Box Office Archive for March, 2010

Trying To Write Off Windows Again… Smart & Completely Wrong, All In One

Edward Jay Epstein is an interesting character. He writes with authority about the subject of the the business of Hollywood and is often much smarter about digging into the details of it all. And he is, often, lost in a fog of misleading, retro, inaccurate theory.
The latest is a new book, “The Hollywood Economist: The Reality Behind the Movie Business,” which I have not read. I feel I will eventually have to… and I am likely to face hours of eye-rolling and the frustration of deciding whether to deconstruct the guy’ work or not.
In any case, the first glimpse is offered on The Wrap, in an interview that is part dead on and part “huh?.”
For instance – “In 2005 , around when the (last) book went to print, studios looked at DVD sales and they extrapolated about future revenue and made decisions based on those extrapolations. Well it fell apart, the independent movie business collapsed, broadband expanded, creating new ways of delivering movies. Studios have cut back on production and development. They’ve entered the second phase of this digital revolution, which is nowhere near over.”
He is right about the studios projecting and losing. But this is not actually at the core of why Dependents were shuttered or why internet delivery started to become realistic. Cutting back on production and development costs does have something to do with DVD revenues, but has absolutely nothing to do with the “digital revolution.”
Or he tries to devalue the uptick in box office over the last number of years – “Revenue from the box office rose four or five percent, but you have to remember that there was a big ticket price increase. It was also a bad economy and audiences usually spike then.”
Perhaps he’s just simplifying for an interview, but ticket prices actually went up – according to the iffy NATO numbers – about 3%… as they do most years. And the box office revenue went up more.
On the other hand, I agree with what he seems to want to say about 3D not being some nirvana for the industry. The problem – and this is often my problem with this guy – is that he wants to pretend there is AN ANSWER… and that is the lie of this industry… which ironically, he poo-poos earlier… that the industry has convinced Wall Street that this is a consistent business.
That said, Wall Street is also getting a simplistic, inaccurate rap. The stock market has not been particularly friendly to Hollywood. Analysts are neither terribly well educated about the business nor are they generous to the industry… and the lack of movement in stock prices shows that.
Hollywood Suits would like to create an industry that is trendless, on the financial side. No risk… consistent reward. This brings me to my big beef with Epstein…
All this windows talk makes less sense today. I think that [Walt Disney CEO] Bob Iger and [Time Warner CEO] Jeff Bewkes understand this. If you’ve got a movie like “Avatar,” maybe you want to hold off on when it comes out on DVD so you can milk all the money out of theaters. For smaller films, like “The White Ribbon,” that’s only playing in three cities, why not release it simultaneously on television or DVD? Now with issues with piracy it becomes even less coherent. People don’t want to necessarily buy pirated content, they just are in a hurry to see a movie. The studios have warehouses filled with DVDs of movies they’re shipping to theaters, so why not release them quicker?
First… it’s kinda funny that he isn’t aware enough of the current business to know that Fox is not milking Avatar theatrically, throwing away $10m to $20m in box office by releasing the film on DVD in a couple of weeks. The same is true with The Blind Side, which I believe landed today.
On the other hand, Fox will probably try to come back into the theatrical marketplace – the revenues from which will wildly outsize the post-theatricals, as Titanic‘s did – to mine more money in 3D this summer or early fall before firing up another version of the DVD package, which will be followed at some point by a 3D release.
But I digress…
This is not a new phenomenon for the studios. The already-shorter theatrical windows probably cost each major studios $100 million or more in box office gross every single year for the last five years or so. The payoff in the past was that DVD revenues were so massive that getting to them was a key strategic choice… throw $10 million in revenues away to rush to $200 million.
The “digital revolution” that Epstein is so hungry for, ironically, is two steps forward to go five steps back. The “must move forward” attitude is not only wrongheaded, but it is, I believe, extremely dangerous to the industry. On the level of making the industry “safe,” it’s great… lower all the risk, lower all the reward, and turn movies into widgets. That’s where we are heading in IgerLand.
The fact is, only a very narrow group of moviegoers are “in a hurry to see a movie.” And the people who are in a hurry are – taa dah!!! – the most significant group that go to movies on opening weekends. And as we can see at the box office, they are going. They are going in large numbers. And as the DVD sell-thru business has stabilized, maturing naturally into being less of a massive cash cow than it once was, they are buying, renting, and downloading in the Home Entertainment window as well.
But the biggest problem with Epstein’s mentality, clearly sold to him by the studio execs who are obsessively pushing forward for a windowless world, no matter how the numbers actually break, is that he has bought into the idea that the one area that, as we move forward, has real upside… and some risk… Theatrical… is a problem or irrelevant.
