The summer box office wrap by Brooks “If he’s typing, you may want to check the facts” Barnes is, of course, a classically enraging mixture of carefully chosen facts and utterly ridiculous spin. I’m going to try to keep this from being a full-on rant for the sake of clarity. So…

MYTH 1: Ticket Sales Is A Major Issue – When this foolishness began, it was 2005, the year after The Passion of The Christ, Fahrenheit 9/11, and Shrek 2, three major box office anomalies. First, there was the year-to-date hysteria. Then the then showbiz beat hack, Sharon Waxman, hooked into comparing the weekend box office vs the “same” weekend the year before. This, of course, is not remotely insightful, as the release date choices, with the exception of Opening Day and the two holiday slots are not consistent in scale from year to year. So, for instance, the “same weekend” that saw Harry Potter 7b open to $169 million this year had Despicable Me and Predators opening last year. The combined opening of those two films was less than half of Potter’s. But no sane person would expect otherwise, right?

By the late summer, however, the weekly shriek about the world ending because of week-vs-week numbers was not working. 2005 weeks started beating 2004 weeks. And that’s when the ticket counting began. Yes, there were some people interested in this arcane issue before then. But as with comparing weekends year by year without context, counting tickets sold without context (or solid, reliable numbers) was and is a fool’s errand.

The film business is, always has been, and always will be about revenue. Studios and other funders do not care one whit about the delivery system, so long as whatever combination of systems maximize profits.

When television came along, of course it scared the theatrical film industry. But as time passed, those companies got into the business of television and started enriching themselves via that revenue stream. And the delivery of theatrical films changed too. (Obviously, this is a wildly simplistic recounting of what happened.)

When DVD launched 15 years ago and became dominant about a decade ago, the degree to which studios were willing to cut into tickets sold was determined by the revenue from DVD. It really goes back even further to VHS, when the studios got serious about sell-thru VHS after years of pushing to keep VHS a rental-driven business.

The exhibition window has shortened, by design of the distributors, every year since the advent of sell-thru VHS… perhaps longer. Because that’s how profits were maximized. And with that, fewer ticket sales.

Of course, the NYT conveniently now forgets that “tickets sold” were not a prominent stat until they made it one, just 6 years ago. They now write about it as though it is a standard by which decisions are made in the industry.

Which brings us to our next myth…

MYTH 2: Domestic Box Office Happens In A Vacuum – There is lazy reporting on box office all over the place. I just never expect the NYT to be leading the world in hacky journalism. And in this area, they do.

When you report on international box office or DVD revenues as though they are Value Added revenue, you are not doing your job as a journalist. These are not the Olympics. Rooting for your home country and acting like the rest of the planet is an afterthought is not just offensive, it’s stupid.

When you reporting on domestic box office as though the answer we see there is the only answer that defines success or failure – with occasional exceptions – you are not doing your job as a journalist. Every movie is an exception. Each one has its own revenue story.

Now… here is the hard part. Studios don’t publish DVD numbers. Studios don’t offer foreign numbers the way they offer domestic numbers on a weekly basis. Studios certainly don’t offer the budget on a movie and when they do, they are usually lying. And they never, ever, admit how much they are spending on marketing. So it’s very hard to do this work and to be comfortable that the numbers are 90% legitimate or better. And, obviously, many of these numbers are months away from being real for anyone, because of release dates and the windows between revenue platforms.

However, responding to the failure to be able to get real answers by publishing half-assed spin with all the editorial confidence of seeing and touching a dead body is an absolute dereliction of responsibility. And while I don’t expect much from most writers – interestingly, many of the bloggers take this a lot more seriously than the major media outlets – I do expect the New York Times to behave responsibly.

This notion that they like to repeat that international box office being a newfound summer savior is, simply, a load of excrement. Of the top 50 grossers of all time (unadjusted… oy), only 3 earned half of their revenue domestically… two of those being from 1982 and 1977.

If you want to trace the history of studios embracing and then relying on international box office equally and then more so than domestic on large budget movies, go back to the mid-90s. In 1996, Independence Day was a smash at home, but grossed 60% more overseas. In 1997, Titanic’s international gross was more than double its domestic gross. And so it has been ever since.

Harry Potter’s foreign has consistently doubled (and more) domestic. Each Pirates movie has seen its international gross become more dominant over domestic (53%, 60%, 68%, 77%). All the Rings movies were 63% – 66% foreign grosses. The Dark Knight is the only billion dollar worldwide grosser yet to have less than 60% come from international.

Now, how does the New York Times think decisions get made about financing these “tentpole” movies with their $200m-plus budgets? Do they realize that almost none of them could be profitable with these production price tags if there was no international revenue?

I think they do. But this is where it blurs for them. Because it is the bottom falling out of DVD revenues that have changed the direction of the film industry in the last few years, not any real fear of theatrical becoming a problem. If anyone has anything to fear from the issue of more revenue from fewer tickets sold, it’s the exhibitors, not the studios. But the NYT can’t really report in detail on the DVD business. So we get what they can report, sized to fit.

MYTH 3 – The Only Way To Count 3D Is To Consider The Box Office Bump

To start with, the 3D bump is wildly overestimated by journalists. About 15% of revenue domestically this summer came from 3D ticket sales. About 30% of that is The 3D bump. So 4% – 5% in revenues is the real 3D impact on this summer, measured in this simplistic way. That’s not insignificant, but it’s trotted out like it is a game changer. The problem is, it’s turning out to not be enough of a game changer… or to change the game in unexpected ways.

