March 15, 2002 Continued...

STATE OF THE INDUSTRY, PART 3

The problem with Sony trying to emulate Universal’s year of success with franchises is multi-fold.  First, following a trend in Hollywood is more often than not the same as missing a trend.  Secondly, look at the franchises that made Universal’s year.  Jurassic Park is one of the true phenomena in box office history.  American Pie was a $100 million performer on a budget of under $20 million.  And The Mummy was a $155 million performer with a cost of under $50 million.  Now look at Sony’s franchise players. 

Stuart Little grossed $140 million domestic, but cost over $100 million.  To be fair, many mistakes were made on the production and they can get that cost down under $70 million next time out.  Charlie’s Angels, whose sequel went mysteriously without mention in Lippman’s article, grossed $125 million domestic, but cost over $100 million.  While mistakes were made on that production that could be corrected, the cost of re-hiring Barrymore, Diaz, Liu and Murray would more than make up for the savings.  Pretty iffy.  And as wonderful a story as Desperado was, its $25 million domestic gross does not qualify it as a franchise.  (Don’t even get me started on the grotesquery of sub-titling Desperado 2, “Once Upon A Time In Mexico.”  Mr. Rodriguez, I’ve seen Sergio Leone’s movies and you, sir, are no Sergio Leone.)

Men in Black was a phenom and Spider-Man could be really big.  But Sony is already admitting the both will cost over $200 million between production and promotion.  How much more?  And while Spider-Man doesn’t have major gross participants, MIB2 does.  Let’s say MIB2 drops off 20 percent from the original, which is what JPIII did after JPII.  (JPII fell 36 percent off of the original.)  MIB2 grosses $400 million worldwide.  $230 million comes back to the film.  Another $225 million gross in ancillary dollars.  $115 million comes back to the film.  But the gross players take home around $100 million of the haul.  That’s a profit to Sony of about $45 million on an investment of $200 million-plus.  Can you say Pearl Harbor?

On Spider-Man, the same $625 million total gross leads to a profit of more like $90 million.  Of course, all the income above that is more profit than not, so if Spider-Man generates $800 million total, the profit goes up into the $200 million range.  But keep in mind… X-Men did under $300 million worldwide.  Jurassic Park III and Planet of the Apes both did less than $400 million worldwide. 

One of the greatest failures of entertainment journalism is the failure to recognize that big numbers don’t always translate to big profits.  Facade, facade, facade….

 That leaves the movie divisions at Disney/Disney, Paramount/Viacom, Fox/News Corp, Universal/Vivendi and Warner Bros./AOL to discuss.  Universal is the odd conglomerate out in this group, as the company has had a subtext of divisional separation more than synergy, no matter what Curious George says.  (For those of you who just got thrown for a loop, Universal Vivendi has used the children’s book monkey as the symbol for corporate synergy in recent print ads.)   By creating a fiefdom for Edgar Bronfman with Universal Music Group, handing Barry Diller the keys to the TV and film division, handing Steven Spielberg and Imagine Entertainment deals that kept them part of the family, Vivendi has a cobbled together series of assets that, much like the pre-AOL Time Warner, is unlikely to pay more than lip service to real synergy.

On the flip side, News Corp and Disney have consolidated management roles so that everything funnels through a very small group of people.  My personal experience with the tone at Fox goes back to my childhood, when Rupert Murdoch spent hour after hour each week hanging around Channel 5 in New York, personally overseeing A Current Affair’s every step.  Gianopulos and Rothman talk to Chernin, Chernin talks to Murdoch.  No matter how big things have gotten at Fox, the power core has remained intimate.

At Disney, the power structure seems to be getting even smaller.  The well-liked distribution dude, Dick Cook, has taken over the movie production job… which means that Michael Eisner, who has been questioned forever about the lack of a successor or successors behind him, will have even more hands on control. 

Viacom has the strongest television franchises of the studio conglomerates at the moment.  CBS has had a good run, led by Survivor.  Nickelodeon remains a happy cash cow, a few steps ahead of AOL/Time-Warner’s Cartoon Network.  MTV continues to stand alone in its category.  Blockbuster has gotten healthier while the competition has faded… which can’t last too much longer, but Viacom has turned a deal that seemed like a mistake into a win.  Infinity has become the leader in radio.  TNN has done very well with the WWF franchise, though it still needs to settle its image.  And Showtime is not HBO, but it’s not just TV either. 

