The
Hollywood Economist
The
numbers behind the industry.
Neither
The Power Nor The Glory
Back
in the old days of the studio system, the brand of a Hollywood
studio meant something to the moviegoing public. Each studio,
with its roster of stars under contract, came to be identified
with a particular genre of movies: MGM (musicals and romantic
comedies); Paramount (historical epics); Warner Bros. (gangster
stories); 20th Century Fox (social dramas); Universal (horror
movies); Disney (cartoons). Today, the studio names mean
little to audiences, but they matter a great deal to the
handful of owners who control most of the multiplexes in
America and Canada.
These
owners know that the six major studios—Disney, Warner
Bros., Paramount, Fox, Universal, and Sony—can supply
not only a movie, but the publicity campaign capable of
driving a herd of moviegoers from their homes to the theater
on an opening weekend. The studios have this capacity because,
unlike independent film producers, they control when, where,
and how the movie will be released, starting from the day
it goes into production. With this control, the studios
can shape the movie to fit the requisites of the marketing
campaign, fusing both product and publicity, like Siamese
twins, into a single entity. This carefully calibrated movie
product can then be used to recruit multimillion-dollar
merchandising tie-ins, such as with McDonald's. The studios
can also insert "teasers" in the coming-attraction
reels (which they control) to build audience awareness.
Finally, the studios have the resources to commit up to
$50 million in prerelease advertising on a single movie.
(In 2004, the studios spent, according to the MPA numbers,
$34.4 million per movie, on average, on U.S. advertising
and prints.)
The
marketing campaign has become crucial for theater owners
because the names of big stars can no longer be relied on
to automatically draw a large audience. Unlike the old days,
when just the mention of Clark Gable or Carole Lombard on
a marquee was enough to guarantee a big turnout, nowadays
a star's appeal can fall flat unless it is incorporated
into a studio-sized marketing campaign. Consider two consecutive
romantic comedies with Julia Roberts, today's highest-paid
actress; one an independent release, the other a studio
release. The first, Everyone Says I Love You, released
by Miramax, brought in $132,000 on its opening weekend.
The second, My Best Friend's Wedding, released
by Sony, brought in $21.7 million in its opening weekend.
Both films had the same star actress, same genre, same romantic
twist—but one film drew 150 times as many people to
theaters as the other. Next, consider two consecutive movies
starring Mel Gibson. The first, What Women Want,
was released by Paramount and brought in $33.6 million in
its opening weekend, while the second, Million Dollar
Hotel, released three months later by Lion's Gate,
brought in $29,483. A thousand times as many people went
to see the opening of the studio product, although both
starred Gibson. Even if Roberts' Everyone Says I Love You
and Gibson's Million Dollar Hotel had been vastly
superior movies to their studio counterparts (and I believe
they were), the results would have been the same. These
films played in only a handful of theaters, while My
Best Friend's Wedding opened on 2,134 screens and What
Women Want opened on 3,013 screens. For the independent
films to have opened "wide" as their studio counterparts
did, the distributors would have had to convince the theater
chains that they had the wherewithal to provide the kind
of massive marketing campaign that it takes to fill 2000
theaters with popcorn-eating audiences—a next-to-impossible
undertaking.
Independent
films are a totally different enterprise than studio films.
They are typically made before they have U.S. distribution
and with independent financing. Therefore, the producer
does not know when, if ever, the film will be released in
theaters. So, unlike studio films, independent films cannot
be conceptually geared to a marketing campaign, or used
to recruit merchandising tie-ins. Independent producers
therefore have only a singular product: the movie itself.
To find a distributor, they often have to show their movies
at film festival after film festival. And even after they
find a distributor, it can take months, or even years, before
the film is released in theaters. At that point, if the
film is to succeed, it must create its own audience through
reviews, awards, and word of mouth. Such acclaim often proceeds
from the originality of the film, such as, for example,
Sideways, Lost in Translation, and Eternal
Sunshine of the Spotless Mind. So, while studio films
are rushed through postproduction editing to meet their
release schedule, an independent producer must keep re-editing
a film, no matter how long it takes, until the film works
perfectly. As a result, independent films win much of the
glory and awards—and studio films win most of the
gold, taking in well over 80 percent of the box-office proceeds.
But,
unlike its movies, the ending is not a happy one for Hollywood.
Due to the high cost of worldwide marketing, the cost of
the studios' average product, which in 2004 exceeded $100
million, greatly exceeds what they get back from their share
of the box office. Fortunately for the studios, a few films
each year perform much better than average, and it's these
Midas-touch movies, such as Spider-Man, Pirates of the
Caribbean, and Mission Impossible, on which
the studios now earn almost all their profits. Since the
publicity campaigns for these mega-blockbusters have proven
effective in the popcorn economy, studios recycle their
elements into endless sequels, and leave originality, and
all the joy that comes from it, to the indies.
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