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June 06, 2003

Blockbusters, Week 2

Friedrich --

Interesting article in today's WSJ by John Lippman, their new L.A. showbiz reporter, discussing the way blockbuster movies are more and more creatures of their very first weekend. Some excerpts:

It's no longer unusual ... for first-weekend box-office tallies to reach $60 million to $80 million ... But all that this may be adding up to is Hollywood's biggest mistake.

America's love affair at the movies is turning into a one-night stand. More and more of the money to be made in ticket sales is coming in the opening days of a movie's release. Increasingly by the second weekend, a movie has likely raked in half of its total box office, and is 75% spent by its third weekend. (Ten years ago a movie was only about half-spent in its first month of release.)

This quick-hit trend is actually eroding long-term box office. As fickle audiences shuttle on cue from one sci-fi epic to broad comedy to caper flick, many Hollywood insiders predict there will not be a movie this summer that is No.1 at the box office for two consecutive weekends -- the summer without a blockbuster.

"Films don't have legs anymore," says Paul Dergarabedian ... It's a trend that started in earnest last summer, he says, when ticket sales for some notable movies began to drop off precipitously...

This year, the drops are even more marked: "Daredevil," "X2: X-Men United" and "The Matrix Reloaded" all broke the 50% barrier ... Far from trying to stop the falloff, studios are starting to play to the fickle audience, 'blasting open' movies by booking as many as 8,000 screens at once at the multiplexes ...

One thing missing from Lippman's excellent piece is a little long-view perspective. Time for some Blowhards background! Back in our (ahem) moviestruck youth, it wasn't unusual for a movie to take weeks after its initial release to even get to smaller cities and towns. Hit movies often ran for months and months.

It was the sucess of "Jaws" in 1976 that changed all this. "Jaws" was the first big-budget studio pic to be marketed like exploitation pictures had sometimes been promoted, via the process known (if I remember right) as "four-walling" -- blitzing the airwaves with ads, renting tons of theaters, creating a gigantic stir. But the little exploitation pics were only able to do this on a city-by-city basis. With "Jaws," Universal blitzed the entire country at once.

On the subject of which, I realize from talking to young people that many of them seem to think that "the summer blockbuster" movie is a phenom that dates to the very birth of movies and may indeed be some kind of representation of the very nature of movies themselves. In fact, it started fairly recently -- with "Jaws." Hard to believe, but prior to "Jaws" there really wasn't anything like what we currently consider "summer movie season."

Dept. of Fun Coincidences: in another part of today's WSJ, there's a review of Connie Bruck's new biography of Lew Wasserman, the reclusive former head of MCA/Universal who died a few years ago, and the man behind much that annoys so many about the current moviegoing world -- including the summer blockbuster. (His company produced and released "Jaws.") A detail from the book: Wasserman seems to have been one of the few top Hollywood guys who never helped himself to heaps of starlets. A workaholic with little apparent personality aside from his ambition, he didn't seem to have much of a sex drive; he even slept apart from his wife. Ain't it pleasing to learn that in their marriage, she was the one notorious for having lots of liaisons. Ah, there is some justice in the world.

Feeling a little oldish today,


posted by Michael at June 6, 2003


I've noticed the trend as well, and therefore can't imagine how a company like Miramax does it. I mean, who would ever take a chance on "The English Patient" or "The Age of Innocence" or "Sense and Sensibility" if you've got one-weekend-and-one-weekend-only to make any money. And I can't believe investors are going to keep indulging the well-we-make-some-movies-for-prestige-and-some-for-profits mentality. But a movie like "Fried Green Tomatoes" or even "Shakespeare In Love" just isn't going to have the kind of juiced opening as "Matrix Reloaded"---word of mouth is these movies' best friend. And you can't get Julia Roberts or Tom Hanks for every movie. Well, I guess we can all be grateful for "My Big Fat Greek Wedding"----proves every "rule" is made to be broken. That certainly did not make over half its box office in the first weekend.

Posted by: annette on June 6, 2003 1:40 PM

I've noticed the trend as well and can't figure out how Miramax does it. Who would take the chance on "Sense and Sensibility" or "Shakespeare in Love" if you've got one weekend and one weekend only to make any money. The product has to be so simplistic and pre-sold that it's ridiculous, and I can't imagine that investors are going to forever indulge the we-make-some-movies-for-profit-and-some-for-prestige mentality.I guess we can all be grateful for "My Big Fat Greek Wedding"---proves every rule is there to be broken. It certainly did not make half its gross in the first weekend.

