The Hot Blog Archive for March, 2010
More On Folding Windows
Patrick Goldstein offers a significantly less understanding and more short-sighted view of collapsing windows than EJE.
However, it is instructive about the mania that continues to bubble up in the desperate executive offices of studios.
So even though everyone in the world knew it was coming out 12 or so weeks later on DVD, they went to the theater anyway. As one studio chief said to me the other day, barely suppressing a chortle: “Case closed.”
Whichever studio chief that was… you are a fool.
Only a fool takes a single example as the definer of an entire paradigm shift.
No one has every felt that you couldn’t do massive one-day numbers by opening Harry Potter or a Johnny Depp/Tim Burton family movie that obviously had a massive must-see. That is not a good argument for shortening windows.
For one thing, we all know that the actual window for the majority of box office in the vast majority of wide releases is under 10 weeks. The 12 week thing was never an infringement on that, as such. If you opened Harry Potter day-n-date, you would likely do over $70 million at the theatrical box office, do as much as $200m in PPV/VOD, and sell at least 7 million units of the DVD, generation over $100 million in sales revenues there. That’s a $370m opening weekend. Wow.
But what about Clash of the Titans? What about Sex & The City 2? What about MacGruber? What about Cats & Dogs: Revenge of Kitty Galore?
The whole thing is predicated on two assumptions… that they will get audiences to spend more on a title by making it available across platforms more quickly or same day… and that people will pay a significant premium for the privilege of immediate access.
Patrick coughs up this furball… a decade old notion, repeatedly proven not to be something PPV buyers will bite on… when he writes, “If you have a film like “Shutter Island,” “Cop Out” or “The Bounty Hunter,” that could just as easily be enjoyed at home as in the theaters, why not charge fans a premium–say $22.95–to see it at home on VOD at the same time as it plays in the theaters?”
Because they won’t pay it.
And if they don’t pay it, the movie is losing money.
(And by the way… Shutter Island on your TV at home? Really? Do you just hate movies, Patrick? I never thought so.)
Patrick is a smart guy, but on this issue, he has long had a massive blind spot… he thinks HE is the audience for widely released movies. He is not. Nor am I.
He writes, If you let your business model lag too far behind the habits of your most loyal consumers, you’ll soon discover that you don’t have a business anymore.
Well, first… no industry has made progress by letting the consumer set the structure for them. But putting that aside, the record industry and the film industry are NOT the same. A digital music file can play on the world’s most expensive sound system or a $10 mp3 player that holds 500mg of music… and 90% of the listeners would not notice too much of a difference either way.
There is an audience for rough hewn delivery of movies. They are, in almost all cases, either motivated by the excitement of possessing what they are not meant to possess OR they are price motivated, as in they don’t have the money to pay to go to the movie theater or to buy a retail DVD.
What really killed the record industry was pricing. They were greedy. And technology showed up and bit them on the ass… not only technology, but big companies that were allowed to freely engage in the sponsorship of piracy for years.
It is, absolutely, easy to find movies online, illegally, right now. Wires may get faster, but the speed of download is not what is holding back the mainstreaming of piracy in America. In the end, the system is in place and people – for the most part – are willing to pay a reasonable price.
But the biggest signal is, so ironically, the very argument at the center of Patrick’s argument… people went to go see Alice… and Avatar… and The Blind Side… and Shutter Island… in large numbers. Over 15 million people paid retail, in each case, to see this films in a format they could only experience once. No stopping the DVD for a pee break. No going back to figure out what happened in that scene in the cave.
THAT is the habit of the industry’s most loyal customers… the frequent moviegoers. The next most loyal customers are the frequent DVD buyers. And after that, the frequent renters. And after that, the buyers of all the pay channels. And after that, the selective pay channel buyers. And after that, the PPV and VOD buyers. And after that, the spenders of the teensy, tiny longtail dollars that reflect what the value of 90% of studio releases after 18 months or so.