Price Point… which is now only showing flexibility in theatrical… and Saturation, meaning we are now at he point where the amount of content is making each piece of new content something quite different than it was 10 years ago or even 5 years ago… are the two areas of absolute blindness amongst those with their whip hands pushing shorter windows forward.
What scares me is that it is all being done incrementally. None of these guys has the true courage of his convictions. And when the incrementalism continues and windows continue to shrink, really understanding how much it is costing the average studio release will be very, very hard to analyze. But these businessmen don’t really give a good g.d. about movies. They want to be Wall Street heroes. And as they continue to erode the film business from the inside, from the highest levels, there will be no going back.
There is only one window in the new era. Theatrical – WINDOW – Post-Theatrical. Period.
Eliminate the window and by 2015, studios will be subsidizing theatrical… not because there was ever a loss in demand for theatrical… but because they will have killed off a significant percentage of their revenues.
As we learned in the Big DVD paradigm, the cost of marketing will get bigger, not smaller, as the ability to differentiate gets harder.
If an “average” (no such thing) $100 million domestic grosser nets $250m – $300m in revenues before costs start coming out in 2010, with about 50 million people paying to see the individual film in one form or the other within the first year, I see this world of “digital revolution” creating 70 million people paying to see the same film in the first year… with a net of under $200m.
The main principle I see behind the fantasy that it will be otherwise is that, somehow, digital home delivery is going to replace or improve on DVD cash flow. But again… Price Point.
It’s pretty basic. You are all consumers out there. Are you paying more or less or the the same for Home Entertainment content in 2010?
How much will you pay to watch something on your iPhone/ITouch/iPad?
If you love Disney, the answer is mostly “zero,” because the same guys who are pushingpusingpushing to shorten the window are still using free downloads as bait for selling DVDs at – taa dah!!! again – a higher price point. And they are right to be doing that. They have to.
But where they lose me is the leap to the idea that at some tipping point, consumers will be willing to pay premium prices for convenient, but inferior delivery systems.
Look… I believe that we are headed to a very different model that what we have now, in which all post-theatrical is sold under wide-reaching flat rate deals on a monthly or annual basis, studio by studio or group by group. This may include using shortened post-theatrical delivery windows as bait. It will probably include choices about how much advertising we see when receiving the content.
But the theatrical window is the ONLY way to differentiate between what we now think of as Movies and what we now think of as Television. The theatrical window is the ONLY way to maintain the notion that there is financial upside to pushing the medium. There is no Avatar without a theatrical window. There is no Pirates 4 without a theatrical window.
On the other hand, there is a Hurt Locker and a Blind Side without a theatrical window.
And some would say, “God bless,” to that notion… a return to the 50s… or the 70s, if you will.
But the problem I envision is that it won’t take long for the process to become about how few new films, how few new TV shows, how little new product the distribution companies can produce and still keep their audiences interested enough to pay the monthly bill. This will, of course, inevitably lead to some “special events.” But it will also lead to a further narrowing of the marketplace, a further indulgence of brand laziness (Blind Sided AGAIN!… Chinatown Pie! “Forget the offensive line, Jake… just put your penis in there… it’s Chinatown Pie!”)
It leads to the lowest common denominator because it continues to disincentivize quality in favor of brand value. And then, The Hurt Locker will have no theatrical buyer – instead of one this time – and because of less revenue from non-theatrical windows, will not be able to muster even its $11m budget. Sure… if it gets made, somehow, it will get picked up to be on the HBO on steroids that Time-Warner will probably have. But it will be just another buy to fill the 360 hours a week of programing they need to fill.
But more realistically, there is no Hurt Locker. Not from a veteran filmmaker. Not even for $11 million.
Of course, Disney wants to lead… they are the most branded major studio in the world… perhaps the only branded studio left. If you don’t want to be in the movie business, don’t be in the movie business. And due respect to Sean Bailey, Disney is getting out of the movie business, aside from the service side and using it to increase the number of brands they have, to a great extent.
Fine.
So that’s who the industry, which is not trying to get out of the film business – well, they are running from funding production like their hair is on fire- and that doesn’t have the brand build-out that Disney starts with, is going to follow?
Insanity.
Didn’t we go through this cycle before at Paramount, when the MTV and Nickolodeon brands were going to lead Viacom’s way into the future?
While the Clevers were giddily applauding the demise of the arty Dependents, did they forget that Fox Atomic and Rogue – genre divisions – bit the dust as well and that Lionsgate is still a company worth too much and too little at the same time?
Exhausting.
Edward Jay Epstein just got caught in the crossfire for towing the line. He wasn’t the first. He won’t be the last. Sorry, Ed.
But hey… I’m in Bermuda… relaxing… I’ll just try to let this all sink in before I rant again…

