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David Poland

By David Poland

Box Office 101

As we move into the silly season for media, with many “sky is falling” stories about theatrical box office sure to clog our bullshit filters beyond capacity, I will lay out a simple list of things that should be considered when writing or reading box office stories.

1. Every Movie Is A Business Of Its Own – There are slates at distributors, yes. But the reality of box office is that every film has its own story to tell.

The most obvious unique point is budget, both in production and marketing… neither one of which box-office writers have a clear view of in most cases. With due respect, imdb and Mojo post publicly acknowledged production estimates… which could be off enough to falsely make a film appear profitable or a loser.

But in the big picture, as journalists love to bring up such misleading stats as market share, estimated (aka guessed) numbers of tickets sold, grosses of multiple movies weighted as though alone they can define success in anything more than the simplest way.

Here is an easy one… What percentage of tickets for Finding Dory have been for 3D and how many in 3D for The Secret Life of Pets? Do you know? If you don’t, you have know idea how many tickets were sold for either. Even if you do know, you have other details that change the stat. IMAX? Adult tickets vs chuldren’s? Matinee pricing?

Here’s another… Universal has less than half the domestic gross that it had at this time last year. But only one eof their films has any chance of losing money. So what kind of year is the studio having?

And of course, domestic analysis only is 100% idiotic. International box office is a part of the construction of every budget for every film made with the involvement of a major studio. Now You See Me 2 did almost 4x overseas what it did here… so the idea that the film is a disappointment is factually inaccurate. Now… how problematic was it for Lionsgate, which distributed hands-on here vs profitability in the rest of the world, where they share success, but have partners country by country. And $100 million gross in China returns 50% less (at best) than if that same $100m was earned in another international market.

And how do you balance all of that with Café Society, which Lionsgate is releasing for Amazon Studios, and for which Amazon does not hold worldwide theatrical rights?

Wild headlines are fun and easy… but are terrible journalism. The margins, pro and con, in the details of each film can make all the difference between success and failure.

2. Think Beyond The Broadest Statistical Claims – How many times have you heard that Millennials aren’t going to the movies anymore? Lots, I bet.

So who bought all those tickets to Deadpool and Captain America: Civil War and X-Men: Apocalypse, etc, etc, etc.?

THINK, people! The biggest grossers are driven by Millennials and kids whose families take them to animated films. Still.

And for that matter, who do you think is going to Lights Out and The Shallows? Your parents?

And hey… there were some movies with high expectations that didn’t perform to expectation. Does anyone really think that is a generational issue? That the iPad kept them from showing up? Just silly.

3. If You Sell It, They Will Come – If there anything that has changed dramatically in the last 5 years, it is that it is now 100% clear… if you are selling a movie that people really want to see, it doesn’t matter what date you are on, what the history of that week or moth is, or what your film is up against. People show up.

Records are being broken in domestic and worldwide theatrical again… yet, many insist that it’s all over for theatrical. Recently, a bright light at a trade espoused the dim-bulb theory that major studio/distributors are on their way out because they no longer have absolute control of all distribution.

Everything is not perfect. Far from it. But Peter Guber told the story decades ago and it remains relevant today. A Sony exec asked him why they make the flops and not just the hits. Executives tend to know more than nothing, especially when they have a finished film. But by the time the film is done, it’s generally too late.

That said, great marketing can sell almost anything… at least, for a weekend. Of course, there are boundaries put on most marketing efforts, starting with budgets and continuing with approvals, general risk aversion, marketer disinterest on mediocre or crap movies, and many other possibilities.

Most recently, I have written in detail about the new Ghostbusters, which I think took a big hit because of how it was sold. But I can’t blame the Sony marketers, because the ambitions of the film, because of the pedigree, means that it didn’t start with the marketing department sitting down, clean, to consider how best to sell that particular movie. There were also outside forces (Twittiots), which I think we overstated, but are certainly a distraction.