So why isn’t Paramount swinging for the fences?  Because it doesn’t have to.  If it weren’t for the delayed release of the Tom Clancy franchise film, The Sum of All Fears, Paramount only major summer release would be K19: The Widowmaker.  And it doesn’t get much more high end as the year progresses, with the delayed Skekhar Kapur remake of The Four Feathers joining in a Star Trek movie as the big fall releases.  Yawn. 

Universal was last year’s homerun hitter.  2002 will, no doubt, be a bit quieter.  Spider-Man and Star Wars should get the most summer attention by far.  However, Universal, the studio that, along with DreamWorks’ Deep Impact, established the first weekend of May as the start of the summer season with The Mummy and The Mummy Returns, is pushing the start of the summer movie season into April with the release of The Scorpion King on April 19.  Undercover Brother could be a major sleeper hit this summer and it will be interesting to see whether the Hannibal Lechter prequel, Red Dragon, will open with the heft of Hannibal.  But while Universal has still got a load of familiar material (ET, Charade remake The Truth About Charlie, Red Dragon and The Bourne Identity), this will not be Sequel Summer, Part Two. 

Warner Bros. is releasing over 30 movies again this year… yoikes!  It looks like it could be a long wait until the next Harry Potter movie, which arrives for Thanksgiving again.  The summer is dominated by two animated films based on TV hits, a chick flick and a possible sleeper in what is now called Eight Legged Freaks, formerly known as Arach Attack. 

So how is synergy working for AOL/Time Warner?  It’s an interesting question, one open to a lot of debate.  People were terrified by the way the machine worked to sell Harry Potter.  But the film proved once again that the sales job only works for a weekend or two.  After that, it’s the movie.  And the truth of the matter is that no matter how brilliantly the company can marshal all of its forces for a project here or a project there, Warner Bros. is up to its eyeballs with so much product that it can’t possibly pay the kind of attention to each project that’s necessary, no matter how many media outlets they control.

Okay… time to shut it down again.  I’ll try to tie this all up in a ribbon and move on next week.

SO MANY TIMES:  Does anyone else find it odd that Ice Age is being pushed by Bill Zwecker of the Chicago Sun-Times when the same paper has both Roger Ebert and Richard Roeper on board?  Has the Sun-Times become the center of movie criticism in America (he asked facetiously)?

READER OF THE DAY:  The Assassin Killer writes:  “In one corner, we've got a buddy-cop spoof starring the break-out sidekick from 48 Hrs. reprising his role in a truly bad spoof of cop movies (like Brando in The Freshman, but not) that has the hen-pecked, Dirty Harry-type spoofing a character he's played many times before, played last year in Fifteen Minutes and is playing again later this year in City by the Sea.  There's not a single joke that's not telegraphed, there's not a single scene that doesn't seem like a poor man's version of Lethal Weapon, and the third act looks like they chopped thirty minutes in ten.

In another corner, we have "stock animal animated film" with a group of B-level, not-ready-for-the-summer-time players joking around and going on a mission in a stock setting.  It doesn't matter if it's dinosaurs, mice and their friends, or more dinosaurs, this is so been there-done that that it could only come out in the spring.  But as it's rated G and we're in a dry season, it will make bank as desperate parents hit the theaters with their screaming drone-children.

Finally, we have a super-model running around with a gun playing Aliens, but with zombies.  No A-list stars, low-budget effects, soundtrack over the trailer taken from what they want you to think it is, and the fact that it's a chick-led action game the year after Tomb Raider, so it doesn't warrant a summer release just feels as calculated as anything else.

March 15th actually represents a great cross-section of non-summer crap.  A buddy movie that should've been an A-list summer pic that just proves how crappy it is by hitting in March.  A horror film that they're playing as action in order to avoid that - why-aren't-we-releasing-this-for-Halloween? - trap that could never make it in the summer.  And then an animated feature that doesn't have the oomph to take on a summer weekend (and a studio that's already lost out so many times with summer animation), so they're looking to re-coup in the spring on a few lonely matinees.

But, that's just my opinion.”

E ME:  What’s your opinion?