ASK & DISCUSS INDEX

12 years, 1 month ago - Guy Ducker

Gentlemen,

I agree that the irony of Spielberg and Lucas's complain is entertaining, but there is a bigger question here: would the fewer and bigger model work? If not, what way forward for cinema? I've written a little blog on the subject:

http://cuttingroomtales.wordpress.com/2013/06/23/the-spielberg-prediction/

I look forward to hearing what you good people think.

Guy

12 years, 1 month ago - Nick Goundry

It seems to me that the point of the comments from Spielberg and Lucas has been misinterpreted. They're not criticising Hollywood production budgets (nor should they, necessarily), but rather the fact that studios are less willing to take risks, and I agree with them.

Lincoln was a challenge to get into cinemas because it was a historical biopic, Red Tails focussed on black pilots, which studios thought equalled a niche audience, and more recently Soderbergh's Behind the Candelebra's gay subject matter was considered alienating for a large audience, which was why it failed to secure a theatrical release in the US.

The "implosion" Spielberg and Lucas warn of would be from cinemas charging much higher ticket prices for big-budget, broad-appeal movies in order to minimise the chances of box-office failure and to cover production costs more effectively.

I don't think it's so easy to conclude that Spielberg and Lucas themselves have contributed to the problem.

Their comments were that even successful filmmakers - including themselves - now face a challenge getting some of their movies into cinemas because studios have found their products too risky in one way or another. That's a sign of a studio culture where executives are increasingly wary of any material that doesn't connect with the broadest possible audience. Spielberg and Lucas are both guilty of making big movies that connect with massive audiences and they certainly created the modern blockbuster, but isn't the bigger problem a lack of strong storytelling on the big screen?

I'm interested in how we think the "implosion" of the modern film industry and higher ticket prices for big movies would be a good thing.

12 years, 1 month ago - Dan Selakovich

Well thought out, as always, Guy. I don't know what the new paradigm would be. Or should be. I personally long for the good 'ol days when mid-budget films existed. As I've talked about before, the Polygram model worked beautifully. It didn't fail, but rather a light bulb company just didn't understand the film business when they bought out Polygram.

12 years, 1 month ago - Paddy Robinson-Griffin

Just a small side note, but I think an important one when talking numbers - the numbers you see in the press are not the actual production costs in hard dollars, they are just big, approximate numbers that attract people, and have a lot of secondary and tertiary costs folded into them as well. It also doesn't tell you who gets paid when, so there ate likely some inflated back end deals in those figures. Colgate don't tell you how much it costs them to makes toothpaste, BMW keep schtum about the actual cost to produce a mini, when you think about it, why would a studio give away their commercial secrets?

Box Office Gross - the clue is in the name. Gross means 'including everything' (taxes, wages, petrol, distribution costs, house cut, promotional materials, whatever), so it is absolutely not useful on its own as a measure of profit of the film, although it is an interesting indicator. Worse still is the opening weekend gross, which only really tells you how well the film was advertised. Neither tell you anything about downstream markets, PPV, airlines, Blu Ray, TV repeats, etc., which is where films do most recoupment.

So we have the comparison of an inflated secret number and crude indicator of expected secondary revenue based on how many bums on seats they get into actual cinemas. You have to be very careful when using these numbers, remember only a handful of key financial executives will ever know for certain which films made most profit. It certainly isn't as simple as taking the $85-$90M figure you see in the papers (as if the studio accountants don't know to the cent what it cost, and would tolerate accounts within a few million bucks!), then on the other side of the equation the box office gross, and saying profit or loss. Spielberg makes money for people, thats why he's still working.

12 years, 1 month ago - Francisco Silva

Spielberg didn't peak financially with E.T. Financially, after Jurassic Park 2, he had great successes with the likes of Minority Report, War Of The Worlds, Catch Me If You Can, Munich, Saving Private Ryan, Tintin and Indiana Jones And The Kingdom Of Crystal Skull. Even Lincoln gathered more that $250M worldwide for a production of barely over $60M.
The indictment here is, would've Lincoln made money if it hadn't been nominated for the Oscars? And would that have happened if the distributor hadn't released in that window?

Your article is filled with fallacies, Vasco de Sousa.

