Could box office bonanza dry up?
Overstuffed release schedule gets leaner
After several years of moaning that hedge funds had overfilled the release schedule, studios began threatening to cut back their slates. Now, they may be cutting back more than they wanted.
Their output has hit a serious speed bump, thanks to a number of factors: The economic crash and retreat of private equity money, a protracted writers walkout, a production slowdown over fear of an actors strike and the dismantling of studio specialty labels.
The effects of these things probably won’t show up at the box office until late 2010 and 2011. So far, there are 118 wide release set to open in 2009. That’s a 16% drop from the 140 last year. But how much more of a drop do studios want?
Optimists say a lighter schedule means more breathing room for opening films. Pessimists say fewer movies means more pressure for those titles to perform.
It’s a delicate balancing act: Make enough titles to fill the pipeline, but not so many that they drown each other, as happened in 2007 and again last year.
The majors won’t disclose how many films they’ll make for release in 2011 and beyond. Some deny they will cut back at all. Others, such as 20th Century Fox and Warner Bros., have been more public in calling for an end to the glut. In October, Paramount said it was winnowing its annual release target from 25 to 20. Sony has quietly reduced its output from 29 titles in 2005 to 20 in 2008. And Disney topper Bob Iger has persuasively argued on behalf of a leaner and meaner distribution slate.
“It’s the best thing that could happen to the business,” one studio topper says.
Just a few years ago, private equity flowed uninterrupted into Hollywood, and it became all too easy to release a film theatrically. Studio and indie distribs could justify the expense of theatrical releases by counting on DVD sales down the road. But now, with the less backup from the DVD market and a global credit crunch, it’s no longer so easy to greenlight so many films.
“The difference between two and three movies opening on any given weekend, compared to four and five, is massive. You’re talking about spending $30 million and $40 million to market even smaller films just to break through the clutter,” a studio topper says.
As a studio honcho puts it: “The big question is, were the 10% to 20% of films coming from indie distributors the ones dragging down the bottom line?” Another studio topper wryly observed that Hollywood was in the midst of a subprime movie market ready to implode.
(It’s interesting that studio execs are passionate and opinionated on this topic, but don’t want to go on the record.)
In 2007, the newly reconstituted MGM, acting as a rent-a-studio, opened 14 wide releases. Last year, that number fell to nine as the company said it would focus instead on producing and release its own pics. So far, MGM has dated only two movies for this year, with at least three more in the offing.
The pipeline is undergoing changes via shuttered distribs (Picturehouse, Warner Independent, etc.) and shifting allegiances. Universal can’t rely on the influx of DreamWorks titles now that Spielberg and company are going to Disney.
Even Disney can’t rely upon the same volume of DreamWorks output that Paramount has enjoyed. Warners gets New Line titles to bolster its slate. Fox has strengthened its relationship with New Regency and Walden Media.
The Mouse House is presumably the least affected by the retreat of private equity, since it never inked a slate deal. As for the rest, it will be a struggle.
Summer 2009 is as crowded as last year, but there are hints of a shift, since there are fewer similarly themed films opening close together.
Last summer, for example, two R-rated comedies produced by Judd Apatow and released by Sony — “Step Brothers” and “Pineapple Express” — opened within days of each other. They were quickly followed by Paramount’s R-rated comedy “Tropic Thunder.” All three pics were gunning for the same audience.
Under the new thinking, it’s OK to have two or three studio releases on one weekend, but you’d better make sure they are playing to different eyeballs.
To that end, Disney announced last week it is moving the nationwide release of “The Princess and the Frog” from Christmas Day to Dec. 11. Had the animated musical stayed on Dec. 25, it would have gone up against Fox’s CGI/live-action family pic “Alvin and the Chipmunks: The Squeakuel.”
Theater owners have long urged the majors to stop crowding the summer frame, and open bigger studio titles in off-peak seasons, versus using winter and fall as a dumping ground for genre fare.
Studios resisted, but are coming around to the idea. “Paul Blart: Mall Cop” and Fox’s “Taken” showed that films can do five and six times their opening weekend business if they can hold screens long enough. That’s the sort of multiple that went by the wayside with the glut of product.
Studios still have plenty of time to rearrange releases for 2010 pics. Paramount moved several movies out of 2008 and into 2009, including tentpole “Star Trek.”
Most studios deny in public they will cut back further on the number of releases beginning in 2011. Privately, most foresee a change.
All agree on one point: It’s a new world.