Posted by: annette on June 6, 2003 1:43 PM

Sorry---your system came back and told me my first post didn't take. Sorry---your system came back and told me my first post didn't take. :)

Posted by: annette on June 6, 2003 1:44 PM

Is the lack of films having "legs" a consequence of how they are marketed, or just because they don't really make that strong of a connection with the audience? "Spider Man" sure seemed to have "legs" and I think you could feel the audience connection while in the theater. If the issue is purely a marketing one, is the "yield curve" for films different in the Spring or the Fall, when marketing patterns are different (and competition less?).

One other question I've had for a long time. If most of a film's business is driven by ads and trailers, (I understand movie reviews only impact a movie that is actually in theaters at least six weeks) why don't they focus primarily on the ads and the trailers and test them out? I mean, in essence, from a business point of view, the ads and the trailers are the product, and yet it appears that studios invest most of their money on the movie itself. (I've sure seen some dog trailers and ads for some pretty expensive movies.) This is irrational; after all, if the film lasts at least 90 minutes, the studios probably won't have to refund anybody's money, so they are mis-investing their capital.

Posted by: Friedrich von Blowhard on June 6, 2003 3:09 PM

I think it's a lack of strong connection. Nothing I've seen this year is really that fresh, just yet. "Bruce Almighty" was just a riff on "Oh God!" The Matrix is a sequel, as is X2. And "Finding Nemo" isn't really that good, and it's a little too preachy/screechy on the handicap/overprotection theme. The last two original films I've seen are "About a Boy" and "Below".

Posted by: Yahmdallah on June 6, 2003 4:14 PM

Hey Annette -- You should be a showbiz reporter. The exceptions-to-the-rule that the article cited were "Chicago" and "My Big Fat Greek Wedding," both of which were evidently given very careful, loving allowing-for-word-of-mouth releases and rollouts.

Friedrich -- What? The movie business is irrational, you say? Although the funny thing I discovered whenever I did any poking into the moviebiz was that there were explanations for how and why things happened. Weird ones, but plausible. I remember being so struck by it. When you're a kid and you see how many bad movies there are and how little sense any of that world seems to make, you assume that the movie world is populated by idiots and assholes. Yet whenever I spent time looking into the movie world, it always turned out that the people there were every bit as smart as people in any field are, and maybe a little smarter than most. So "stupidity" didn't stack up as an explanation, darn it. Usually I found the real explanations (so far as I could tell) came down to "fear," "faddishness," "herd instinct," "it worked last time," "covering my ass," and "revenues from video and overseas." But I'd love to see good economists go in and study the incentives of the industry and how it works. Ever run across any such thing?

Yahmdallah -- "Below"? What was "Below"? And you didn't like "Spiderman"? I did, despite some misgivings. And me saying I like a movie is usually the kiss of death to its commercial prospects...

Posted by: Michael Blowhard on June 6, 2003 5:03 PM

The economics of film distribution are indeed interesting, and about to get changed by digital theatres, of which there aren't that many yet.

Actual film prints are expensive, and have driven releases towards the massive media assults mentioned, and smaller, grow it slow releases in more artsy houses owned by some of the chains (test the waters on those prestige films in limited release first).

Digital should bring back the middle ground once it's more widely installed, a bunch more discs doesn't carry the risk of badly sunk capital that a bunch of prints does. That's what excited my aunt who's been in production and distribution for a couple of decades about digital, that it'll allow studio's to take more risks on quality films that might only have mid-level success.

Haven't seen the hard numbers on how the break points are shifted, but the theater owners are all gaga about it too. They're not keen on sinking all that capital in digital projection gear, but are slowly biting the bullet, as they are overjoyed that it will allow studios to ramp up the number of screens a sleeper hit is on much quicker and at MUCH lowered cost.

And they've been wringing some concessions out of studios and distributors to help defray the cost of digital upgrades, which only makes the 'gotta get it all back this first weekend' mentality of the studios worse.

But I think one should expect all of that to turn a corner back towards movies having even more legs than they used to once things are mostly digital.

Posted by: David Mercer on June 6, 2003 8:40 PM

Isn't four-walling simply the procedure whereby a theatre is privately hired for the screening of a film by its director or whoever, thus bypassing studio distributors?