12 years, 1 month ago - Francisco Silva

@vasco de sousa
Let's go one by one, then. First of all, the character of Lincoln is a rich and appealing to A audience. "very few of us want to watch a movie (about Lincoln)" isn't true, $275M-worth worldwide just did. Some of the books about him are also best-sellers - "Team Of Rivals" and even Gore Vidal's "Lincoln", to cite just two of them. Yes he can carry one entire movie, of course he can, his actions were at the centre of the only civil war in the US and the lead to the Emancipation Proclamation. We are not talking here of numbers for a worldwide event, but a solid audience. Yes the Oscars may have helped a lot but then The Hurt Locker won the Oscar and didn't reach a fifth of Lincoln's success.
He's not painted as a Christ-like figure, and even if he was Spielberg's film, mostly due to Kushner's script, manages to humanize the character with great success. Hinting at Lincoln's depression was a bold move, the man was a notorious chronical depressed. But okay, most Lincoln films failed in the box-office, most Lincoln films weren't as good as this one. I'll argue that Redford's The Conspirators (though not directly about Lincoln the person) was very good but suffered from a poor marketing campaign.
Joan of Arc difficult to portray? Avoid Luc Besson's film and check the amazing "The Passion of Joan Of Arc" by Carl Theodor Dreyer. Common title in the list of best films ever made.

Give Tarantino some credit, there. His films are more complex than just "popcorn flicks", and what are you talking about offending critics? He's a critic darling, "Inglorious Basterds" sits at 88% on Rottentomatoes. Added to this no historians were offended by his re-writing history. His films are fantasy and everyone knows it, part of the appeal is the catharsis of who unexpectedly dies in Basterds. The only sales pitch Harvey Weinstein cared was Tarantino's name, not "piss-off critics and historians", historians have a sense of humour, critics gave Oscar nominations and art cred to the film.

Munich and Shindler's List did very well, even with the awards and counting with the inflation. Did you see 1941, though? It's not "kinda like Red Tails" and it failed miserable because it wasn't funny (alright I admit a soft-spot for the film, though). It was panned by the critics even before it hit the cinema. But wait, what about Amistad? Let's go back to the "inflation" conversation and how obnoxiously patronizing your comment about it was. Here's the thing, inflation or not, the maths is the following - if it costs X and it made > X in the box-office then let's count the film made money and was therefore a relative success. To make things easier, let's remove international numbers. So Amistad cost $36M and performed $44. Not shattering, and we're not seeing here the numbers for marketing and promotion but, still, Not a catastrophe as well, especially since the only famous actor in it was Anthony Hopkins, hardly a name that draws a big audience.

I don't understand the paragraph about Scorsese and Gibson directing films about Jesus Christ. First of all, they're both Christians (Scorsese is catholic, even). And secondly both films weren't pandering to market niches. Actually Scorsese's Last Temptation Of The Christ was deemed anti-catholic and led to protests in front of cinemas. Non-believers were especially drawn to it (I know I was), not at all a "lifeless heep of hypocrisy". Passion Of The Christ was a gigantic success, mostly due to its controversy. Believers loved it, ask my grandmother.

Okay, I agree it may be difficult to fund a biopic but that wasn't why Spike Lee had problems to find funding for Malcom X. First of all both Lee and Malcom X are very controversial charaxcters. Secondly Lee WAS NOT a successful director at the time. Not to say his movies didn't make money, some did considering they were very low-budget productions. In fact the only notorious film he had made before was "Do The Right Thing". For Warner Bros., who had the rights of Malcom X's story, betting on Spike Lee was definitely a risk. That's why investors weren't keen on it.

Django Unchained is not "almost a western", it's a western. Give him some credit, though, the film was set for success even before Spike's bickering. And, okay, Daniel Day Lewis may not attract the popcorn audience but then again "Lincoln" is not a film for that audience. It's irrelevant to bring that up, like accusing Fast & Furious for not trying to win an Oscar.

It's interesting the idea of "civil war films are usually told through the perspective of the south". Will not consider that an unbroken rule, it's just a curiosity probably related to some American story tradition. Do not believe it's because "the North just doesn't sell". Perhaps even because the war was, in the end, fought in the South.

