Can This Screen Be Saved?

I don’t profess to have many friends in high places, at least lately.  At one time I kinda did but, arguably, to an outsider I could have been seen as being among them.  I never personally felt that way at the time, but in hindsight I guess I had access to the minds and mindsets of true Hollywood movers and shakers.  These days, the best of them are essentially retired and will for seeming sh-ts and giggles weigh in  on how their successors continue to screw up the businesses they once ran successfully.

I have one such “friend” –and I use quotes not to be snarky but respectful, as it’s been decades since I actually had a conversation with him–in Blair Westlake, who was once the chairman of Universal Television and later a senior executive at Microsoft.  I did a decent amount of business with his lieutenants at Universal at a time when I worked for people who were hell bent on being as self-reliant as possible, so I guess he saw me as a surprisingly supportive client.  Probably enough to at least earn me an invite to the spirited discourse his regular posts provoke.   The one he posted yesterday was particularly incideniary, linking to this Brooks Barnes story from yesterday’s NEW YORK TIMES about the particularly alarming results of the first holiday weekend of summer 2024:

Hollywood expected “Furiosa: A Mad Max Saga” to scorch the box office over the holiday weekend. Instead, the big-budget Warner Bros. prequel iced it over.

“Furiosa,” which cost $168 million to make, not including tens of millions of dollars in marketing costs, collected an estimated $25.6 million in the United States and Canada from Thursday night to Sunday. Box office analysts expected the film to take in about $5.4 million on Monday, for a holiday-weekend total of $31 million.

That would be the worst Memorial Day weekend result in 43 years after adjusting for inflation — ever since “Bustin’ Loose,” a comedic drama starring Richard Pryor, collected $24 million in 1981.

Westlake’s team sold me the local station rights to that movie for several top markets at a severe discount, so I know any comparison to THAT resonated with him.  As no doubt did two other points that Barnes pushed to the forefront of their recap:

The franchise’s previous chapter, “Mad Max: Fury Road,” took in $45.4 million in 2015, or roughly $61 million in today’s dollars — and that was without the benefit of a holiday weekend.  Hollywood had high expectations for “Furiosa,” which Warner Bros. premiered at the Cannes Film Festival; the movie received exceptional reviews. On Sunday, however, it was unclear whether “Furiosa” would manage even first place at the box office. Analysts said the poorly reviewed “Garfield” (Sony), which cost $60 million to make, could inch ahead. 

Blair’s version of Linda Richman’s “Discuss!” pretty much summed up the lens that veteran observers like he, and yes, moi, saw these results through:

An unimaginably paltry box office…

Undoubtedly a few films will open well later this year. The challenge is you can’t run a business where only about 5% of your ‘product’ works and makes money and everything else ranges from mediocre to failure.

His challenge produced a notably auspiced list of opiners who all offered nuanced and informed takes, including:

From a former Price Waterhouse executive: Derivative. Derivative. Derivative. That’s just not going to cut it, especially when you’re paying $100 or even more for two or three movie tickets and some modest snacks. The movie industry is killing itself, with consistently lackluster product and never-ending price increases for a generally subpar movie going experience.

From a senior technology executive who had top roles at 20th Century Fox and DIREC TV: There are just way too many entertainment options out there. It will be tougher and tougher to aggregate an audience around any kind of content, good or not so good. I found Furiosa very derivative, with nothing really new to add to the other stories.

From a one-time top marketing executive from CBS: In the golden age of cinema, the industry thrived due to limited competition, a blend of mediocre and standout films, affordable pricing, and a global audience starved for entertainment. The youth market, virtually untouched by other entertainment forms, further fueled this growth.
Today, the scenario is vastly different. The entertainment industry is saturated with diverse content and options. Superior storytelling at home and the global shift towards streaming services have redefined audience preferences. With disposable income already claimed by streaming services and high admission and concession prices, movie theaters can no longer bank on substandard films.

And even a link from someone with a slightly less compelling resume which led to this take from FRONT PAGE MAGAZINE’s Daniel Horowitz:

Mad Max: it’s right there in the name. The original movie showed that Australians could make their own westerns. It featured the usual lone hero up against a violent immoral wasteland. And yet along the way it, like every ‘franchise’, was rebooted into a feminist paradigm. And then, like every rebooted franchise, it bombed.

Lest you think that this is all merely old people yelling at clouds, take note that there are similar thoughts being offered up by the likes of active observers and writers like THE HOT BUTTON’s David Poland to his readers where he takes particular umbrage at the policies which actually created those kind of scenarios:

Since it is Memorial Day, let’s start with World War II.

In 1944, as the war to end all wars had its end in sight, Congress passed The G.I. Bill.

The G.I. Bill, formally known as the Servicemen’s Readjustment Act of 1944, was a law that provided a range of benefits for some of the returning World War II veterans (commonly referred to as G.I.s).