The bet that Disney and Patrick seem to want the entire industry to make is that the least valuable part of the revenue stream will, because it technically can, become the biggest.
I think they are nuts.
And as I wrote in the last piece, I think Iger has more in mind… which is a complete disinterest in the quality of movies… searching for a way to make Disney invulnerable to financial trends and to failed films.
Much as I say that I don’t think one example should serve as a template, you don’t have to go too much farther than the Oscars to see how much unpredictability is critical to quality. Hurt Locker was a movie that almost no one wanted to fund, make, or distribute. It did very little business, but won Best Picture. Slumdog Millionaire was a movie that almost no one wanted to fund, make, or distribute. It did a big honkin’ load of business and won Best Picture.
Warner Bros, nor any other studio, would fund The Blind Side. It took Peter Jackson and a relatively sparse budget to get District 9 made.
Disney fired the guys who brought us Burton’s Alice in Wonderland and The Proposal, but are still happily in business with the guy who made G-Force and Confessions of a Shopaholic. How they butter their bread is a little more complex than giving 40somethings immediate access to DVDs or PPVs of every film that hits theaters.
Shortening windows in no way addresses what “broke” in the film industry in the last couple of years. In fact, it is kind of the opposite. The big dip of significance is in DVD sell-thru. The reaction is to emphasize DVD sell-thru and other Home Ent platforms. The cover, for the all-to-eager press, is the technology.
Imagine if the record industry, with all the problems they encountered with CD sales, but with continuing success in the concert business, generating many times the gross revenues of CD sales, said, “Hey… CD sales are down… let’s force bands to only do 12 weeks of concerts a year because that will force more people to buy CDs of their music… and it’s less expensive… and easier to market. We don’t need that concert money in the pool.”
Now, I know this is a bit silly, since for the most part, records promote concerts and not the other way around. But I think some of you will see my point.
Shortening windows for studio movies is not a serious approach to a positive future for the film business.
And in the indie world… well, completely different, since the size of the audience and the availability of the films is a near 180 degree different proposition.
One of the very unique propositions of the film business is the lack of price competition. It’s quite brilliant, in terms of building an industry. Pricing increases are incremental. Every piece of product costs the same. Potential ticket buyers know the fundamentals and make choices of taste (often tricked by marketers).
In recent years, the post-theatrical availability of movies has evolved, in no small part because of pricing considerations. The choice to make DVD a sell-thru-first business and not primarily a rental play, like VHS, was massively successful… in no small part because it was cheap. From $25 to $19.95, the average cost per unit dropped and felt comfortable. Then NetFlix revolutionized the rental business and made it so cheap and easy that buying DVDs seemed silly for many. DVD sell-thru dropped more. Library titles started going out for under $10 per film… sometimes under $5 a film. All of a sudden, even $14.95 for a brand new DVD title seemed like a lot of money when you could have as many movies as your queue could hold for $20 a month or less.
The structure of having a variety of options for Home Ent devolved in the mud of a price battle.
So what do the window breakers want? They want to increase the cost of the theatrical experience with 3D to $15 per person or more in major markets. And they’d like to offer you ownership of a DVD that you can show as many people as you like… for the same $15. It might be $22 on Blu-ray.
There is no real indication that more people would by the DVD day-date. There is no real indication that people will pay premium prices day-n-date… not even $15.
So, you can choose to see the movie on opening night for $5 at home… or you can pay $15 per person to go to a movie theater. The film industry competing against itself on pricing. Brilliant.
After all, it’s working so well for DVD…
Trying To Write Off Windows Again… Smart & Completely Wrong, All In One
Edward Jay Epstein is an interesting character. He writes with authority about the subject of the the business of Hollywood and is often much smarter about digging into the details of it all. And he is, often, lost in a fog of misleading, retro, inaccurate theory.
The latest is a new book, “The Hollywood Economist: The Reality Behind the Movie Business,” which I have not read. I feel I will eventually have to… and I am likely to face hours of eye-rolling and the frustration of deciding whether to deconstruct the guy’ work or not.