Posted by: James Russell on June 7, 2003 4:51 AM

Yes, I liked Spiderman, but it hasn't stuck with me as a memory. The one scene I remember is when something blows up next to spiderman and you see his shocked face through the part of the mask that's ripped - total comic book shot and they finally got it right in that regard.

"Below" is a sleeper about a submarine in WWII that may or may not be haunted. It's great as a submarine movie in its own right - make sure you turn on the 5.1 surround sound - and the ghost story aspect is very well done. Out on DVD right now.

Posted by: Yahmdallah on June 7, 2003 10:53 AM

Hi David, Yeah, the conversion of movie theaters into electronic entities will be an interesting thing to follow. Not that it matters, but I'm a little more wary about it than you may be. I'd like to see the projection systems get to be 2 or 4 times more detailed than they currently are, for one thing. The films I've seen digitally projected have been clear but dead -- so far, they're throwing images that remind me of overhead-projector imagery more than movie imagery. I'd hate to go to a movie theater and wind up watching big-screen TV; I'd rather watch a movie. (But I'm a dreamer, I know.) And I wonder whether the effect on distribution will be a diversifying one, at least at the theaters. I remember that one of the rationales behind the multiplex was that it was going to offer chains a way to show the little pix in addition to the big ones. Instead, most outfits seem to be using cineplexes as a way of staggering the showtimes of three or four blockbusters. This morning, for instance, I walked past a 9-plex. "Matrix Reloaded" was in five theaters, some big comedy was in three, and "The Italian Job" was in one. I do certainly agree that digi-tech will inevitably help diversify the world of moviemaking and moviegoing. I'd argue, in fact, that it's already doing exactly that: flash animations, short flicks, Imovies, etc, are all "moviemaking" as far as I'm concerned. As far as movie-theater material goes, though, I'm betting against diversification there. I suspect that the wider range of movies (and movie-like) material that we'll be seeing will be on DVD, the Web, etc., and that the theaters will become ever more devoted to squeezing ever more out of ever bigger digital extravaganzas. What's your hunch about this?

Hey Yahmdallah -- For what it's worth, I was a little touched by "Spiderman." I thought it had a few nonroutine qualities -- a little sadness, a little absurdity. I was surprised by how true the movie stayed to the emotional heart of the comic book. Thanks for the rec to "Below." I'm eager to check it out. Did you enjoy a recent sub movie I enjoyed, "U-571"?

Hi James, I asked around and surfed around a bit, and as far as I can tell we're both right -- the meaning of the term seems to have evolved over time. The older or (ahem) classic meaning is the one I was using. You road-showed your movie, basically, swingin' into town with as many prints as you could afford, renting theaters on your own terms, plastering ads everywhere you could afford to, and tending the gate yourself. More recently the term seems to have come to mean what you take it to mean. The overlap seems to be in the idea of taking the theater(s) into your own hands, rather than playing ball with the conventional distribution system. In the old sense, you "four-walled" the city you were targeting -- the word summoned up the idea of Your Movie being visible everywhere, on all four walls. In the new sense, the four walls seem meant to refer to the four walls of the movie theater itself.

Calling William Safire...

Posted by: Michael Blowhard on June 7, 2003 2:41 PM

Michael, I think you're definately right, at least in the near to medium turn on all those points. Until digital projection gear is pervasive (the rule not the exception) and stuff has started to depreciate a little bit, things might open up a bit as far as diversity of pictures in theatres. But probably not at least until the second round of equipment, when the trickle down to the smaller multiplexes and art houses has happened.

THAT's when the captial structure of the distribution end is really going to be different, and sleeper hit's can go big at close to zero incrmental cost by word of mouth, and smaller 'artier' multiplexes and art houses can run damn near anything with much lower costs.

So I think my optimism comparative to your view was probably bred by my looking out to a longer time horizon: short term, yes, digital is going to drive theater owners to clamor for bigger and bigger hits from the studios.

The trade rags had already acknowledged all this required pain 2 years ago when I read them when my roommate brought them home from work all the time. They look forward to being able to make more money while being more responsive to the public's tastes.

But in the mean time all those other digital movie-like material you mention will get better and better, until at some point capital costs of projection gear are amortized, and you can start showing ever smaller and smaller 'runs' profitably.

