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Week Of May 14, 2007 - Wed / Fri
May 18, 2007
Ten Things The Studio
Doesn't Want You To Know ...
Numbers 6 - 10 | Numbers 1 - 5HOW MUCH COMES OFF THE TOP TO TALENT?
This is one of those have-your-cake-and-eat-it-too scenarios. Studios want media to report on the box office winners week in and week out. But they don't want anyone to really know what they make or don't make on movies. Every piece of the puzzle that journalists have in analyzing the gross of a film puts us one step closer to having and accurate answer to what the bottom line looks like. And one of the most significant pieces of the puzzle, especially in the last two decades or so, has been gross points.The first movie to do very well at the box office - $300 million worldwide in 1991, which put the film in the Top 30 all-time worldwide for that moment - but to make little or no money was Hook. How could that be? More than 30% of the gross came right off the top. And this was before make-up revenue in sell-thru DVD existed.
Other "just can't get there" gross player problem films include Men in Black II, Terminator III, and most infamously, last summer's Mission:Impossible III, which earned Tom Cruise over $60 million, while Paramount scraped to stay out of the red on their $300 million-plus investment (including worldwide P&A).
These are the highest profile plays. How much is coming off the top on this summer's mega-trio of Spider-Man 3, Shrek The Third, and Pirates of the Caribbean: At World's End? I haven't seen that number anywhere, have you? Even Kim Masters' slam piece in Radar didn't find out what kind of gross deal Raimi or Ziskin or Maguire have. And that's just the way Sony wants it.
Last year, on a film that was, ironically to this piece, low on gross players, Superman Returns, Warner Bros was able to spin it and all of its other summer flops to its best political advantage. Since the New York Times was the spun outlet, few further questions were asked. In the end, the overall loss for the summer - short a few tens of millions of projected revenue that never materialized - was close to accurate. What wasn't accurate was how it was spread out.
HOW MUCH THEY MAKE ON DVDS?
You've seen Top Ten lists for weekly DVD sales, but what you don't see and won't see are hard numbers on DVD sales. They aren't published and they are only offered to the press as a promotional device for the very successful releases. And even those promo leaks have become more limited after Shrek II caught DreamWorks Animation's tit in the wringer when returns turned out to be dangerously massive.The reason the studios don't want you - or me or agents - to have these details is simple. Once again, they don't want you - or me or agents - doing the math. The amount of scrutiny studio finances are under now because of openly available grosses each week is not only a publicity nightmare, but it is one of the reasons why movies don't get time to build momentum anymore. But that's a different conversation ...
The freedom to play with the P&L statements is a direct reflection of public accounting. The irony is that the film business has more public scrutiny of the numbers than most already, as most businesses are limited to explaining quarterly and year-end statements to the public and those who have a more intense interest in the real numbers..
HOW MUCH IS CHARGED BY THE STUDIO FOR "OVERHEAD?"
The greatest mystery figure in Hollywood is Studio Overhead. Some would tell you it's very simple ... a studio has am annual budget and they split up costs between the movies they produce by setting an overhead cost into each budget. Others would tell you that they hide a ton of "free money" in overhead, particularly in an effort to short net profit participants. And of course, as embodied by Eddie Murphy calling them "monkey points" decades ago, the accounting departments do everything they can to avoid every playing a single net participant.The mystery of overhead is simply that there is no account ability for it. The number is stuck on the budget. It may or may not be relevant to the actual overhead associated with that movie. But if you want to fight for your net, you better find another avenue of attack. And as long as the public has no idea about this charge, there is no real basis for establishing industry averages and therefore, no way to fight this funk.
HOW MANY SEATS ARE AVAILABLE ON A GIVEN WEEKEND?
We don't even get real theater counts these days, how do you expect seat counts?Well, the real coin of the realm is the seat count, not the theater count. And the industry's long-held ugly little secret is that theaters are mostly empty, even on successful movies. A $10,000 per screen count, even at face value, means that a few less than 1500 people saw the film on each screen in the screen count. Given five shows a day over three days, that's 100 people per screening. And that is a good number.
Look at the massive opening of Spider-Man 3. They had a $35,540 per screen on that $151 million opening weekend. However, the real screen count was about 2.5 times the official 4252 screen count. So the real screen count was about $14,000. That's under 150 people per screening.
On that same weekend, the Top Ten included Are We There Yet?, with a $1023 per-screen on 1704 screens. That's about 10 people per screening. (It may be a little higher, because after 5 weekends, the film might not have been on an all-day screening schedule in many of its theaters.)
So how does that look?
The system is working in many ways. But perhaps this might make the $5 popcorn and the dearth of ushers make a little more sense.
HOW MANY FILMS DOES THE STUDIO DUMP EACH YEAR?
No studio will ever admit that it is dumping a film. They get all defensive. They maintain the posture. It could be that they are afraid that somehow, against all odds, the film will find and audience and they will be humiliated by their inaction ... or in a case like Duma, critics around the country will beat them publicly for months on end.But look at April of this year ... Pathfinder, Kickin' It Old School, The Invisible, In The Land of Women, The Condemned, The Reaping, and Firehouse Dog. Dump-A-Rama.
Of course, all of these films were opened on more than 1000 screens. And spend nearly nothing on marketing. Welcome to the new dumping ground.
The "P" in P& A isn't cheap ... but it is the "A" that really adds up. And there are more films now than ever that are being made by independent financiers who set up distribution with a screen count obligation. They also make commitments to P&A ... but they worm out of it ... more often than not, it seems. This is not always the case. Sometimes studios just screw up or simply can't find the hook to get anyone interested in a film. Fox's expensive flop, Pathfinder, sat and sat and sat until they hoped to ride the 300 wave into some kind of box office. It didn't work.
Miramax under the Weinsteins had the great idea. They used Disney's Blockbuster deal, which set a guaranteed number of DVD/Video units bought for every title the studio owned, and started buying really cheap completely product and made a profit without spending a dime on theatrical, just on the Home Entertainment. Blockbuster sued and I believe a settlement was made. But the concept lives on.
The new hot thing is Home Entertainment actually buying films with the promise of potential theatrical distribution. But that theatrical almost never comes. Also, there are a lot of studios that make small investments and voidable distribution obligations and wait to see the film. If it doesn't fit, they don't commit. But they may keep the DVD.
The high profile Christian cinema movement is almost completely a DVD game. Thing is, on a movie like one of the Left Behind series, Sony Home Entertainment may well spend $3 million on DVD-only P&A. Home Entertainment has become a big budget business. It's not theatrical, but it is a real push. Meanwhile, Sony also has investments around the world (Asia and Germany, amongst others) that will earn enough without American theatrical, but hold the premise of one or two American releases each year. They aren't dumping any of the product that doesn't get a significant theatrical release ... because they don't have to ... it's pre-dumped.
Thing is, if you know the machinations of all of this, the ability to maneuver is limited. Flexibility is dependent on your ignorance. And when you see The Assassination of Jesse James by the Coward Robert Ford, give me a call.
E Me.
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