In any case, the first glimpse is offered on The Wrap, in an interview that is part dead on and part “huh?.”
For instance – “In 2005 , around when the (last) book went to print, studios looked at DVD sales and they extrapolated about future revenue and made decisions based on those extrapolations. Well it fell apart, the independent movie business collapsed, broadband expanded, creating new ways of delivering movies. Studios have cut back on production and development. They’ve entered the second phase of this digital revolution, which is nowhere near over.”
He is right about the studios projecting and losing. But this is not actually at the core of why Dependents were shuttered or why internet delivery started to become realistic. Cutting back on production and development costs does have something to do with DVD revenues, but has absolutely nothing to do with the “digital revolution.”
Or he tries to devalue the uptick in box office over the last number of years – “Revenue from the box office rose four or five percent, but you have to remember that there was a big ticket price increase. It was also a bad economy and audiences usually spike then.”
Perhaps he’s just simplifying for an interview, but ticket prices actually went up – according to the iffy NATO numbers – about 3%… as they do most years. And the box office revenue went up more.
On the other hand, I agree with what he seems to want to say about 3D not being some nirvana for the industry. The problem – and this is often my problem with this guy – is that he wants to pretend there is AN ANSWER… and that is the lie of this industry… which ironically, he poo-poos earlier… that the industry has convinced Wall Street that this is a consistent business.
That said, Wall Street is also getting a simplistic, inaccurate rap. The stock market has not been particularly friendly to Hollywood. Analysts are neither terribly well educated about the business nor are they generous to the industry… and the lack of movement in stock prices shows that.
Hollywood Suits would like to create an industry that is trendless, on the financial side. No risk… consistent reward. This brings me to my big beef with Epstein…
All this windows talk makes less sense today. I think that [Walt Disney CEO] Bob Iger and [Time Warner CEO] Jeff Bewkes understand this. If you’ve got a movie like “Avatar,” maybe you want to hold off on when it comes out on DVD so you can milk all the money out of theaters. For smaller films, like “The White Ribbon,” that’s only playing in three cities, why not release it simultaneously on television or DVD? Now with issues with piracy it becomes even less coherent. People don’t want to necessarily buy pirated content, they just are in a hurry to see a movie. The studios have warehouses filled with DVDs of movies they’re shipping to theaters, so why not release them quicker?
First… it’s kinda funny that he isn’t aware enough of the current business to know that Fox is not milking Avatar theatrically, throwing away $10m to $20m in box office by releasing the film on DVD in a couple of weeks. The same is true with The Blind Side, which I believe landed today.
On the other hand, Fox will probably try to come back into the theatrical marketplace – the revenues from which will wildly outsize the post-theatricals, as Titanic‘s did – to mine more money in 3D this summer or early fall before firing up another version of the DVD package, which will be followed at some point by a 3D release.
But I digress…
This is not a new phenomenon for the studios. The already-shorter theatrical windows probably cost each major studios $100 million or more in box office gross every single year for the last five years or so. The payoff in the past was that DVD revenues were so massive that getting to them was a key strategic choice… throw $10 million in revenues away to rush to $200 million.
The “digital revolution” that Epstein is so hungry for, ironically, is two steps forward to go five steps back. The “must move forward” attitude is not only wrongheaded, but it is, I believe, extremely dangerous to the industry. On the level of making the industry “safe,” it’s great… lower all the risk, lower all the reward, and turn movies into widgets. That’s where we are heading in IgerLand.
The fact is, only a very narrow group of moviegoers are “in a hurry to see a movie.” And the people who are in a hurry are – taa dah!!! – the most significant group that go to movies on opening weekends. And as we can see at the box office, they are going. They are going in large numbers. And as the DVD sell-thru business has stabilized, maturing naturally into being less of a massive cash cow than it once was, they are buying, renting, and downloading in the Home Entertainment window as well.