I too enjoyed U-571, don't remember how I ended up seeing it.

Posted by: David Mercer on June 8, 2003 5:27 AM

I think you miss one issue in examining the income curve of big movie releases -- DVD/videotape.

When I was young, I went to see movies when they showed up in the local theaters (much of this was in military theaters in Europe, so even further down the food chain than small towns in the US.) If the movie was good, I'd go to see it again. When the movie left the theater, the next chance to see it would be years later on TV. If it was good enough to see more than once, it was really the theater or nothing.

Fast forward [elided 8-)] years. I now go to the theater to see a new movie. I like it and realize that I'll want to watch the movie again. Rather than spending $40-50 (including baby sitter, etc.), I wait 6 months and buy the DVD for ~$20.

The only time I would go to the theater more than once for the same movie is when the experience of the theater enhances the movie so much that I don't want to see it only on a smaller screen. That seldom happens for me, and I suspect that my experience is fairly common.

My point is that much of the back-end revenue has been shifted from the later weeks of theatrical release to video stores.

Posted by: Doug Sundseth on June 9, 2003 1:03 PM

Just a couple of random jottings on this thread...

1. I have to admit that I didn't get a whole lot out of the Spider-Man movie. And I say this with some surprise as a comic-book reader of about 47 years standing. I think what happened is that I basically chewed all the flavor out of the Spider-Man concept back around 1965/1966 when I was a teenage funnybook fan and just about lived for that comic for a when I saw the movie as a grey-haired old coot, it was so true to the spirit of the original comics that I had a feeling of, "I've seen this before!" Objectively, of course, I'm tickled fuchsia that the movie was so faithful to the old comics and that it did so well at the box office. Somebody (Lileks?)commented that if he were 17 again, he'd be in Nerd Heaven to be living in an era when big-budget Spider-Man, Daredevil, Hulk, and X-Men movies were coming out at the current pace... but the point was being 17 again. Me, I got old and now I just like to read comic books about this talking duck who's so rich that he can go swimming in his money...

2. Video has certainly changed things about movies in my lifetime. No longer do you have to go to a temple to worship their mysteries at posted times - you can pull a movie off your shelf at home and watch it from the comfort of your own armchair any time you like. I've been saying for years that it'll get to the point where you can see a movie and buy a copy of it on video in the lobby on your way out. (Assuming there aren't anti-trust laws preventing that sort of thing, of course.) It's at least theoretically possible now -- I notice the local cheapo theater is still running movies that are now out on video.

3. To tie in with the comic books mentioned above, it's interesting that one nearly extinct genre of comic book (among many) is the movie adaptation. Formerly (i.e., decades ago), movie adaptation comics were very common. While they served a promotional purpose before you saw a movie, getting you so excited about what you read in the comic that you just had to go out and see the movie itself, they were also a kind of souvenir of a movie you liked, since after seeing it in a theater, you weren't going to see that movie again for years (until it turned up on TV, anyway, if then). Now, with video, you can buy a copy of the movie itself (something absolutely unthinkable before the emergence of home video back in the '70s), so why bother with some artist's line drawings and a shortened summary of the story? Comic-book sales and distribution are industry are vastly shrunken now, compared to, say, the 1950s, and the mass-distributed casual reader market has largely dried up, so the disappearance of movie adaptation comics is probably due to a combination of causes rather than just one. But I think video and being able to buy the movie itself has eliminated the market for souvenir reminders.

Posted by: Dwight Decker on June 9, 2003 8:11 PM

Dwight, good points all. The bits about video canniballising theatre viewing couldn't be more true. That's the effect that led to the recent round of chain consolidation and small houses shutting down.

The capital requrement shift once projection has gone digital is this. Currently, it takes a lot of time and thousands of dollars per print to make movies for theatre distribution. This is raw manufacturing cost, and can run into millions on it's own for large releases. A decision to show on LOTS of screens can't be done on a dime, it MUST be determined in advance. With digital projection, a lower budget sleeper film can gain popularity by word of mouth, and distributors can add screens instantly, on demand, at low cost, as theatre chains ask for them (manufacturing cost is now a couple of bucks a copy, and can be done on demand). The chains and studios were uncoupled by anti-trust law, so the chains can now show stuff from anybody.

You will soon be able to go from 100 screens to 3000 in DAYS, at very low cost, if demand was there.