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Weekend Estimates by Klady – 3/21/10

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Weekend Box Office

11:26a add…
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It will show up soon enough…
But I wanted to point out the absurdity of suggesting that a $20m+ opening for The Bounty Hunter is “embarrassing.”
It will easily be Jennifer Aniston’s biggest opening without a major male opener (or a dog… same diff’) by her side and is also a solid number for Gerry Butler, trumped in a comedy only by a mid-summer opening for The Ugly Truth.
This thing where we take expectations – primarily based on notoriously poorly done tracking for kids movies – and then turn a perfectly good number into an “embarrassment” by specious comparison is galling. Wimpy Kid performing above silly-low expectations while Bounty comes in right in the range of expectations is no real surprise, much less something for Aniston or Butler’s agents to worry about.
grow up.

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Avatar Math

Bloomberg did a story about the dollar distribution on Avatar today… so it got me mathing…
2.75 billion worldwide gross (could be more)
$1.5 billion in rentals come back
$275 million off the top for Fox distribution
$310 million production
$200 P&A
$300 million to Jim Cameron
$415 left over… $249m to funding partners, $166m to Fox
DVD is unusual in a situation like this, in which the DVD sales numbers can’t really be expected to come close to the theatrical numbers. Gross in sales should be no more than $300 million… probably less. That would be a now-massive 17.5 million units sold with record-breaking sales on Blu-ray, raising the price per sale.
Let’s put net ancillaries at a generous $250m. I would guess at $75m to Cameron, leaving $105 million for the funding organizations and $70m for Fox.
That puts the pay out, based on these estimates, at very roughly:
$511 million for Fox
$375m for Jim Cameron
$354m for the 2 funding companies
You could take 10% off of these figures pretty easily. On the other hand, it could be made up for by the re-release of the film in 3D this summer. Could it do $200 million worldwide in re-release? Perhaps
Looking forward to the NYT story… $500 Million Movie Returns $500 Million In Profit To Fox… Even After Throwing Away 60%!!!
I guess what’s really astonishing is that a movie could gross over $3 billion in revenues and the net is “only” $1.2 billion. What’s not being counted here is some very happy theater owners.