But the biggest problem with Epstein’s mentality, clearly sold to him by the studio execs who are obsessively pushing forward for a windowless world, no matter how the numbers actually break, is that he has bought into the idea that the one area that, as we move forward, has real upside… and some risk… Theatrical… is a problem or irrelevant.
Price Point… which is now only showing flexibility in theatrical… and Saturation, meaning we are now at he point where the amount of content is making each piece of new content something quite different than it was 10 years ago or even 5 years ago… are the two areas of absolute blindness amongst those with their whip hands pushing shorter windows forward.
What scares me is that it is all being done incrementally. None of these guys has the true courage of his convictions. And when the incrementalism continues and windows continue to shrink, really understanding how much it is costing the average studio release will be very, very hard to analyze. But these businessmen don’t really give a good g.d. about movies. They want to be Wall Street heroes. And as they continue to erode the film business from the inside, from the highest levels, there will be no going back.
There is only one window in the new era. Theatrical – WINDOW – Post-Theatrical. Period.
Eliminate the window and by 2015, studios will be subsidizing theatrical… not because there was ever a loss in demand for theatrical… but because they will have killed off a significant percentage of their revenues.
As we learned in the Big DVD paradigm, the cost of marketing will get bigger, not smaller, as the ability to differentiate gets harder.
If an “average” (no such thing) $100 million domestic grosser nets $250m – $300m in revenues before costs start coming out in 2010, with about 50 million people paying to see the individual film in one form or the other within the first year, I see this world of “digital revolution” creating 70 million people paying to see the same film in the first year… with a net of under $200m.
The main principle I see behind the fantasy that it will be otherwise is that, somehow, digital home delivery is going to replace or improve on DVD cash flow. But again… Price Point.
It’s pretty basic. You are all consumers out there. Are you paying more or less or the the same for Home Entertainment content in 2010?
How much will you pay to watch something on your iPhone/ITouch/iPad?
If you love Disney, the answer is mostly “zero,” because the same guys who are pushingpusingpushing to shorten the window are still using free downloads as bait for selling DVDs at – taa dah!!! again – a higher price point. And they are right to be doing that. They have to.
But where they lose me is the leap to the idea that at some tipping point, consumers will be willing to pay premium prices for convenient, but inferior delivery systems.
Look… I believe that we are headed to a very different model that what we have now, in which all post-theatrical is sold under wide-reaching flat rate deals on a monthly or annual basis, studio by studio or group by group. This may include using shortened post-theatrical delivery windows as bait. It will probably include choices about how much advertising we see when receiving the content.
But the theatrical window is the ONLY way to differentiate between what we now think of as Movies and what we now think of as Television. The theatrical window is the ONLY way to maintain the notion that there is financial upside to pushing the medium. There is no Avatar without a theatrical window. There is no Pirates 4 without a theatrical window.
On the other hand, there is a Hurt Locker and a Blind Side without a theatrical window.
And some would say, “God bless,” to that notion… a return to the 50s… or the 70s, if you will.
But the problem I envision is that it won’t take long for the process to become about how few new films, how few new TV shows, how little new product the distribution companies can produce and still keep their audiences interested enough to pay the monthly bill. This will, of course, inevitably lead to some “special events.” But it will also lead to a further narrowing of the marketplace, a further indulgence of brand laziness (Blind Sided AGAIN!… Chinatown Pie! “Forget the offensive line, Jake… just put your penis in there… it’s Chinatown Pie!”)
It leads to the lowest common denominator because it continues to disincentivize quality in favor of brand value. And then, The Hurt Locker will have no theatrical buyer – instead of one this time – and because of less revenue from non-theatrical windows, will not be able to muster even its $11m budget. Sure… if it gets made, somehow, it will get picked up to be on the HBO on steroids that Time-Warner will probably have. But it will be just another buy to fill the 360 hours a week of programing they need to fill.
But more realistically, there is no Hurt Locker. Not from a veteran filmmaker. Not even for $11 million.