The failure of 3D as a mainstream film marketing tool is evident and real questions about whether 3D is improving business or hurting business are being addressed internally at the studios. A big part of that consideration has to be that the four biggest 3D grossers were also pre-sold franchise titles, which may or may not have had their fortunes improved by the emphasis on 3D in marketing. 3 of the 4 films underperformed previous franchise entries domestically, even with the 3D bump. It’s hard for Transformers to complain when the film did over $1b ww, but 12% off domestically has to be noted. Especially when the film seemed to be much better liked in many quarters than the previous entry.

The impact of so much talk about 3D, even as the majority of tickets sold domestically for all of the major 3D releases was under 50% for 3D, is a huge factor that has nothing to do with the popularity of the theatrical experience.

MYTH 4 – Context is a minor issue

At the end of March, 2011 domestic box office was more than 20% behind 2010 domestic box office over that first quarter of the year. By the end of June, that difference was just 8%. End of July, it was 5.3%. End of August, 4.4%.

I had the conversations with people back at CinemaCon. They were convinced that the sky had fallen. One said, “There is NO WAY that the business will self-correct from 20 something percent down to less than 5%. Mid teens, maybe… if they’re lucky.” This was a multi-decade box office analyst. Dead wrong.

This has been a remarkable comeback from a poorly programmed first quarter. And if you look at the LOADED holiday movie season, there is reason to think that we will be under 3% – or maybe even up from last year – when the books on 2011 are closed. And the holdovers into January 2012 look huge.

How about the summer itself? The last 5 years have been the 5 highest grossing summers ever, the only ones over $4 billion. The highest domestic gross was $4.3 billion, the lowest $4.1 billion. That’s less than a 5% swing, at its broadest ends, over 5 years.

And then, it’s about tickets sold. Because that estimated number doesn’t have to acknowledge how solid the box office has been or that it has gone up in previous summers, making a joke of the “it’s four in a row… eeewwwww” spin.

MYTH 5 – Summer should be judged on grosses and very little regard for costs

Yes, Barnes broke down the costs of one movie (Pirates)… so he could be more negative.

Love this gem – “(Disney also profits from sales of DVDs and related merchandise, however.)” However? Does the NYT know that the vast majority of movies only recover costs and hit profit in that “however?”

The truth is that the studios were a lot more cautious about spending this year. There were only two outright flops of any real size this summer, when last year and in years passed there were often 5 of 6 (a few years ago, 4 major losers at one studio).

Last summer, we had two comedies that cost about the same as Hangover 2, each with major stars. And those both felt like successes. Hangover 2 grossed $100m+ more than those two films combined.

The two Marvel movies had about the same number of tickets sold as previous non-Iron Man in-house Marvel films… and both benefited more clearly than most films from the 3D bump.

Ask yourself this… is there a single major studio that would take last summer over this summer? Think hard. Because I don’t think you could find more than one. Universal would be looking at Bridesmaids vs Despicable Me on the plus side, a hedged Cowboys & Aliens vs Scott Pilgrim on the down side. Probably 2010.

Sony is borderline. They had four solid hits last summer, but Smurfs on its way to $500m and $200m from Bad Teacher chases the bottom line on last summer’s more expensive foursome. Eat Pray Love vs Zookeeper could be the smaller grossers that push Sony to prefer 2010…but it’s close.

But aside from that… Paramount owns Transformers and didn’t own their big movies last summer. Fox did much better. Disney had big worldwide hits. Warner Bros easily takes this summer.

But none of the majors had terrible, career-damaging summers.

MYTH 6 – You can count on the NYT to report movie news and not just opine on it like the bloggers

Read the piece carefully and you will see that there are ZERO industry quotes, on record or off, that confirm any of Barnes’ hypotheses. Even the quotes from Phil Contrino do not speak to the arguments Barnes is making, but to facts that are really not a part of Barnes’ spin.

Just sit back and breathe in the lead… “It was the summer that North American movie attendance continued to slide, Hollywood’s reliance on overseas ticket sales intensified, the Smurfs flexed their minimuscles and a cadre of A-list stars flopped — again.”

Are you f-ing kidding me? What summer were you watching?

Barnes writes, “On a global basis, three movies took in more than $1 billion, the industry’s new threshold of smash success.”

It was an awfully narrow threshold until this summer, Brooks. There were 3 billion dollar grossers this summer. But there were only ever 3 in summer history before, never more than 1 in a year. There have never been more than 2 in the same year before.

Also in Summer 2011, there were 17 $100m domestic grossers vs 13 last summer.

And not only did The Help do business, but that it has significantly outgrossed the movies slotted the same way in the last few years with much bigger stars attached and equally big books.

Even Larry Fucking Crowne, which was deeply disappointing, grossed $53m worldwide so far, has a bunch of unopened territories, and will likely find a way to breakeven or better when all is said and done.

Are you writing an Op-Ed or reporting a story? I am fine either way. But if you write an Op-Ed and pretend it’s news reporting, that’s kinda f-ed.

Conclusion – I don’t need the NYT or anyone else to agree with me. But I do demand some level of reasonable analysis in arguments. Especially when the NYT is so very influential. People will read this pack of spin and believe it. And it can do nothing but hurt the industry.

There is no way that Mr. Barnes could go to look at this summer and spin it as negatively as he has unless he and his editors had decided on the answer before they started writing the story. You don’t have to say it was great summer (though it was pretty great). But if this was a shitty box office summer, there will NEVER be a good one.

And if that’s what the NYT wants to sell, it is not selling news and it is not fit to print.

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