It’s a Mad, Mad, Mad, Mad World

While other industries have been struggling to survive over the past year, film exhibition has enjoyed a paradoxical boom. Around summer time, box office was around 15% higher than the same time last year.

Box Office is up around 9% this year compared to last year. That’s good, right? Yeah. We’re slowly emerging from the most protracted recession since the Depression. Fingers crossed. Studios should logically be reluctant to spend on high risk blockbusters, right? Film budgets should be reigned in, right? Wrong. The specialty film business is still moribund. Studios have either shut them down or incorporated them into their main film businesses. Distributing smaller films is a delicate business and requires much care and money.

Studios have discovered that the more they spend on a film, the higher the profits. Enter the world of mass consumerism, or pack mentality. The bigger and sexier something sounds, the more likely we are to see it. And the studios know it. It gives us something to talk about when we socialize. We tell our friends or our friends tell us about an “event” film, boosting ticket sales. And if you’re a 14-18 year old male, who sees such films multiple time, even better. We do this at the expense of watching other films.

Enter Avatar, the most expensive studio movie ever made, due for release later this month. Depending on who you believe, Avatar’s budget has come in at a modest $300 – $400 million. The upper estimate most likely includes a marketing budget which typically consumes an additional 30-40% of the production budget. These figures are not for the faint-hearted. We’re writers, but we still need to know where the studios are at.

Studios are currently uber-obsessed with branding, and not of the cattle kind. They would rather spend $100 million on a tent pole movie with franchise potential than $20 million on a heart rendering drama. It’s having an effect on agents and managers around town. They’re simply delaying or avoiding reading anything outside the current studio remit since there is an absence of buyers. Unless you’re Clint Eastwood selling “Gran Torino”, you’re screwed. Studios will also be producing fewer films next year as the abnormally high pre-WGA strike product has gradually filtered through the exhibition system.

Release patterns will also change. This year saw tent pole films released throughout the year, to highly profitable effect. It seems that the days of releasing the best films only around the holidays may be over.

The network television market is also taking a turn southward. Network television is facing audience declines of around 20-30% as viewers defect to cable, VOD and other distribution media. Current network scripted shows are in decline as cable picks up the flack. Those that have survived are hiring fewer staff writers; 6-8 rather than 8-12. Cable television is showing the highest market penetration overseas, particularly Asia. Global distributors and sales arms have their work cut out for them since films are currently broadly taking 50-60% of their box office outside America.

Not a pretty picture. As with all industries, films follow trends and cycles. So the thunderstorms today do not suggest that cinematic sunshine won’t follow next year.

Keep writing!


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