Of course, Disney wants to lead… they are the most branded major studio in the world… perhaps the only branded studio left. If you don’t want to be in the movie business, don’t be in the movie business. And due respect to Sean Bailey, Disney is getting out of the movie business, aside from the service side and using it to increase the number of brands they have, to a great extent.
Fine.
So that’s who the industry, which is not trying to get out of the film business – well, they are running from funding production like their hair is on fire- and that doesn’t have the brand build-out that Disney starts with, is going to follow?
Insanity.
Didn’t we go through this cycle before at Paramount, when the MTV and Nickolodeon brands were going to lead Viacom’s way into the future?
While the Clevers were giddily applauding the demise of the arty Dependents, did they forget that Fox Atomic and Rogue – genre divisions – bit the dust as well and that Lionsgate is still a company worth too much and too little at the same time?
Exhausting.
Edward Jay Epstein just got caught in the crossfire for towing the line. He wasn’t the first. He won’t be the last. Sorry, Ed.
But hey… I’m in Bermuda… relaxing… I’ll just try to let this all sink in before I rant again…
Health Care Passes In Spite Of The Outrage & Outrageous Behavior Of The Right
“It is done. I am the First and the Last, the start and the end. I will freely give of the fountain of the water of life to him who is in need.”
ADD, 2:36a pdt – Paul Krugman gets it right by focusing on the disparity of how this “debate” has been framed by both sides… and it feels so like the 2008 election… less than 17 months ago…
Obama –
Weekend Box Office
11:26a add…
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It will show up soon enough…
But I wanted to point out the absurdity of suggesting that a $20m+ opening for The Bounty Hunter is “embarrassing.”
It will easily be Jennifer Aniston’s biggest opening without a major male opener (or a dog… same diff’) by her side and is also a solid number for Gerry Butler, trumped in a comedy only by a mid-summer opening for The Ugly Truth.
This thing where we take expectations – primarily based on notoriously poorly done tracking for kids movies – and then turn a perfectly good number into an “embarrassment” by specious comparison is galling. Wimpy Kid performing above silly-low expectations while Bounty comes in right in the range of expectations is no real surprise, much less something for Aniston or Butler’s agents to worry about.
grow up.
BYO Bermuda – Weekend
My son contemplates his first Dorothy’s burger… the best burger on the planet and a BIFF tradition.
Did The Dinosaurs Go Out Calling Each Other Names?
I was really sad when I read Armond White’s review of his process of reviewing Greenberg.
This led to The Village Voice’s Jim “J Hoberman” Hoberman’s response. And Glenn Kenny’s amusing, now-aware-of-the-pile-up response.
Of course, this all came after thousands of words about White being disinvited to the Greenberg screening, which harkens back to thousands of words about the NYFCC president’s slap at the recipient of an award from the group for not attending their dinner, which harkens back to Kevin Smith visciously attacking a dying Joel Siegel for not wanting to listen to the proudly comedic vulgarity of Clerks II, which harkens back to…
Ugh. Sick of it.
It’s all an episode of Dysfunctional Family Feud. I had to ask MCN’s headlines editor, Ray Pride, to offer context to the links about some of this because, aside from our tiny circle (in which I am generally not welcome), no one gives a fuck.
Critics are under fire. The authoritative voice is, as I wrote about and no one who comments on this blog much cared about, is being disregarded each day. Yet, as a group, there is more personal squabbling amongst film critics than there is any consensus on working as a group to figure out what should happen in the immediate future.
Instead, there is an endless array of T-Rex’s mocking the Stegosaurus for being too wimpy to go without armor and the Stegosaurus slamming T-Rex back for tiny arms and some other dino slapping at Rex for using the nickname S Saurus and no doubt, some other form of fossil fuel to be mocking me right now for mixing animals from disparate Jurassic periods rather than engaging the point I am trying to make.
