…?

Everything is off the central examination of the weekend’s box office. But there wasn’t much worth saying about it. Overboard did better than should have been expected… still, meh. Focus couldn’t figure out how to sell Tully, even though they really liked the film. Just not a very interesting weekend.

Happy Seis de Mayo!!!

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Friday Estimates by Thanos Jr Klady

Friday Estimatres 2018-05-05 at 8.58.08 AM

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The Hot Blog

Quote Unquotesee all »

“Ten years ago at Telluride, I said on a panel that theatrical distribution was dying. It seemed obvious to me. I was surprised how many in the audience violently objected: ‘People will always want to go to the movies!’ That’s true, but it’s also true that theatrical cinema as we once knew it has died. Theatrical cinema is now Event Cinema, just as theatrical plays and musical performances are Events. No one just goes to a movie. It’s a planned occasion. Four types of Event Cinema remain.
1. Spectacle (IMAX-style blockbusters)
2. Family (cartoon like features)
3. Horror (teen-driven), and
4. Film Club (formerly arthouse but now anything serious).

There are isolated pockets like black cinema, romcom, girl’s-night-out, seniors, teen gross-outs, but it’s primarily those four. Everything else is TV. Now I have to go back to episode five of ‘Looming Tower.'”
~ Paul Schrader

“Because of my relative candor on Twitter regarding why I quit my day job, my DMs have overflowed with similar stories from colleagues around the globe. These peeks behind the curtains of film festivals, venues, distributors and funding bodies weren’t pretty. Certain dismal patterns recurred (and resonated): Boards who don’t engage with or even understand their organization’s artistic mission and are insensitive to the diverse neighborhood in which their organization’s venue is located; incompetent founders and/or presidents who create only obstacles, never solutions; unduly empowered, Trumpian bean counters who chip away at the taste and experiences that make organizations’ cultural offerings special; expensive PR teams that don’t bring to the table a bare-minimum familiarity with the rich subcultural art form they’re half-heartedly peddling as “product”; nonprofit arts organizations for whom art now ranks as a distant-second goal behind profit.”
~ Eric Allen Hatch