4. Everything Is Cyclical – Universal would have told you, had you listened, that this year was going to be way down off of last year… guaranteed… they knew what they had in the shoot and it was simply less hugely commercial. The hero thing will peter out at some point. Has it yet? Probably not. That doesn’t keep Marvel or any other studio from having misses. But the media is so anxious to be able to “FIRST” that they saw it coming, there is premature speculation all over the place.

The stock market insanely demands annual growth every year. The film business is not the stock market.

5. Things Will Change – I am not saying that things will not change. The industry turmoil of the last 50 years has been remarkable. It hasn’t been 20 years since 1997, which was when the first studio DVD was released (Twister), changing the business to sell-thru instead of rental and allowing the launch of Netflix a few years later, which eventually would lead to streaming.

I see one more big paradigm shift coming, which is access to virtually everything post-theatrically for a flat rate.

What is most shocking, at this moment, is that things haven’t changed more. If you look closely at the box office, what is shocking is the ongoing commercial success of dramas and comedies and small indies – on a certain scale – and certainly the blockbusters.

We went almost 100 years into the movie business before we has the first billion-dollar grosser. It took 6 years to get to the second one. And since three years later, in 2006, we not only haven’t gone a year without a billion $ movie, but since 2010, multiple billion $ films have become the norm. A new record of 5 such films was set last year… and will very likely be broken this year.

Don’t give me your adjusted grosses. No one pays bills with adjusted grosses. Respect the past for what it was and respect now for what it is.

The decrease in the number of people going to the movies has been a consistent leak for over 30 years now. 60 years ago, there was television… which didn’t kill movies, but did change the industry. And now, streaming and access to massive amounts of content are making for change again.

For the record, I wrote about the death of DVD before anyone… and years before major media caught on. I am not an ostrich. But I look at history and I don’t see the high drama that so many love to make into headlines.

The only people likely to kill movies are the studios, getting too greedy and losing perspective. It could happen. It’s not happening today, for all the flaws in the process. (Some of my favorite people believe in day-n-date for studios and I think they are dead wrong… suicidally wrong.)

I think that’s it… the broad strokes. I probably forgot something and will follow up.

The biggest thing is… think… dig deeper… challenge the media position of The End forever being around the corner. Every writer who pisses me off in this regard is much, much smarter than their writing on the subject. They just don’t seem to push themselves to take it seriously. It is not brain surgery. And it is not defined by panicky or excuse-making execs.

And so it goes…

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12 Responses to “Box Office 101”

  1. Devolution says:

    “I probably forgot something and will follow up.” Editing. You forgot editing.

  2. Jeffrey Boam's Doctor says:

    You know an interesting stat DP?

    From the $90b BoxOff from the last decade, 46% of that loot came from original screenplays.

  3. Movielocke says:

    Day and date is a “sky box” solution to a “problem” for a microscopically thin slice of ticket purchasers. Meaning, the existence of luxury suites allows certain folk to attend the mass audience event they otherwise would not, and day and date allows certain folk to participate in the mass audience event they otherwise would not.

    Day and date is fundamentally about segregation of mass audiences, not convenience.

    Oh but they will sell you on the convenience, but the vast majority of movie goers go because it gets you OUT of the house, they don’t want to stay in. The people who want to stay in are by definition NOT movie goers. The people who have to stay in because they are priced out of attending are not going to participate at the proposed day and date prices.

    But they should treat it like a luxury sky box if they want to try it, strictly limit the supply of devices that can participate in day and date, like to 2000, and sell them for 100,000 each. Mostly rental type houses will buy them and rent them to corporate events, like sky boxes, and a few elite families will buy them as well. Bingo you served the actual audience advocating for it and also not disrupted the primary business model.