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Weekend Box Office by Klady – Alice = 4 New Films + 50%

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Alice In Wonderland‘s 10-day gross is only $6 million behind Avatar‘s and also #2 to Avatar as the top 2nd weekend gross outside of the summer. Obviously, the comparisons are a bit stretchy because of the December holidays (for better and for worse) and because the Sunday number is still a pure estimate. In terms of spring numbers, it’s The Passion of The Christ that Alice is dueling with and is a little behind and falling a bit faster. Still, even dropping at 40% a week from here in, $400 million domestic is in the crosshairs. Could be a little higher… could be a little lower. Regardless, mighty impressive numbers.
And huzzahs again to the former regime at Disney, which tee’d this ball up before Rich Ross took over. There was no demonstrable change in the marketing focus… only more finished footage to add to spots.
The openers didn’t have a happy weekend. Not one is estimating 3x Friday estimates. And the worst estimate, Friday vs Weekend, is Remember Me, estimating less than 2.5x Friday. What this says to me is that the hardcore Twilightinas were there on Friday, voting Team Edward. The movie getting to $25m domestic would seem to be a fantasy at this point.
Searchlight continues to get Crazy Heart out there and I wouldn’t say their 7% rise is so much a function of Oscar this weekend as it is of continuing to find the real audience for this movie… a Searchlight specialty.
The Hurt Locker almost doubled last weekend’s gross… to $810,000. This kinda seals the deal on the domestic theatrical on this movie. And taking a look all the way back, it is the lowest grossing Best Picture winner since Marty in 1955, which apparently grossed about $7 million. Adjusted Grossers would put that number at $90 million or so in 2009 dollars. Obviously, the gross numbers get smaller and smaller as you work your way back to 1929. But if you were to used adjusted figures – and this may be one of those rare cases in which it might be appropriate – The Hurt Locker is the least successful theatrical release to win Best Picture in Oscar history.
And clearly, post-theatrical for The Hurt Locker will blow Marty away by many multiples, given that we now live in a universe of post-theatrical revenue opportunities that could not even be conceived back in 1955… just as theatrical was so much more expansive, when you look at tickets sold, back then.
Box Office Mojo, I feel compelled to repeat, has done a great disservice by running obviously incorrect numbers in terms of adjusted gross and ticket sales. They have been quoted everywhere because they are used as a resource. The site is an excellent resource… to any box office in the last decade or so of gathering actual hard stats. But they have no detail on grosses from any distance and allowing their guesstimated stats to be used as news is a shameful failure on their part. Someone could spend a lot of hours and get an accurate count on the ticket sales – or at least within 10% – of Gone With The Wind. But I don’t care that much. I only care that loose guesses not be presented as facts… a re-written history that we will be stuck with forever because people don’t challenge the veracity. This does not diminish GOTW’s position… not the point. The point is that facts are facts and guesses are guesses and we need to know the difference if at all possible. In this case, it is possible.
Anyway…

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Friday Estimates by Klady – Alice Takes In More Than The Four Newcomers Combined