Lincoln is NOT like the Dalai Lama. And Spielberg still wants to make big budget films. Actually he has been dangling between big blockbuster to personal picture since "Empire Of The Sun". Two films before "Lincoln" he made "The Adventures Of Tintin", the movies he has set for after are "American Sniper", "Indiana Jones 5" and "Robopocalypse". There's your "big budget spectacles that made them famous".
And here's the thing, Lucas's story is vastly more complex to even go here. And, adjusting to inflation, its still a little bit unfair to claim ET was the peak of his financial success. After it, "Indiana Jones And The Temple Of Doom", "Indiana Jones And The Last Crusade" and "Jurassic Park" were the most successful film of their years. Let's look at other numbers, then: in 1997 "Jurassic Park 2: The Lost World" was the second highest-grossing film of the year, losing only to Titanic. In 1998 "Saving Private Ryan" was the second highest/grossing, losing only to "Armaggedon". In 2002, "Minority Report" was #10 on the same list. "War Of The Worlds", #4 in 2005. "Indiana Jones And The Kingdom Of The Crystal Skull" was #2 in 2008. I dare the writer to find a director with a better run in the past 30 years. Even films that didn't make it to the charts ("Catch Me If You Can"; "The Adventures Of Tintin"; "The Terminal") made quite a lot of money, and this is not considering films Spielberg produced, like "Transformers", "Men In Black" or "Shrek". I'm sorry but Steven Spielberg is still a big player in Hollywood.


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Here's my problem with the entire article - it leads to nowhere. Is he trying to justify the thought process behind the difficulty of the Production Company to finance his project? Because the numbers speak for themselves, they were wrong, the film made its money back and then some. Is he trying to claim that personal projects, small films and biopics are not financially viable and have no place in a film theatre? Are investors only supposed to bet on "popcorn films" (sic)? Because, again, "Lincoln" was a respectful success!

Above all, he doesn't address the main issue here - the fact the film industry will eventually implode if it continues with the system. Spielberg's idea of every distributor choosing how much to charge for its films is the same one Roger Ebert had championed a couple of years ago, and probably the best way to preserve the right smaller films have to fight for recognition.
In the last paragraph he says "The fan base now tends to watch their films on TV or DVD", and, well, the fan base DID go and see "Lincoln" in the cinema. But I see the point of shifting to home entertainment. And you know what, there's another reason for this and that's a completely different story.

12 years, 1 month ago - Peter Ward

That's a good point. But I wonder if studios are actually even trying to make money, period. One would have to investigate where financing actually comes from--and what the motives of those investors are--to know. As with the rest of the economy increasingly, a lot of the money may come from speculators (giant firms, really) who's supercomputers move money around so fast it really doesn't matter how the product turns out--they just need to inflate the share price for a few milliseconds and sell (or, better yet, "short sell").

I also know the Pentagon pumps a lot of money into H'wood. A friend did a dissertation on it; I can't recall the exact figures--billions, annually, IIRC. Again, as with Boeing, who cares if the product sells? either way you get paid--and taking a nominal loss helps come tax season.

12 years, 1 month ago - Vasco de Sousa

Thanks Richard.

I also see the value of Art House cinemas. They seem in danger in parts of Europe (and here in Wales), where public funding used to be a great source, but now they feel they have to go more "commercial." It's been a long time since I've been to one in the USA.

12 years, 1 month ago - Vasco de Sousa

@Francisco Silva In the blog, Chinny says its adjusted for inflation and population. It's not full of fallacies, most of the information can be found on Box Office Mojo or back issues of Variety (except for Glory's poor European performance.) So, if you actually read the article and find a fallacy, Francisco Silva, let me know.

I guess we need more people to understand concepts like inflation. Not just in the film industry, but in general. Poor economic education could be hurting the economy.

And the academy awards have helped Speilburg's history films (in fact, most history films have trouble standing up on their own, which was part of the line of the article.)

12 years, 1 month ago - Vasco de Sousa

@Dan Selakovich Okay, here's probably the points that Dan and Fransisco probably didn't get.

1. Civil War films have always had an uphill battle to get released (and often get a very small release if anything.) I enjoyed The Conspirator too, it was not about Lincoln though. Check out how many are made per year, and how many civil war books are released each week, and you'll start to get an idea of how saturated the market is.

2. The major box office success of the old films. If you figure things for inflation, you'll see that Speilburg's films don't bring in as much money as they used to, and the gross is going down. Understandably, the money men will be less willing to invest.

3. Chinny McGringo is meant to be a bit silly here. Yes, it's condescending to curmudgeon attitudes.

4. Lincoln and Red Tails had no real controversy attached. For a Red Tails comparison, see the in-some-ways excellent but poorly received Windtalkers. Or, the slightly tolerable non-John-Wayne "Alamo" movie that came out recently.

As far as the 100 million to do a comedy goes, Speilburg and Lucas didn't create that. The star system existed since the days of Chaplin, or really since the days of the stage. Chaplin got a million per picture or something like that at one point, and if you figure that for inflation... (Sorry to sound condescending here.)

There have been ups and downs.

The recent high prices was partly due to the break up of the studios, which gave stars (and screenwriters) more power to negotiate on their own behalf, but less job security. The big agencies have a lot of power now.