And it’s not just us old fucks… that would be everyone over 40. The kids and their Twittering… and worse, the over 40s who are – with the exception of Roger, since he is actually using it as a content creation base and not as a digital bowl in which it vomit – trying to pretend to be hip by endless and meaningless Twittering… damn!
We are losing the beautiful forest of Ideas for the meaningless, self-serving, underconsidered, small-minded trees.
And I admit… I am perfectly willing to get into the cluster fuck of it all (that’s 3 fucks in one blog entry… time for some pathetic loser to make an issue of that) and to throw down. But God knows, I try to keep it to the issue and not the person.
No matter how many times people want to make my issues with Nikki Finke’s work into an issue with Nikki Finke, you’re wrong… and really, you’re stupid. I’m telling you that the fabric of the work – and Nikki has more than a little to do with the very tonal shift I am writing about here, at many outlets… more personal, less actual fact – is being shredded and all “you” want to talk about is why I am trying to hurt the person leading the charge. You may be sick of hearing it, but no matter how much you want to make it about the personal, it is about the professional… or the lack of the professional.
And I have to say, every time people have made this accusation of me, within a few years, they are all on the same track as me, having, amazingly, come to the same conclusion (“well, duh… it was so obvious… why so angry, Dave?”) on their own.
For all of my irritation with Glenn Kenny’s attacks on me, before our Detente, I had to admit even then that I understood what was irritating him so… and it wasn’t me, because he doesn’t know me… he only knows what I write. I had to stop, push aside the hurt feelings of being slapped, and figure out why someone felt compelled to attack me so often. And after pushing out the lame ass idea of jealousy as a motive – which is almost always thrown around first, is sometimes true, but often not and certainly not in Glenn’s case – I finally came to understand that he was passionately fighting for his idea of a right way to love film. I honor that. And Glenn, it seems, came to be willing to accept that however I do it and however I get it wrong in his view, I am not trying to hurt the object of his passion.
Likewise, I honor Armond White’s passion. I am not in his head. I don’t get to decide why he thinks what he thinks. But his ideas are not suspect as being facile and simply attention-seeking. He has a history.
Personally, I don’t think it is such a big deal that he, in whatever way, called for Noah Baumbach’s disappearance from the planet. It’s rhetoric, not a jihad. Get the fuck (4!) over it. And Armond, at the same time, needs to grow up and understand that rhetoric has consequences and he, like all mortals, gets to deal with the firebombs.
When I ran the e-mail that defended White – which coincidentally was first sent to me by a smart young writer with plenty of his own internet access who clearly did not want to fight this fight in public under his own name, avoiding that baggage – my phone rang, as many others did. Leslee Dart made the case. She may have been throwing herself under the bus. She may have been trying to get in front of Scott Rudin – who was the first financial supporter of her new company when she launched it, when it was The Dart Group… and arguably her most important single client – running her over. But we’re all grown ups here, right? We know what a publicist does. We know that Armond’s invite to the next screening may have been cover… or it may have been planned.
Anyway…
The sad part of the fallout is that it means fuck-all (5!) to Greenberg. It will not move a single dollar in or out of the box office for that film. But it has laid bare some of the real and personal rage inside of the NY film critics circle (caplessness intended). And now we get to chew on that gristle like real hyenas.
Proud moments.
Wed Notes II
Avatar DVD – The most interesting part of the April DVD release is that the highest grossing film of all-time is getting a DVD release 18 weeks after release.
Al the talk about 16 weeks and 14 weeks and 12 week DVD windows make us forget… the actually theatrical window of value after the studios have used marketing muscle to front-load the box office is about 8 to 10 weeks. A movie like The Blind Side, with 12 weekends of more than $2 million and 17 weekends of over $1 million is a very, very rare exception.