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Wow. I don’t know whether to feel good for Disney of bad for everyone else.
Start with Green Zone, a movie that never seemed to be selling more than Matt Damon’s big head and a lot of fatigues and military chatter. I saw one or two ads that tried hard to make it seem like a Bourne spin-off. But mostly, pretty quiet until a wave of mostly good – a few virulently bad – reviews and… not much more.
i am sympathetic to the notion that “iraq movies” are still not good box office bait. But it seems to me – having not seen the film, the quality of which is irrelevant to the sell, but which needs to have the elements to sell – that there must have been more here. Maybe if you fear that you’re going to get Duplicity/State of Play opening numbers, you subconsciously will them into existence with the kind of focus you have – or don’t have – on the movie in question. After all, who wants to be disappointed again?
Remember Me, which is a pure “Come See The Vampire Hottie Have Sex” sell, is a good opening by Summit standards. It looks like it will compete to be Summit’s #2 opening for a non-Twilight film, pushing out Push and behind only the mainstream Nic Cage Blue Clues Actioner (Nic’s own category), Knowing. And it will likely outgross the entire domestic take of The Hurt Locker by next weekend. Mostly what it will do, as all studios must, is keep their franchise boy happy that the studio made an effort on his behalf.
For me, the big unhappy surprise of the weekend is She’s Out Of My League, a movie that seems to be universally well liked, but has no familiar names – we’ll see how Disney hides Jay Baruchel as The Sorcerer’s Apprentice behind Nic Cage this summer and Mike vogel’s alleged Captain America shot didn’t get any help this weekend – and a genre that is the odd one that always seems like it is going to do better than it does.
The last big example of a wannabe Risky film was The Girl Next Door, opening to $6m in 2004… which is about the equivalent of this opening in 2010. That film featured Elisha Cuthbert at the height of her hottieness and Emile Hirsch, whose star was still rising. Here, you have the spectacular-indeed Alice Eve and JB, who has a cult following and not even so much as a Jeffrey Jones or a Joey Pants as a known side-story entity.
Alice Eve, it seems, is one of those “thought I wrote about it” moments I sometimes get after doing this for so long. I seem to remember writing a ridiculously lavish comment on her presence in Stoppard’s Rock-n-Roll… something akin to seeing a Jessica Simpson or a pre-surgery Pam Anderson for the first time… but with some acting skills. I didn’t see Starter for Ten, but I was roped into its dinner party at Toronto that year and I remember a pretty girl, but not THAT. She has IT. The question will be whether filmmakers can figure out how to put it on screen. Girls like Ms. Eve always face the real possibility of ending up playing blow-up dolls in Hollywood films, which is, when someone actually does have more than The Body, a shame.
But as for the film itself – again, I am not back on a screening schedule yet and haven’t see the film – it seems that selling “the girl that boys want to sex” is just not a good theatrical business. Kelly Preston in Secret Admirer and Mischief… smoking… but neither film did $10m domestic…. which in 1985 wasn’t as strong as Moving Violations.
And Our Family Wedding is Searchlight’s most recent attempt to go Urban. I just had a surprising moment as I looked at Searchlight’s openings on BO Mojo and sorting the division’s history by opening, none of their big grossers opened wide. But even more interesting, almost all of their biggest openings are black-themed films. Of their Top 12 openers – #12 is $5.7 million – 7 are black-themed. The biggest opening for Searchlight in this group and in the Dependent’s history is Notorious, which opened to $20.5 million. If OFW opens to 7, it will be right in the middle of the pack for Searchlight “urban” openers. If it was Tyler Perry’s Our Family Wedding, it would be a disastrous number. But it’s not. It’s just an attempt to look like a TP film. So, perhaps disappointing, but likely in line with Searchlight’s internal expectations.
Shutter Island passes $100m. Cop Out is Kevin Smith’s biggest grosser ever and is still doing some business. Avatar passed $2.6 billion this last week. And sadly, a minor bump for The Hurt Locker off of its win last Sunday.

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Weekend Box Office by Klady Goes Down The Rabbit Hole