The studios aren't entirely happy about this :-)

But they still have the most marketing $$$ to ram things down the pipe.

I remember those comics-for-the-movie, at least the end of that era from the 70's. I never read comics much at all, I got sucked into the world of books very young.

Posted by: David Mercer on June 10, 2003 2:09 AM

Oh, and the theatres increasingly realize that you can watch stuff at home whenever you want, which is why they are now oriented at selling you an experience. Hence the comfy chairs and loveseats in newer stadium style multiplexs.

With 50"+ digital TV's and surround sound DVD, they can't slack on creature comforts anymore!

So the market has made it's correction to home viewing, and the studio's have captured the repeat viewing without the middle man.

Posted by: David Mercer on June 10, 2003 2:12 AM

Hey all

Cool points from everybody, thanks. I'd forgotten completely about movie-adaptation comics. They were a big part of the comics world for years. Funny how easy it is not to notice when something simply stops having an existence, isn't it?

Funny too how odd it is these days to be an adult moviegoer, what with so many of the films targeting teens and only teens, really. Which is a larger concern/worry/observation -- adolescents are being so extravagantly catered to these days. In the old days, "culture" was much more oriented towards adults, and kids had to make do with lowbudget/exploitation/ underground stuff. They weren't the center and target of the culture business. These days they are -- us boomers are making a living catering to and exploiting adolescent tastes and preferences.

And what does this do to a person? I wonder sometimes. It must be so great having all your teen tastes served so extravagantly -- all your buttons are being pushed, all the time. How will kids ever emerge from this into some larger appreciation of life? Will they remain forever stuck with adolescent "turn me on, now" values? I mean, it's not as if adulthood has been made to look either 1) inevitable or 2) desirable. The only thing that's been made to look desirable to them is poppy electronic button-pushing values. When they turn 35, or 75, are they still going to be restlessly looking to get their buttons pushed? Kinda scary, or it is when I get around in the midst of a middle-aged day to thinking about it.

David -- Last I knew, what had driven the consolidation/closing-down of many movie-theater chains was that the chains had wildly overinvested in more screens, better screens, and the business simply wasn't there. Which, of course, as you point out, has a lot to do with the popularity of video, so we're probably saying the same thing...

Posted by: Michael Blowhard on June 10, 2003 11:00 AM

Yes, I think we're saying the same thing about screen overbuilding from different angles.

The studios kinda pulled a briar patch on theatre chain ownership as they saw the effects of video...please don't take away my ownership of that distribution channel! And then they (the newly freed chains) got into market share wars and overbuilt, fighting over an ever smaller pie.

UATC (United Artists) at least still has some smaller 'plexes in artsier cities that show almost all non-blockbusters. My fiancee working at 2 of them (in Boulder and Santa Fe) in the last few years is where I got a peek under the covers of that niche. They still use these types of theatres to test the water on sleeper hits for wider release in the rest of the chain. Digital will just make that crossover have a lower threshold eventually.

Posted by: David Mercer on June 10, 2003 2:15 PM

Maybe my perception is skewed, or I haven't followed movies closely enough to really be aware of the nuances...but haven't adolescents been "catered to" since the Baby Boomers started getting allowances? Early to mid '60s -- beach movies with Frankie and Annette, Elvis movies, the two Beatles movies, James Bond movies. These were not aimed at serious adults. Frothy entertainment for older kids and teens has been around all along, and I remember my parents complaining that there didn't seem to be any movies any more "for them." There were more serious movies and movies aimed at older audiences as well, then, but my parents' generation was also chased away from movies by sex and profanity. Not that my parents' generation didn't know about the seamier side of life, but they took the attitude that you got enough of that sort of thing in the real world and you didn't want to buy a ticket to wallow in it some more. By the mid-'80s, I remember surprised-sounding comments in film news articles that the movie "Cocoon" had brought in a demographic that theater-owners hadn't seen in years -- senior citizens, who had heard by word of mouth that there was finally a movie "for them."

I'm not exactly sure where I'm going with all this, so I'll close by mentioning that Girlfriend and I recently visited her brother, and her 18-year-old nephew put on a DVD of Jackass: the Movie. And for the first time, I began to really understand how my parents felt 35 or so years ago. But Mom and Dad didn't know the half of it...

Posted by: Dwight Decker on June 10, 2003 5:08 PM

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