Tuesday, August 14, 2012

10 Things Hollywood Won't Tell You

"The real nail-biter? Our balance sheet."

By CHARLES PASSY - Smart Money - MAY 16, 2012

Picture it: captains of industry struggling to stay relevant in a world they no longer understand. It may sound like a Citizen Kane-esque cinematic saga, but it's actually the story of today's studio executives, say film-industry watchers.

The U.S. box office take dropped almost 4 percent in 2011, to $10.2 billion, marking the second straight year of decline. The root of the problem, of course, is the growing popularity of home viewing via Netflix and other video-on-demand outlets.

Last year, consumer spending on video streaming jumped 50 percent, to $3.4 billion, reports the Digital Entertainment Group. The change has as many implications for the movie business as digital downloading did for the music industry.

Granted, Hollywood makes some money from streaming sales. But those digital dimes aren't enough. Add it up and you have a potential crisis, says Christopher Sharrett, a professor of communication and film studies at Seton Hall University: "We could well be seeing the end of motion pictures in theaters."

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Joe's Comments:   You'd think that these wunderkind executives would figure out that now is the time to look at volume marketing.  Years ago all of the Hollywood studios produced several hundred movies per year.  Now its down to six or seven major blockbusters with 200 million dollar budgets. 

They pump a minimum of 30 million into promotional campaigns for each of those mega projects so that you will all rush out and see the latest and greatest on the first weekend.  What happened to the era of slow build? When a movie would be released on one coast and played across the country with the promotional costs being minimal due to word of mouth by the time it reached the larger markets.  Of course a true turkey would never make to New York in those days and mercifully the audiences would be spared.
The new model is supposed to combat piracy... you buy that?  Neither do I. Its the model they were taught in business school and is the mass marketing blitz approach. 

Charleton Heston made the statement that "Film as a business is an art, and film as an art is a business."  Unfortunately the current purveyors have ignored the art aspect of the balance.  People want stories that satisfy a need whether it be love or success.

Roger Corman, over his career, now counts over 385 produced films.  His Autobiography is titled: " How I made a Hundred Movies and Never Lost a Dime".   The title alone should give someone a clue.  Half of Hollywood's elite film makers came through the Roger Corman machine.

About two years ago George Lucas stated that he was leaving the blockbusters behind to focus on doing a lot of smaller movies for digital release.

Don't these guys get it?  Start putting money back into smaller lower budget projects. Stop spending 30 million dollars on promotion and put that money into three films. Market it through internet chat rooms and so on.  Get a buzz going - oh I forgot... someone would actually have to work to do that.

Because the similarities between streaming video and TV is a natural lets drift into TV land a little:  The AMC TV model is a mystery to most network executives.  You sink money into a quality series - yes!  Something that someone might actually want to watch! Then you run those episodes several times during the week in varying time slots - its not quite VOD but its the next best thing.  AMC is never up against the competition and they cumulatively get the viewers for the advertising count.  Throws the whole model on its ear! Methinks this is the way of the future for TV, where the dial is crawling with unwatchable drek!  In Canada where three mega broadcasters control dozens of channels they are doing one media buy and replaying on numerous channels - again in different time slots.  Producers have got to get better deals on the rebroadcast clauses.  Right now they aren't getting any extra revenue in many cases.

Getting to VOD and streaming movies, the advantage truly is that one can watch at ones leisure and not be pressured by Madison Avenue advertising hucksters into their time slots and agendas. Again, they are now having to work for their money in a way that they haven't since the sixties.

There... enough for today.