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As Friday foretold, Tim Burton’s Alice In Wonderland became the 14th $100 million opening. And I wouldn’t be remotely surprised if the weekend number ends up being a little higher than the estimates out there, not lower. This is a “family film” event and even in Los Angeles, there is plenty of time to load up those matinees before the adults settle into Oscar viewing.
The history of the mega-openers puts the final number between $234m and $533 million. The $30 million-plus leap over any other first quarter opening in history (previous leader, The Passion of The Christ) is significant. It is both well over the “3D ticket price bump” and enough to push studios further into 3D-mania… which remains, in my opinion, mania. Like IMAX, there are movies that make sense in the format and others that do not. Just being a spectacle will not stoke the imagination of the public about 3D, anymore than being on IMAX assures that people will get more excited about a film.
In many ways, Alice gets the massive, inherent benefit of its origins. It is not your traditional franchise launch. And interestingly, the choice not to make this the classic Alice origins story was dangerous… but the visuals overwhelm the storytelling concerns when it comes to opening a movie. It’s the first big visual feast since Avatar and that paid off.
In some ways, I would say that this opening is the opening that Charlie & The Chocolate Factory made possible. Meag-openings have become more standard in the years since 2005, but even more so, the legs on Charlie (almost 4x opening) suggested that there was some hesitance at first from parents of younger kids and that they decided Crazy-Looking Johnny and Creepy Uncle Tim were safe for the kids… and went in droves. This time, they just went for it.
Kudos to the Disney teams, the ones who are gone in the last few months and the ones still waiting to get a direct boss.
The Blind Side hits $250m. For all the whining, Cop Out is now Kevin Smith’s biggest film ever and has a chance of doubling his previous all-time high grosser, Zack & Miri… and will surely do that worldwide, where Bruce Willis should make Smith’s previous best overseas more than triple. Shutter Island will pass The Aviator as Scorsese’s #2 domestic grosser this week and has an outside shot of catching The Departed. If The Hurt Locker wins tonight, look for it to crack $15m at the domestic box office!!!

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Friday Estimates by The Mad Klady

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A remarkable number. A March record even if you take 20% off of the top for 3D. And matinees leading the way.
A marketing triumph for the fallen marketing regime at Disney… “Off With Their Heads!” That team put almost everything you have seen for the film in place… into design template… though, obviously, new materials have been cut as new footage has come in.
Critics generally are not fans of the film. But anyone who thinks that matters when you are looking at these kinds of numbers is tweedle-deeing their tweedle-dumb.
And for those playing at home, Avatar did take its second biggest Friday-to-Friday drop, the last one being the Friday after the holidays ended… which was not a surprise. Still, off 38% with a massive opening hitting the market and losing a lot of 3D screens is still a number Fox has to feel pretty good about. Sadly, they will have to wait to pass the $725 million domestic mark until next weekend. Sigh…
And what’s gotten into Overture Films, aside from the threat of being de-financed by Starz? They will have another solid opening this weekend with Brooklyn’s Finest, perhaps besting their Clooney movie to be their #4 opening ever… following on the heels of their #3 opening ever, The Crazies, just a couple of weekend ago. After years of trying to be Miramax, they seem to have come to understand that the money is in being Dimension. Good on them. Let’s hope, for the market’s sake, that McGurk finds his money now, following these two successful openings.
And another pretty good hold for Shutter Island, which has now switched its ad effort into “find out the secret of…” mode. (Note To People Who Haven’t Gone Yet: There is not girl with a penis. Perhaps the opposite. But you will have to see the movie and learn the secret of Shutter Island in order to know what the hell that means! Mwahhahahah!!!)

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Box Office

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“The word I have fallen in love with lately is ‘Hellenic.’ Greek in its mythology. So while everyone is skewing towards the YouTube generation, here we are making two-and-a-half-hour movies and trying to buck the system. It’s become clear to me that we are never going to be a perfect fit with Hollywood; we will always be the renegade Texans running around trying to stir the pot. Really it’s not provocation for the sake of being provocative, but trying to make something that people fall in love with and has staying power. I think people are going to remember Dragged Across Concrete and these other movies decades from now. I do not believe that they will remember some of the stuff that big Hollywood has put out in the last couple of years. You’ve got to look at the independent space to find the movies that have been really special recently. Even though I don’t share the same world-view as some of my colleagues, I certainly respect the hell out of their movies which are way more fascinating than the stuff coming out of the studio system.”
~ Dallas Sonnier

“My first objective relationship in life was with the camera. I didn’t understand anything but then I realized the camera is my friend. It doesn’t lie to me. It doesn’t manipulate me. It only reports what I’m doing. And therefore, for me to work with a camera and the camera to be directed by an artist, a craftsman, someone who knows what he or she wants, I couldn’t ask for anything more.”
~ Elliot Gould