Something similar happened in British football. It's also happened in a way in the IT industry, in banking, and even with defense contracts.

In other words, the film industry is not unique. Small businesses in every industry, from supermarkets to bookshops, are finding it increasingly difficult to compete (unless they get big fast).

12 years, 1 month ago - Vasco de Sousa

@Francisco Silva Francisco, the point of the article was that it shouldn't be surprising that Speilburg and Lucas had difficulty in getting their films into the cinema. Just because they had a bad experience, that doesn't mean the next Lucas and Speilburg will. Tarantino didn't have the same problems with his film, for instance.

The article pointed out that others had the same problems before. This is not a new phenomenon.

12 years, 1 month ago - Jan Caston

I read this article and roared with laughter. WHO out of the directors in the last three decades has done most to BLOCKBUST everyone else out of the water! Hypocritical or what!!!

12 years, 1 month ago - Dan Selakovich

I don't know about that Peter. Heads do roll when profits don't. As for the Pentagon, yes, it is true, but not in hard cash. Any film that can help the recruiting of 18 year olds into the military is helped by free stuff for the filmmakers. Like planes, battleships, etc. It really does amount to billions in military hardware and people, all for free. BUT the pentagon has to OK the script: it must meet their propaganda bottom line. Scripts are often re-written to make the military happy so that the studio can get their hands on all the free goodies. I've never heard of straight cash from the government to hollywood.

12 years, 1 month ago - Richard Woolfenden

An interesting blog piece Vasco. I also enjoyed this one: http://bit.ly/16eCOjo.

12 years, 1 month ago - Dan Selakovich

@Francisco Silva
Thanks for this, Francisco. Couldn't have said it better. Vasco's piece was a bit confusing for me, and I found myself disagreeing with just about every paragraph. Besides, really off topic. Like Jan, I was amazed that Spielberg and Lucas didn't see the irony of slamming a system they helped create. Studios have all but abandoned the mid-level feature, opting for spending obscene amounts of money betting on a dozen tent-pole features. Even cheap to make comedies are costing upwards of 100 million. It's madness. I think it's high time studios adopted the Polygram model, which was successful until a light bulb company bought them out.

12 years, 1 month ago - Dan Selakovich

Oh, I think we get it, Vasco. But what do historical films have to do with the implosion of the film industry?

As for Chaplin making a million bucks a picture--nonsense. Gold Rush was his most expensive picture, and the most expensive film made at that time. It's entire budget was 1 million. His biggest contract was for $670,000. Adjusted for inflation in todays dollars would be 8.6 million. (Hardly the 22 million price tag of Bruce Willis or Jim Carey). And that was for a year of pumping out 2 reelers every 4 weeks--not for a single picture. But it's easy to find anomalies to prove a point. Taken as a whole, the industry has never been in the position it is in now: where budgets over 100 million are commonplace.

Taking all of Spielberg's films and lumping them together as a whole is silly. You can't compare Jaws to Lincoln either artistically or financially. They are drastically different films, genres, and appeal on completely different levels to an audience.

You're also not taking piracy into account. Piracy costs the major studios 6 billion a year. You simply can't look at box office and say "there are ups and downs." Or that Spielberg's films are making as much. Shutting down just one pirate site, Megaupload, boosted the studios' bottom line 6-10 percent. And that is just one site. There are thousands of pirate sites. This new digital world has forced studios into making tent-pole features exclusively to try to get asses in seats before the thing is pirated.

The "breakup of the studios" as you put it, happened over 50 years ago. Film and talent cost didn't go through the roof until about 10 years ago. And as a whole, the price of a day player, or below the line people has gone down. A character actor, for example, in 1990 could easily command 10,000 a week. Now they are lucky to get scale plus 10. The unions have been forced into modified budget agreements that get the members less money, not more. It's a race to the bottom except for a handful of star actors and directors.

I never said Spielberg created the 100 million dollar comedy. But he did create the modern blockbuster. That's just common knowledge. What we're talking about here is the madness of film budgets. Even with a modest, by today's standards, 50 million dollar film. That film is really a 25 million dollar film. Basically half that budget goes to paying star salaries. So you're left with 25 to actually make the movie. Why? Because stars don't take back-end deals any more. Why? Because they know piracy will take a huge chunk of that. You don't make nearly as much off DVD sales as you used to. And forget legit streaming sites like netflix. They don't pay shit for streaming.

I've been alive long enough to see the industry change from the inside. When I first started, a film had time to find an audience. Now if the opening weekend doesn't meet expectations, it gets pulled pretty quickly. Indie films could count on a decent run. Now distributors open a film in NY and LA just long enough to push DVD sales. Long gone are opening an indie film in 10 cities.