Of the rest of the Top Ten for 2009, here are the number of weekends with $1m grosses…
Transformers 2, Harry Potter VI, Twilight: New Moon, Chipmunks: The Squeakquel, Sherlock Holmes – 8 weeks
Up, Star Trek – 10 weeks
The Hangover – 14 weeks
Avatar did $6.5m last weekend, 13 weekends in… and that’s with losing many 3D screens to Alice. There is little doubt that the weekend before the film arrives on DVD, it will still do more than $1 million.
And still, the DVD lands.
Is it marketing? Is it Fox’s fiscal quarter? Is it concern about piracy becoming more of an issue for American dvd buyers? Is it short-window insanity… even as they talk about a summer re-release of the film?
By the way, Titanic had thirty $1 million weekends. Different world.
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The notion that Green Zone’s soft open has dick all to do with whether the Bourne Franchise still has juice in it with Matt Damon aboard is absurd. Truly idiotic on its face.
Audiences are not stupid. They didn’t think Remember Me was Twilight 3 and they didn’t actually think that Green Zone was Bourne 4.
The Bourne problem that Universal DOES have is that Greengrass is still saying he’s out and Damon is saying that he’s out with him. If that is the case, it is no longer a franchise, but a re-boot. And that has its own dangers.
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There is some chance that neither MGM nor Miramax will be sold, in spite of all the noise. Disney is on more of a mission to dump their history, so it has a better chance of selling at a low price, especially to Harvey Weinstein, who will not pay the $700m asking price, but could do deal in which Disney still gets a piece of the revenue of the revived library in exchange for letting him have his glory at a price.
At MGM, the same problem remains… either you write off more than 2/3rds of the value of the investment or you sit on it, waiting for it to become worth more again. The logic is, why sell for so little when if you are going to take the hit, you might as well gamble and see what the future brings.
The same game is being played, essentially, with Focus and Overture… sell if the deal is rich enough (read: dumb enough?), but don’t dump an asset just because you can. No one wants to be Paramount looking at Summit’s success with Twilight the next time around.
Fox, DreamWorks, and Disney are pretty much the only studios that would not be sold by the owners/investors right now. Besides Universal being in the process of being sold and MGM being foreclosed upon, make no mistake that Sony, Viacom, and Time-Warner would all sell to The Deep Pockets if there were any out there that deep and that interested. This remains a high-risk, low-reward business… even as guys like Iger are seeking to make it a low-risk, medium-reward business going forward… just like Reed wants Variety to get out of the publishing business as its main gig and to focus on branding. What a way to go!
Wed Notes
Two quickies…
1. Oscar did NOT break up Winslet and Mendes. It was not much of a secret that they split during the fallout around Rev Road… a story that some of us actually showed restraint in not running, mindful that human beings should be allowed to work their personal lives out in privacy, especially with kids involved.
Oscar does not break up marriages… shared failure in the movie business very often does. Couples always want to work together, but when the movies go bad… well, egos are damaged and when both partners are looking for someone to blame… sigh…
2. I wrote this days ago, but Austin’s South by Twitterfest is suffering from major ComicCon syndrome. So much sound and fury that the noise becomes the significance… thus, meaning nothing.
If they can make a living and cough up delight for the mini-masses as such, good on them. It may be the next festival model. It will never be Sundance or Cannes or Toronto that way… but that may be an unworthy ambition. A two week party that does nothing to advance the products being marketed is really what fests were meant to be.
Just don’t tell the companies and individuals spending millions to use it as a marketing platform. Their delusion is paying for the party, where only liquor brand loyalty lasts.
And for those of us who find the endless and mostly worthless tweeting to be obnoxious enough to make us shout, “Get off of my bandwidth!!!!,” there is a classic web solution… stop reading it.
And that is yet another reason to look forward to Bermuda.
BYOB – Gone Bermuda-in'
I’ll spend some time online, but try not to overdo it. After all, it’s the boy’s first trip on his new passport.
Be nice to each other. Back to the regular schedule in a couple of weeks…
Note To Last Entry…
Short windows… even day-n-date… completely different story for limited release indies.
