MCN Columnists
Leonard Klady

By Leonard Klady

No Room At The Marquee

National Association of Theater Owner’s president John Fithian went on a tear a couple of months back, criticizing the media for taking a myopic view of film going. There’s no question that coverage of dips and bumps in the box office is evanescent, or as folks in film exhibition like to say, “cyclic.”

Fithian quite rightly prefers to embrace the “long term” perspective. Conscious or not, the cyclic attitude implies a vicious circle in which participants appear to be treading water for the sole purpose of remaining, ultimately, in the same position.

Research done by NATO on American movie going shows that on a decade by decade basis the number of people going to the movies has increased at a slightly faster pace than the rise in the nation’s population. After accounting for all the peaks and valleys from year to year, it works out to less than a 1% annual boost over the course of the past three decades.

If one wanted to take an even longer view, one could go back to the 1930s and ’40s when at its zenith of popularity one-in-three Americans went to the movies every week. Today, the frequency works out to an average of slightly less than five annual visits per person according to census figures. The present level has been relatively consistent since the early 1960s when the penetration of color TVs was advancing to 50% and resulted in a significant shift in how we spent our leisure time hours.

There is, or should be, a tacit understanding that taking a look in the rear view mirror implies some insight about the future. Fithian’s perspective is that the past maps out a tomorrow for the same, slow steady growth that’s been experienced for decades. He bolsters his conclusion by pointing to new diversions – especially those relating directly to filmed entertainment – including video tape and pay-cable but mindful of video games, cell phone and mobile computer accessories. The arrival of these new formats and outlets historically have impacted in a negative fashion on film attendance initially but not in the long run.

Fithian curiously ignores a key factor that’s provided a positive incentive for selling movie tickets. Whenever North American theater owners go on a building spree, new venues draw patrons at a disproportionately high level to conventional averages. The introduction of multi and megaplexes has repeatedly been an audience magnet and building on that bedrock, the addition of digital sound, stadium seating and other improvements coupled with a new state-of-the-art edifice have translated positively at the box office. Exhibitors can likely expect similar results when they transition to digital projection.

Of course, the conclusions can be tossed out the window if present flutters are not reflective of the recent past but presage the sort of cultural shift that began in the 1950s and reached its full impact a bit more than a decade later. There’s a persuasive argument to be made that the present construct of how and when we see motion pictures is changing in a fashion that will translate into, among other things, fewer people (literally and proportionally) buying tickets at conventional cinemas.

Taking a tilt toward that rear view mirror one can see some obvious ways in which the film industry adapted to the evolution of the television set from status symbol to living room fixture. As the box became an alternative to the big screen, moviemakers and the studios consciously took steps to make their product distinct from what one could see at home. The shape was altered, the size enlarged, stereophonic sound was added and short term experiments such as 3-D and Cinerama were introduced. Perhaps less obvious were shifts toward location filmmaking and ramping up the number of films shot in color.

The efforts of the industry raised the bar at least technically and systematically television made strides to replicate those advances.

However, the most significant change to evolve at the time was in content. Movies with rare exception had been family entertainment for a half century. Obviously some films had greater or lesser appeal for youngsters based upon their themes. But if dad was packing the household into the car for a night at the movies, he didn’t have to worry about the kids seeing something embarrassing or uncomfortable.

The majors were slow to capitalize on the growing financial clout of a new phenomenon called the teenager. They were the bread and butter crowd for indies, particularly American-International that catered to their tastes with warhorse genre fare as well as new concoctions such as Beach and Biker movies. However, following the ravages of the 1960s, studios divested the vestiges of their past and ushered in a new generation of people and movies. A significant part of their release schedules included productions that were more graphically forthright in their depiction of sexuality and violence.

While conventional television has rules that preclude it from being as obviously frank as motion pictures of that era, pay-cable that emerged beginning in the ’80s, operates with fewer restrictions. HBO closed that particular gap with the likes of Sex in the City and The Sopranos.

So, in recent years the movies have once again sought to distance themselves with technical dazzle. The majority of the most anticipated pictures of the year employ an arsenal of special effects and technical innovations well beyond the financial parameters of a TV series.

It’s been drummed into us that the core movie audience is between the ages of 18 and 25 years old and there’s no escaping the slavish devotion to that demographic when you look at a multiplex marquee. For a combination of reasons, the population is and will continue to skew older into the future and sheer numbers would prompt any businessman – particularly of the show variety – to appeal to that plus 25 sector. At present there’s little evidence that this is happening and as long as a policy, official or tacit, favoring teens and twentysomethings prevails in studio production decisions, audience erosion will continue apace.

