Hollywood’s big problem

Like most people living in Los Angeles I hear all the time from one guy or another what is really killing Hollywood. Like most people with friends from various circles, a lot of what I hear is people blaming everything on mysterious “pirates”.” Like most people with half a brain I know that’s a load of crap. Tyler Cowen has just written a list of 5 things that are really hurting Hollywood and it’s the most spot on analysis I’ve read in a while. It explains perfectly why many people I know don’t spend as much money on movies as they once did.

“1. Hollywood cannot control its marketing costs or star salaries. The growing importance of DVDs increases the “needle in the haystack” problem for any single film and thus locks studios into more marketing, creating a vicious spiral.

2. TV is now so much better, and offers artists greater creative freedom. Why watch movies?

3. The Internet is outcompeting cinema, whether at the multiplex or on DVD.

4. Big TV screens are keeping people at home, which lowers box office receipts. This also hurts the long-term prospects of many DVDs.

5. The demand for DVDs has fallen because movie lovers have completed their core collections, just as the demands for classical CDs have fallen.

5. The demand for DVDs was due to fall in any case. Forget the collectors, you buy DVDs to have a stock on hand so you don’t have to run out to the video store on short notice. Now everyone has a stock. Stocks must be replenished every now and then, but there is no longer a large new cohort simultaneously building up a stock from scratch.

The bottom line: These trends do not appear reversible in the short run. It is not just that this year’s movies mostly stink.”

[via kottke + BB]

9 Replies to “Hollywood’s big problem”

  1. No, movies do stink, and that is the main reason Hollywood receipts are down. People vote with their feet; when movies improve, reciepts will pick up. The public loves good entertainment, not political Bush-bashing, or mediocre remakes. Hollywood’s been there before, like when TVs first became popular in the 50s and Hollywood was afraid of losing popularity. Since the studios are profit-driven, they’ll figure it out, sooner or later.

  2. There are quite a few things that have kept me out of the theaters for the last 10 years. And for a while I thought that these were the reasons:

    One of them is the decline of etiquette (or perhaps my sudden notice of the lack of it). People talk, their cell phones ring, they bring noisy items into the theater with them like a stack of dishes they just bought at Bed, Bath and Beyond. Theaters started selling smelly food – nachos and hot dogs with chili … then people don’t finish them and put them under their seats for the rest of the movie to stank up the joint.

    I resent the long preamble of commercials at most movie theaters. I just paid a premium to NOT see commercials, big whoop that they don’t interrupt the movie.

    But, that can’t explain it all. I think the best indication of the state of feature entertainment is the fact that I get to see many of the current releases at work on the lot in a nicely appointed theater where food isn’t allowed (both releases by our studio and competitors) and yet I don’t go. It’s free, it’s a great space, it’s convenient … I’m at a loss really to explain it.

  3. I had more to say, but the comment police won’t let me post the rest of it because of questionable content …

    Basically, I don’t buy DVDs, I rent. And I rent quite a few TV shows. Come HDTV, it’ll be pretty difficult to get me out of the house and into the cinema.

  4. On theatrical releases: Movies have ALWAYS sucked, but unlike past generations, there’s no NEED to go the theatre, and in many ways its a mere novelty. I try and go out to see movies three times a week, and I’m lucky if I’m even entertained by one. Maybe I’m a sucker. Movie releases need to either be hella creative and not your typical formulaic garbage, or so loud and visually compelling that they demand the large screen for viewing – and even then, they need to be creative and not full of studio exec input.

    On DVDs: The reason less people buy now, in addition to an already built collection, can be summed up in one word: Netflix.

  5. Not to have a Jerry Maguire moment, but it can all be traced back to one thing: Too Much Money. If you’re a studio exec with the power to greenlight a picture, your decision has hundreds of millions, sometimes billions of dollars riding on it, as well as the livelihoods of thousands and thousands of people. No wonder they’re conservative and playing it safe.

    It’d be nice if there was a way to lower the stakes a bit, to encourage more risk-taking.

  6. I’d buy more DVDs if they weren’t so damn expensive. And I agree with Cybele, those stupid commercials turn me off. I used to be okay with seeing just the movie trailers, but now they add stupid random crap like Coke and LA times and cell phones to the mix. I checked my watch for two separate movies; commercials wasted 20 and 25 minutes of my time. If I wanted to be bombarded with ads, I’d drive down a large intersection; at least it’s cheaper.

  7. I almost always go to the Arclight, so I forget about how crappy the commercials sometimes. The Coke and the Mazda commercials (kinda like those twins we met in Chicago) are bad enough, but what really gets me are the propaganda recruitment ads for the Army and the LAPD – I feel like I’m in a Robocop movie.

  8. There’s the “going out” element, ie. Let’s go out to the movies, let’s go see the latest Spielberg flick. Often people settle on going to a movie for lack of much else to do around other people besides getting bombed at a party when they aren’t working. It’s one of the few, mass-market things that you can do in a large room with other people.

    And, it seems movies historically have been like military actions (they work best when there’s lots of surprise and when they are created using proven, reliable elements [ie., actors and things that have worked well previously]. It seems like these days you can pack people in movie theatres as a “default” social activity (a film will have it’s reliable elements, but no surprises; viewers “submit” simply because they have no other choice for easy-access entertainment involving other people).

    Sure there’s theatre, religious services, sporting events, charities, Conventions (at least a ton in So Cal), amusement/theme parks too. But, the 21st century could use other entertaining social activities that offer operators the easy-to-change, product variety of movie theatres.

    I’ve seen good crowd response to things such as a traditional movie-screen presentation of players controlling representative characters in modern networked videogames; the audience was fairly excited watching such a thing. What might be interesting is that in future video games, you could have championship networked games played for prize-money that last two hours. The game is then instantaneously transmitted to movie theatres and shown via the digital cameras that are increasingly installed in modern theatres. Kind of has crowd elements of theatre and sporting event; a hybrid of sorts. Don’t know if it’s worth 10 bucks, maybe 3 or 4 bucks instead. But, as games evolve, so might the audience.

    When Jackie Collins is the Executive Producer on a such a network videogame project, then we have something.

  9. Not to be a nerd, but… video games! Video games now generate more revenue than the box office. Not that everyone here plays them, but I’m positive a solid majority of that holy 18-35 demographic does.

    Also, due to a number of reasons (increased budget, etc.) studios expect each film to make “blockbuster” type money. 10 years ago a 20-40 million dollar opening weekend was considered great. Now, it’s a flop. With those increased stakes, studios become less and less willing to take creative risks that might alienate customers, leading to franchise sequels or generic/stale pieces. As the demand for revenue increases, they become less willing to deviate from their formulas….

    But I would like to apologize to everyone for all the ads before the trailers. Yes, I know they blow. I’ve been working on editing one (for a crappy Lifetime made-for-TV movie no less!) for the past few weeks. I just want to let all you know that I am going to a circle of hell reserved for ad people like me. If you see one for a new Lifetime movie in the next few months, I’ll give you permission to kick me in the nuts, gouge my eyes, key my car, or anything else that will make you feel better for me stealing 30 seconds of your life.

    However, the studios aren’t to blame for the ads, at least not directly. The distributors (studios) take a certain percentage from each movie ticket sold. I remember hearing 90%, although I’m not sure. With only 10% (about $1 today) from each ticket, the theatres main revenue source used to be the concessions, hence the $3 cup of flat soda filled mostly with ice. The pre-trailer ads are just another way for the theatres to make some extra money without having to increase ticket prices. The ads certainly suck, but would you rather have no ads but have to pay a few dollars more per ticket?

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