04 Apr Film Fund-amentals: The Summer Forecast
OK, it is now official. Hollywood is in a steep slide down a slippery slope courtesy of its fondness for big-budget tent pole movies. Well, that is one way of reading the recent report by Benjamin Swinburne, Morgan Stanley’s chief analyst for film and broadcasting.
Due to a variety of factors, Swinburne presents clear data showing that the actual revenue for movies made by the major companies has dropped by 40 percent between 2007 and 2011. Declines in box office and video revenue are part of the problem. But he also notes that: “Only through significant realignment of (movie) cost levels, particularly in the area of marketing and distribution but also overall production costs, can values be maximized.” In other words, the major Hollywood companies are making movies that are way too expensive and spending way too much at every level for a “profit” that is increasingly non-existent.
OK, I have been saying the same thing for the last three years, but I don’t work for Morgan Stanley and their word is taken a lot more seriously in the business than mine. Too bad. I’m nicer. However, we both have a point, and the upcoming summer movie season could be the ultimate testing ground for the impending tent-pole movie implosion.
The summer movie season of 2012 (which sort of started in February) is dominated by a collection of some of the most expensive movies ever made. With a base average budget of $100 to $150 million (the low end being $70 million and a high end of $250 million or more), the upcoming months will be dominated by some of the costliest advertising campaigns imaginable. The tone is already picking up a strange smell of desperation combined with a sense of shifty-eyed bluffing more associated with a round of liar’s poker.
Since we have already gone through the pre-summer release slate (movie releases are now divided between the “summer” and the “Holidays” — the rest of the year is simply a few weeks between these two), a clear pattern has developed. At best, only one film a month stands any chance of being a major success (The Lorax in March and more recently The Hunger Games). The rest are dead on arrival (for example, John Carter). We can call this The Highlander theory, since there can be only one.
This really isn’t a surprise due to the shifts in audience viewing habits as well as a growing weariness from the worn-out movie franchise approach. Add in the basic fact that the current economy is forcing many people to cut spending to the bone (and beyond), combined with steep cost increases at the box office, and you have the perfect storm model. At best, nobody can afford to go to all of these movies every weekend, and lots of people are holding back for just the select few major event flicks of the year.
The only sure thing this summer is The Dark Knight Rises. This sucker already has as many fan sites on the web as Lindsay Lohan has traffic tickets. Even if it turns out to be two hours of Christian Bale reading the phone book (which I would like to officially offer as the rumor du jour), the anticipation is enough to push the movie through the roof. Despite its late opening date (July 20th), The Dark Knight Rises will be the 800 pound gorilla in the room that everybody else has to work around.
With the May 4 release of The Avengers, Marvel Studios will have reached the summit of their masterful business plan to make really expensive movies that have no plausible way of breaking even. Since their last two productions (Thor and Captain America: The First Avenger) actually did much better in Europe than in the States, Stan Lee had better hope that the euro stays stable. The same goes for The Amazing Spider-Man. Marvel-based movies have a surprisingly fixed return rate that is OK, but they don’t seem to understand their own limits.
But I suspect that the first major causality of the summer will be Dark Shadows. It rarely works to make a big-budget movie based on an old TV series. Likewise, it doesn’t help to turn it into what appears to be a campy comedy (even if the original series had a wild and crazy melodramatic buzz). So the only real question is which movie in May will do worse, Dark Shadows or Battleship? Most likely, it will be Battleship (though it will have a stronger hold on the highly over-rated young male viewer ship — that is, if the young male audience can get summer jobs and buy their tickets).
The only advantage Men in Black III will have is a release date free of competition. Since the previous sequel (made ten years ago) did badly and is viewed by many as a total embarrassment, the effort to do another sequel isn’t exactly based on rational thinking. Even the recent release of the movie’s theme song has already resulted in lots of critical snipping, so I suspect this baby will have a bumpy ride.
Perhaps the only significant wild card of the summer will be Prometheus, Ridley Scott’s quasi-prequel to Alien. Advance word suggests that the movie is kind of an odd mix of Alien, Blade Runner and whatever else happened to pop into Sir Ridley’s mind. Most of Scott’s films don’t go very far. But every so often, he creates the defining film of the decade (for example, Alien and Blade Runner). His batting average is way below .500, but when he does connect with the ball it becomes a homer.
As for the rest of the summer, what can I say? Read some good books, go to the pool, and hope it doesn’t turn into a global warming scorcher like last year.