Wednesday morning Motion Picture Association of America president Dan Glickman got on the phone with (by my count) 15 or so entertainment business journalists. He told them a few things they probably knew, a lot they could have guessed and a panoply of things of no great significance.

The seeming important news was that the domestic marketplace (ie. the U.S. and Canada) generated $9.63 billion in sales of movie tickets during 2007. Now if the total box office gross is important to one’s essence, you might have noticed around January 2, 2008 that both industry and mainstream press had stories about this very thing and, depending on one’s outlet of choice, reported annual box office gross as low as $9.62 billion and rising as high as $9.7 billion. So, this exercise has become an annual attempt at pretending to convey news we already now.

If it wasn’t already the case, we might ooh about the unprecedented amount of money spent at multiplexes assuming audiences maintained a healthy appetite at the concession stand. The MPAA believes (along with the National Association of Theater Owners) the figure translates to a non-record of roughly 1.4 billion admissions – about 0.3% more than the prior year and 200 million fewer folk than attended back in 2002.

In a little more than a half-hour the party line of journos were informed that the Hollywood majors spent between 6% and 54% more to produce and market their wares. We were told that more and more film goers use the Internet to get movie info; that the foreign box office expanded 4.9% and that people who built home entertainment centers were more likely to go see a movie at the mall than people yet to trash their cathode ray TV set.

What’s poignant about this annual exercise is the effort made by Glickman and fellow MPAA officers to make the data seem both important and significant. However, the illusion dissolved quickly, and those relatively new to the drill were left scratching their heads when their most basic queries could neither be answered nor contextualized.

Here’s the most obvious example. Under the banner “Movie-going” the text reads: “U.S. moviegoers, with the exception of African-Americans, went to more movies in 2007 than in 2006. This is based on survey conduct (sic) in English.” The text is accompanied by bar graphs and it would seem only natural that someone would ask why the frequency for Hispanics would climb from 8 to 10.8 annual visits while African-Americans declined from 9 to 7.8.

For starters the inquisitive scribe was told this was part of an attendance study that would be published later in the year. He asked for a few highlights and it was clear from the silence that no one from the MPAA had seen more than the graphs. Putting aside the decision to separate out this tidbit, what was the point of this piece of data’s inclusion? When one begins to consider this information it might be helpful to know what percentage of moviegoers are Hispanic, Caucasian, Asian, Puce or Samoan and the market share of each in the overall population. Also, is their film habit trending up … or down.

Glickman referred to the box office data presented as a “useful tool but not the only barometer.” His delivery suggested some insight into alternative analysis but even that proved wanting as he ascribed some qualitative standard to the Academy Awards.

There is a certain reflexive quality to the information presented that suggests it might have been instructive in a bygone era. What’s called the average production/marketing cost is in fact the amount of money invested by a studio and does not include outside financing or money put up by promotional partners such as McDonalds. One participant asked if an additional 20% were added to the figure, would it not be more in line with actual costs. The simple answer is “yes,” but the belabored response was that the organization was considering “more comprehensive ways” of presenting data some time in the future.

The sad verity may well boil down to the too grim to consider prospect that the people making the decisions about what winds up on the marquee at the local multiplex don’t know what it costs or who might be out there to see it. What the figures imply has to be deduced by a process of elimination. Clearly the audience domestically or in most of the rest of the world is not growing demonstrably. Whatever small boost has occurred is not proportional to the rise in the general population.

What’s also clear is that the cost to produce a movie gets more expensive year by year and whatever small increment is added to a movie ticket cannot keep pace. If that were the entire equation, the conclusion would be a fire sale of Hollywood assets.

There may well be a Motion Picture Association report that carves up a film’s typical revenue pie the press will not be extended. About a decade back I went through the painstaking process of doing just that and concluded that between 22% and 24% of gross revenues were derived from domestic theatrical exploitation. Even then the ancillaries were growing in significance not simply for the percentage of gross they represented but also because in certain areas one could recoup 80% of revenues as opposed to the 45% to 50% typical of traditional exhibition.

So, the true artistry in the biz is in the craft of the deal. And that skill is not only difficult to get across in a fever chart or another pictorial presentation but not the sort of useful information anyone at the MPAA wants presented at ShoWest … or the Oscars.

March 6, 2008

– by Leonard Klady

Be Sociable, Share!

• 
•