The bill offered a wide array of support mechanisms for soldiers coming home from the war, including cheap home loans, money to return to education at whatever level was appropriate, business loans, a year of unemployment compensation, and more. The bill offered opportunities for 14 years.

That is how you rebuild something well.

So what has the movie exhibition business been treated to since COVID effectively shut it down almost completely for 14 months and mostly for another 5 months and carry on after effects still, 2.5 years later?

Fewer movies
Narrower range of movies
Aggressively shortened windows to VOD and with some small delay, Subscription Streaming
Shortened Marketing Windows
Reduced Publicity Spending
Reduced Marketing Spending
Longer periods of few or no commercially ambitious films released.

So tell me this…

Have the major studios/distributors done a single thing to IMPROVE the business of movie exhibition since the start or the end of COVID?

Poland’s entire piece is well worth reading.  Many of his points help underscore where I kind of net out, which is an “all of the above” finger-wagging.  My own weigh-in offered up that perhaps one additional factor that impacted this weekend was the pay-per-view release of this summer’s first box office disappointment, THE FALL GUY, a mere 19 days after its theatrical release.  It may not have been good enough to drag people out to the kind of overpriced and aggravating environment that our pWc executive described, but especially on a weekend where tornadoes ravaged a good deal of the country it may have been good enough for people to choose that, even at a relatively hefty PPV price.  Universal championed that strategy during COVID and, like other studios, look at ROIs over multiplatform life cycles.  I’d be really curious to see if they choose to release any sort of information on how many downloads it got, and what kind of revenue it took in, especially relative to something like FURIOSA.

Yet another contributor to Westlake’s Algonquin roundtable, the founder of an OTT platform, offered this potential metric–one easily calcuable by a motivated studio or third party with a significant panel of opt-in participants (hear that, Samba?) as a barometer:

Your best bet would be a pay-per-view audience and they could still call it collective box office dollars, if they are charging a box office price.

I’m certain Universal will be doing just that, as well as anticipating its eventual release on its struggling streaming service Peacock in August, roughly around the time it will undoubtedly be getting opportunistic subscriptions for its Olympics coverage and its Eagles-Packers NFL game from Brazil on night two of the 2024 season.  So for their parochial purposes, the verdict on the beginning of the summer is still very much TBD.

But what will be the fate of the theatre owners?  Barnes offered up the view of Paul Dergarabedian, a senior Comscore media analyst:

Mr. Dergarabedian is an optimist…  “It’s not game over for theaters this summer as many have asserted,” he said, noting that sequels like “Inside Out 2,” “Despicable Me 4” and “Deadpool & Wolverine” could arrive as major hits in June and July. If those films deliver, he said, Hollywood can salvage “the perception of the movie theater business as a viable and relevant part of the entertainment ecosystem.”

Or exactly the kind of derivative, been there-done-that titles that my fellow Roundtable participants derided.

I’ve previously offered that studios seek out alternatives to multiplexes such as drive-ins with fast food partnerships, another early COVID fix, as a possible way to deal with this apparently existential issue.  For the theatre owners, they may want to look closely at how minor league baseball reinvented itself.  They found real marketers to improve and put front and center the overall experience of going to a game, rather than the second-tier professional baseball being played.  They lowered prices on many concession items, particularly on cleverly curated theme nights.  They invested in improved and more modern stadiums, complete with interactive areas for kids and families.  They became more centered around their communities and created more unique experiences specific to their area.   I’d offer that with rare exceptions you couldn’t tell the difference between a multiplex in Marina Del Rey and a multiplex in Omaha, and I’ve been to both.

Maybe that’s more than a little bit of a reach.  Especially since creatives insist that the experience of seeing a movie in a theater with the kind of size and sound that few can afford is essential.  But they’re generally in the category of older people yelling at clouds.  And we know how that’s playing out.

Poland concluded his newsletter with a dystopian warning:

Movie theaters could be destroyed. We are down to 5 majors. We could lose one in the next year. That alone is a disaster for movie theaters, assuming that the number of films that keep coming from the absorbed major drops as Fox’s did when Disney acquired them. But it could get worse. Distributors could just keep dropping the number of titles they release wide, 1 or 2 a year, chasing mostly bigger IP movies… they could keep leaving full months barely programmed with new titles… others who aren’t on Universal’s short schedule could join that plan and Universal could simply continue it. As I noted in a previous column, the percentage of the titles that are on VOD in 21 days or less has grown each year since the plan launched.

But he did offer this solution:

Let’s see the GI Bill for movie exhibition for a couple of years… be clear about the cut-off. Make a real investment in movie theaters. It will be much cheaper than investing in Streaming. And it can pay off in much better, more definable numbers.

In other words, pretty much what minor league baseball did.  With creative marketers driving the decisions.

I think I know where a few such viable candidates for that challenge can be found.  I’m sure Blair Westlake won’t mind.

Until next time…

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