    Heh, it’s like the morons that think car ownership has no utility value to owners and self driving uber will end ownership. Devastating question, where do you put the car seat? How much do you enjoy putting the car seat in the uber every time you go somewhere? Do you take the car seat into the grocery store, or pay to hold the uber in the parking lot while you shop every week? How does a company deal with the asymmetric demand for car usage occurring at peak hours if everything Becomes self driving fleets? there is extremely little arbitrage to be gained in operating a fleet from 10am to 4 pm, but you can only profit if you’re maximizing revenue streams at all times, which you can’t do because of the asymmetric demand loads. There are like 90 million vehicles parked in office parks five days a week in this country, if there is arbitrage in not keeping those 90 million resources idle, companies would be trying to exploit that huge supply of idle resources during that 10am to 4 pm range with the sharing type of innovation disruptions so trendy today, but there is no money to made doing it because the demand isn’t there.

    uber solves the “inconvenience” of a twenty something single person not being able to drink themselves into oblivion every outing, but really offers nothing but disadvantages for all other cohorts of car owners. The idea that twenty something alcoholics current requirements and decisions represent the future of car ownership in the coming self driving era is fucking laughable.the high utility of car ownership is not going to change even with self driving cars.

  4. brack says:

    Not to nitpick, but wasn’t it the 1989 Batman that started home video sell-thru (maybe not at such a major rate, but it got the ball rolling)?

  5. EtGuild2 says:

    Nice piece.

    NOW YOU SEE ME 2 is the perfect case study of today’s landscape. The movie has a shot at becoming Lionsgate’s highest non-Twilight/Hunger Games movie of all time(!) worldwide if it passes its predecessor with some markets left, but is likely barely profitable. What do you do with that?

    Those big 9-figures movie…BFG, IDR, ALICE, even STAR TREK with it’s pretty bad offshore start, etc likely aren’t as lucky (though for the former, Blizzard could get a bounce). You’ve got a slew of cheapie/low-budget genre pictures that will make more money. Will there be a shift back, with non-Disney studios doing 1-2 tentpoles per summer, gunning for Mega-Movie status, instead of 3-4? That would be wise you’d think, but then you look at Sony and Paramount, which are having bad (borderline terrible in the latter case) years.

    On Universal, you’re a bit forgiving. POPSTAR, HUNTSMAN and HAIL CAESAR were likely all money losers, though two of them were probably negligible, just like WARCRAFT and NEIGHBORS 2 were negligible on the other side. They are in better shape with BOURNE now, most likely, but without it they had to rely on Blumhouse and Illumination to prevent a disastrous year.

  6. Sideshow Bill says:

    brack, I’d go back a little further re: “sell through.”

    E.T. was released on VHS in October of 1988 for $25.

  7. Dr Wally Rises says:

    Yeah, but E.T. was a played out six year old catalog movie at that point. The release of Batman was a paradigm shift, in that they took the movie out of theatres – it was still playing across the nation – in order to get it onto home video for Thangsgiving. The compression of the theatrical window began there, but it didn’t catch on straight away for megablockbusters. Jurassic Park, for instance, wasn’t released on home video for eighteen months (it was released on VHS for Christmas ’94). Titanic wasn’t released for nearly a year. Even as recently as 2000,The Phantom Menace wasn’t on home video for nearly a year. Of course, this is unthinkable today (The theatrical to home video window for The Force Awakens was less than 100 days). So yes, Batman was the game changer.

  8. Mostly Lurking says:

    Yeah, but David did not say that Twister was the first sell through title, but merely that it was the first dvd and acted as the shift to sell through for the entire industry. Batman may have been one of, if not the, first to have a shorter window and sell through pricing, but beginning with the Twister DVD, sell through became the norm whereby any movie, no matter the size, was available at sell through pricing. I think David is saying that 1997 was the watershed moment because sell through became the norm (i.e., the model) as opposed to the exception where every now and then a blockbuster would have sell through pricing.

  9. Sideshow Bill says:

    Good point, Dr Wally. Especially about how it changed the theatrical window. It’s one of the reasons I don’t go to the theater as much. I can wait 80-90 days to see The Shallows.

  10. PTA Fluffer says:

    Star Trek II was one of the first VHS titles priced at sell-through, at 39.95.

  11. David Poland says:

    Sell-thru VHS was a business… but it was not dominant. Rental was still a huge piece of the revenue and many films were not pushed to sell in large numbers.

    When they went to DVD, it was sell-thru first for every title for the first time.

    Batman was, I believe, the first time they pushed VHS sell-thru with a slight delay between buy date and rental.

  12. captain celluloid says:

    Great piece

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