Another factor that may or may not be a signpost for future movie going is film piracy or as we prefer to reference it, theft. For decades financial impact studies have concluded transport in illegal film copying cost the motion picture industry between 6% and 8% of annual revenues. A study conducted for 2005 by LEK Data for the Motion Picture Association of America that was released two weeks ago raises that level to 13%.

What’s not clear in the study, despite what its figures belie, is if myriad illegal activity has stepped up or efforts to keep it in check have become less effective. Unlike past surveys, the current analysis and research is much more comprehensive and authoritative. Its observations suggest that earlier impact studies were not as thorough and significantly underestimated the extent of the problem. A Smith Barney study in 2003, projected that current losses would amount to 11% of revenues.

Based primarily on gut, I’d estimate that illegal copying, bootlegging and its ilk have impacted the business between 12% and 15% annually for at least a decade. Admittedly, while the United States remains the primary center of leakage, theft of intellectual property is less significant in America than in Europe, Asia and South America.

Finally, the good news/bad news for exhibition is the plain fact that there’s too much product in the marketplace. The number of films released into movie theaters in North America has increased by roughly 44% in the past 10 years. That fact has considerably greater significance for film production because the average costs to make and market movies has gone up 78% during that time.

And while the box office has increased by 52% in the past decade, the size of the audience is only up by 4.5% in the U.S. and Canada.

The most telling statistic isn’t available and that’s the profitability of the movie production arm of a studio today as opposed to what it was back in 1996. Certainly if based solely on domestic theatrical revenues, it would be a grim picture. But there’s also sizeable lucre being generated from international exhibition and ancillary revenue streams including DVD sales and pay and satellite television. The present industry rule of thumb is that domestic theatrical accounts for about 22% of any given film’s revenue on average.

The minority stake domestic exhibition has in the big picture is another concern movie operators should have about the future. More films are being produced not to fuel the demand coming from multiplex patrons but to feed the needs of ancillary concerns, particularly the 100 plus universe of cable TV.

While I’ve yet to see a study that correlates a film’s value in relationship to its theatrical life, there’s sufficient evidence to say that a film that receives a traditional movie release has better sales in ancillary and foreign theatrical than a picture that skips that initial step. However, because of the logjam of product, people in the exhibition arena have said that most pictures are grossing 80% of the potential when there were about 170 fewer motion pictures on the release schedule. Again, there’s a sharp contrast between the 6% increase in the average gross of a movie from 1996 to 2005 and the boost in average production costs not to mention hikes in the price of a movie ticket.

The killer element in squeezing more movies into multiplexes for an audience not much greater and certainly proportionally smaller is that the overall quality of those offerings is reduced. For an indiscriminate audience or one whose level of satisfaction is low, the situation has minimal impact. That sector is heavily populated by the current set of frequent movie attendees. A comparable value level may not apply to the next generation and if that’s the case, be prepared for a theatrical movie world where on average Americans go to the movies two or three times a year.
May 31 , 2006

– by Leonard Klady 

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It shows how out of it I was in trying to be in it, acknowledging that I was out of it to myself, and then thinking, “Okay, how do I stop being out of it? Well, I get some legitimate illogical narrative ideas” — some novel, you know?

So I decided on three writers that I might be able to option their material and get some producer, or myself as producer, and then get some writer to do a screenplay on it, and maybe make a movie.

And so the three projects were “Do Androids Dream of Electric Sheep,” “Naked Lunch” and a collection of Bukowski. Which, in 1975, forget it — I mean, that was nuts. Hollywood would not touch any of that, but I was looking for something commercial, and I thought that all of these things were coming.

There would be no Blade Runner if there was no Ray Bradbury. I couldn’t find Philip K. Dick. His agent didn’t even know where he was. And so I gave up.

I was walking down the street and I ran into Bradbury — he directed a play that I was going to do as an actor, so we know each other, but he yelled “hi” — and I’d forgot who he was.

So at my girlfriend Barbara Hershey’s urging — I was with her at that moment — she said, “Talk to him! That guy really wants to talk to you,” and I said “No, fuck him,” and keep walking.

But then I did, and then I realized who it was, and I thought, “Wait, he’s in that realm, maybe he knows Philip K. Dick.” I said, “You know a guy named—” “Yeah, sure — you want his phone number?”

My friend paid my rent for a year while I wrote, because it turned out we couldn’t get a writer. My friends kept on me about, well, if you can’t get a writer, then you write.”
~ Hampton Fancher

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~ David Simon