Hollywood Needs to Yell, "Cut!"


By Ronald Grover It wasn't the opening weekend of yore for a blockbuster-in-waiting. My wife and I had gone to our local theater to catch Batman Begins, the long-awaited next installment of the Caped Crusader series that stalled after 1997's Batman & Robin. Problem was, there weren't any lines outside our Pasadena (Calif.) movie house. And that apparently held true at many other theaters where it was showing. Batman Begins swooped up about $46.9 million for its opening weekend -- far less than most pundits had anticipated. Clearly, this was one bat that didn't arrive with enough buzz.

With the exception of George Lucas' Star Wars: Episode III -- Revenge of the Sith, there hasn't been much box-office scintillation this year. In fact, other than for Lucas' iconic blockbuster, I haven't seen a decent line outside a movie theater all year, despite the usual barrage of TV ads for such heavily hyped flicks as Madagascar, The Longest Yard, and Mr. and Mrs. Smith.

And with Batman failing to excite folks, the numbers of movie tickets sold in the most recent weekend fell behind those of last year for the 17th straight weekend, making for the worst box-office swoon since 1985. Whether they want to admit it or not, movie moguls are in trouble.

SERIOUS SLUMP. Hollywood folks, of course, don't see it that way, even though the box-office take so far this year has decreased 7%, to around $3.8 billion, while the numbers of tickets sold are off by 8%. They see it as a temporary thing, an annoying blip. John Fithian, head of the trade group National Association of Theatre Owners, points out that this year has seen seven fewer wide-release big-budget films, and each, he says, could have been counted on to do $40 million or more at the box office. And there's a consensus that last year's numbers got an artificial boost -- call it a box-office bubble -- from Mel Gibson's Passion of the Christ, which brought in busloads of people who might not have normally gone to the movies.

Pardon me if I demur. The fact is that box office -- at least in terms of the numbers of tickets sold -- has been in a funk for five of the last seven years, according to figures compiled by the Motion Picture Association of America. And if the current trend holds, the number of tickets sold will drop to 1.4 billion in 2005, the lowest level since 2000. The MPAA says folks watched an average of only 5.2 films in the theater last year, also the lowest figure since 2000. Tom Rothman, co-chairman of Fox Studios, is the only one who admits that the studios "aren't making the films that are hitting the imagination of the moviegoer."

It's still possible that some of the movies yet to hit theaters can drum up big audiences. Steven Spielberg's War of the Worlds opens on June 29, and the Marvel-inspired Fantastic Four will make its debut July 8. But even if both prove to be off-the-chart blockbusters, they probably won't be able to redeem the box office this year, and they would offer just a temporary respite from a much longer-term problem. Hollywood has to rethink what it's putting on the screen. Here are some suggestions for how to goose its plight:

1. Release DVDs much earlier.

Movies used to come out on video five or six months after they hit the theater. Today, DVDs make their appearance an average of three months after a film opens, according to industry newsletter "DVD Release Report." With ticket prices headed past $10 in most markets, folks increasingly are waiting for the movie to hit their local Blockbuster (BBI) or Wal-Mart (WMT), figures Amir Malin, a former CEO of Artisan Entertainment.

Hollywood studios make boatloads of money from DVDs -- roughly $12 from a $24 DVD. And disk sales are still growing while the box office sputters. So, why not take advantage of the money spent to market a movie when it opens by shortening the time between theatrical and home release to say, six weeks? Pushing the DVD and video versions at the same time would likely cut the $10 million studios now spend to gin up a new advertising campaign once the DVDs hit the market.

Better yet, let the audience decide. Serial entrepreneur Mark Cuban has it right. Cuban, who owns the Landmark Theaters and produces his own films, intends to release films in theaters and on DVD the same day. "Give the consumers what they want," he says. As for the rest of Hollywood: "Studios will follow the money," he says. If Cuban's model works, he won't be the only one doing it.

2. Cut way back on the sequels, TV remakes, and copycats.

That's easier said than done. The Star Wars flicks deserve a special place in film folklore. So, too, do the James Bond and Harry Potter movies, and a handful of others. But even though the bona-fide, must-see franchises are few and far between, movie executives have gone into remake overload. They seem to think they need a well-known movie title to break through the clutter -- and hang onto their jobs.

An unusual, surprising, one-of-a-kind piece of entertainment will continue to lure folks to the big screen. This year, Warner Bros. (TWX) bombed big-time with a second Miss Congeniality flick, a follow-up up to its clever 2000 cop-turned-beauty-queen comedy starring Sandra Bullock. Miss Congeniality 2 did only $48 million, vs. $106.8 million for the original. At the same time, Hitch, starring Will Smith as a love doctor, has collected north of $179 million, and The Pacifier, with Vin Diesel playing a former Navy Seal who turns into a bottle-toting babysitter, has grossed more than $112 million. You figure it out.

All you have to do is look at TV these days to know that imagination is alive and well in some corners of Hollywood (gosh, how I never thought I would write that sentence). CSI, 24, and Desperate Housewives show that something new is always out there for those who try hard enough to find it. (And before you complain about the multiple versions of Law & Order and CSI, remember that TV is episodic.)

The problem is, what the movies are taking from the small screen are the small-screen shows themselves. And that's starting to get old. Cedric the Entertainer in the Jackie Gleason role in Paramount's (VIA) The Honeymooners? Please. The studio should consider the movie's $5.5 million opening weekend a gift. And watch out: Word has it that Paramount's next TV-show-turned-movie, Bewitched, is pretty darn bad, too.

3. Look at your audience.

For all its fancy audience-testing techniques, Hollywood seems to be ignoring the simple fact that, like the rest of the population, ticket-buyers are aging. The numbers of moviegoers 40 and older increased by 2% last year, and they now make up 43% of the theater-going population, according to a study by the MPAA.

And for the first time, nearly as many folks over the age of 50 are going to movies as those ages 12 to 24. The younger viewers, who watch more movies, are also the ones tempted to wander off to video games and the Internet. But a large segment of the, ahem, older population -- like me -- is finding fewer and fewer things worthy of seeing on a Saturday night.

It's time for Hollywood to make a lot fewer PG-13 action flicks -- which usually cost at least $100 million and are starting to look a lot alike -- and make more smart, modestly budgeted films aimed at the 40-and-over crowd.

Some of the biggest surprise hits in the last year or so have been films that spoke to the more mature moviegoers: last year's Sideways, and this year's New Line comedy Monster-in-Law and Lions Gate Films drama Crash.

The lessons here are that a good story still sells, and the budget doesn't have to be so large that it makes a studio tremble. I'm not saying that there's no room for big-bucks movies or that studios should aim low, forget about blockbusters, and throw all their weight behind DVDs. But it's going to get awfully lonely at the local theater if they don't start rethinking some things. Grover is Los Angeles bureau chief for BusinessWeek. Follow his weekly Power Lunch column, only on BusinessWeek Online


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