Vasco, you act as if this has been normal forever. It's not. When I started, a 10 million dollar film was commonplace. In fact 7-10 million dollar films were my bread and butter. Adjusted for todays dollars, that's 27 million. Name one STUDIO film that was 27 million or less last year. Just one.

BTW, Windtalkers and Alamo were shit films. Their lack of success had nothing to do with them being "historical."

12 years, 1 month ago - Vasco de Sousa

No, Speilburg has pretty much been downhill for the last three decades. Economically, he peaked at ET, and after JP2 he's gone less commercial and more for the artsy/mature stuff. This year, Tarantino beat both of them (in Box Office terms). The last decade belonged more or less to that Canadian guy.

I've responded here:
http://ptara.com/2013/06/18/is-big-hollywood-a-thing-of-the-past-or-is-speilburgs-history-just-unpopular/

12 years, 1 month ago - Vasco de Sousa

Guy,
I read through what you said about Netflix and all, and I wonder if that's not the same as television, or even radio.

I think what Dan was talking about was well illustrated here: http://www.businessinsider.com/hollywoods-huge-movie-budgets-2013-3

If Hollywood risks and loses too much money, then the big studios will make losses and have to lay people off.

What he is saying is that Universal's "The Purge" is an exception in a world where budgets have to be high.

We still like going to the cinema, and I watch classics in the cinema sometimes. Just as we still go out even when we can have a microwave dinner or order pizza. (As people get older, however, they tend to stay in more.)

What we don't like is having to pay for 3D glasses and all kinds of extortionate ticket prices, which Speilburg hinted at.

Anyway, thanks for your viewpoint.

Vasco

12 years, 1 month ago - Dan Selakovich

Thanks for the article, Vasco. I hadn't seen that. Yep, that's what I thought Spielberg et al were on about. What seems crazy to me, is that studio heads EXPECT to have more films that they produce lose money than ones that make money. It's expected. They also expect those that do make a profit, to make it HUGE in order to offset the loses of the majority. But because the budgets are so huge, 12 films is the max they will produce. It's also important to keep in mind that the budgets listed are only the production budgets. Advertising is another bankroll of millions. So my confusion is this: why not make 36 40 million dollar films to spread the risk? Things are getting out of hand, and it will end badly.

12 years, 1 month ago - Dan Selakovich

Paddy, that's not entirely accurate. For example, box office gross is the amount of ticket sales. Period. It was nothing what-so-ever to do with taxes, petrol, wages, etc. Industry estimates of budget, in my experience, are typically accurate. If anything, the cost estimate of any given picture is conservative. Keep in mind, this is a Production Budget, not a P and A budget. They are two separate things.

Also, it's quite a bit more than a "hand full" of executives knowing the true cost. Producers, Production Managers, production accountants, directors and 1st ADs tend to know the budget down to the penny. And each department head will know the budget of their department--keenly aware. Outside the production, the respective Unions will know the budget of a film--and are given the budget by the producers because there are different tiers in union contracts based on the budget of any given film.

Studios are public companies, so hiding revenue isn't like it was in the old days. Where it DOES get murky is the way studios report this income. They lump ticket sales, DVD sales, and television licensing into a single category called "studio entertainment." So it's hard to know what each division made. They DO supply the motion picture association with these internal numbers, but they never reach the public eye.

The hopeful goal for a studio is to break even on a theatrical release, which basically means making double the production budget. Where the real money comes in is TV licensing. It's that, not dvd sales, where the studio makes its biggest profit. And that's not just current titles. Big studios that have been around for awhile have a library of titles that keep the money rolling in. That's why it was so hard for Dream Works to make money; no such library. One of the reasons they sold themselves to NBC Universal.

You can tell much from the opening weekend gross, but the main reason studios put so much stock into it is because they make a larger percentage of ticket sales the first week. Each week after a release, their percentage drops. Nowadays, since ticket sales are computerized, you can ALMOST tell in real time how you're doing. It's not quite real time, but you certainly don't have to wait until Tuesday to find out how you did with gross ticket sales. Sunday night, you'll know (with a few stragglers monday morning). Industry bean counters can get a really good idea about how much a film will make based on the opening weekend. So it's not as vague as you make it out to be.

If it were 1970, I might agree with you. But studios now are parts of larger conglomerates, and there is a science behind production budgets, weekend grosses, etc. that give industry journalists tools to make accurate estimates. You can't hide things like you did in the old days.