The big difference is that a major challenge for small releases is wide enough distribution to take advantage of their target market(s). So, if the only way someone can see a film outside of a major market is to watch it on DVD or VOD or PPV or whatever, the theatrical marketing push is often the best chance to make the other delivery methods succeed.
Studio movies are released under a completely different paradigm. A 2000+ screen release is ubiquitous. There are places that are not served… but they are a small minority of potential ticket buyers. The whole studio release business is build on the principles of mass marketing.
A scarcity model is not intentionally being used by either studio or indie distributors. But smaller indies don’t have the option of saturation.
The fantasy that the market and pricing will not contract if major distributors shorten the window is unfortunate and dangerous. But small indies are forced to live with what the majors create. If the prices for DVD and other home delivery go down for WB, it will be very hard for small indies to keep prices for home distribution up. You can Criterion it up as much as you like. If you try to fight price competition for DVD, you are narrowing your market.
So… I say “Go for it, indies. You are in a niche business and you need to use any angle you can to make it work financially.”
Studios… STOP!
D'OH!!! Reasons Why Shortened Windows Are Dumb: #117
It finally hit me…
What kind of silly person would want to adjust the system of windows when the theatrical revenues are growing and the post-theatrical revenues are getting smaller?
Seriously.
“It is clear from the changing economic model of our industry that we’re going to have to reevaluate the way in which the current window structure operates,” said Michael Lynton.
Because… uh… there’s more money in DVD.
No.
Because the interest in going to the movies is plummeting.
No.
Because the demand for DVDs and other post-theatrical is getting stronger.
No.
What is the logic behind the new wave of “shorten the windows” mania?
The same bad excuses ideas of 5 years ago… save DVD marketing dollars… avoid piracy. False notions then. False notions now.
Is there any good excuse? I guess a theatrical opening in September would fairly want to take advantage of the Christmas buying window. I get that. I can see that.
Mostly, I think this is a massive failure of imagination. The execs have had lay-offs, budget cuts, pay talent less, budget less for marketing… and still, they are spending too much on movies, that are not making what they should in spite of all the cuts. There is nothing left. (Aside from cutting their own salaries or employing fewer suits.) So let’s f*** with the windows!!!
It doesn’t matter that the business that the windows protect, theatrical, is rising and post-theatrical is falling. It doesn’t matter that once you get to post-theatrical, there is no going back. Your revenue stream for the life of that title is locked in and nothing – except in the rarest of circumstances – can add a dollar to it. Never mind that people are willing to pay extra in theatrical for 3D in much greater numbers than they are to pay for more expensive DVD with Blu-ray.
Desperate high schoolers in wing tips.
Avatar Math
Bloomberg did a story about the dollar distribution on Avatar today… so it got me mathing…
2.75 billion worldwide gross (could be more)
$1.5 billion in rentals come back
$275 million off the top for Fox distribution
$310 million production
$200 P&A
$300 million to Jim Cameron
$415 left over… $249m to funding partners, $166m to Fox
DVD is unusual in a situation like this, in which the DVD sales numbers can’t really be expected to come close to the theatrical numbers. Gross in sales should be no more than $300 million… probably less. That would be a now-massive 17.5 million units sold with record-breaking sales on Blu-ray, raising the price per sale.
Let’s put net ancillaries at a generous $250m. I would guess at $75m to Cameron, leaving $105 million for the funding organizations and $70m for Fox.
That puts the pay out, based on these estimates, at very roughly:
$511 million for Fox
$375m for Jim Cameron
$354m for the 2 funding companies
You could take 10% off of these figures pretty easily. On the other hand, it could be made up for by the re-release of the film in 3D this summer. Could it do $200 million worldwide in re-release? Perhaps
Looking forward to the NYT story… $500 Million Movie Returns $500 Million In Profit To Fox… Even After Throwing Away 60%!!!
I guess what’s really astonishing is that a movie could gross over $3 billion in revenues and the net is “only” $1.2 billion. What’s not being counted here is some very happy theater owners.
