Sep 14, 2012

Why the death of Hollywood has been greatly exaggerated

Hollywood's business model is in serious trouble, so the narrative goes. So why are big film studios making more money than ever? New markets in China and on the internet are driving a new boom.

Luke Buckmaster — Writer, Critic and The Daily Review Journalist

Luke Buckmaster

Writer, Critic and The Daily Review Journalist

Last weekend was, by any account, not a great one for Hollywood. Box office receipts were down across the board, though not unexpectedly. This is traditionally a slow time of the year for cinema attendance in America.

“Nobody picks the first weekend of September because they think it’s going to be a huge gross,” CBS Films’ Steven Friedlander told the Los Angeles Times, defending lacklustre results for the opening of the mini-studio’s new romantic drama The Words, starring Bradley “Sexiest Man Alive” Cooper.

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7 thoughts on “Why the death of Hollywood has been greatly exaggerated

  1. Rossco from Newcastle

    What does profit mean in Hollywood anyway? Apparently ‘Star Wars: Episode Five; The Empire Strikes Back’ as it’s known colloquially, is still waiting to go into profit and denied the late David Prowse (an element of Darth Vader) any royalties due to him. Then there’s the infamous ‘Coming to America’ case that exposed the dark underbelly of accounting, scriptwriting credits and the wonderful world of percentages at play in La La Land. So I do concurr with the author’s sceptisism toward Brad Pitts comments. Although I do agree that the fees are reaching a new level of obscenity but what’s a star to do if the blockbuster they headline can potentially make Billions now? Such hard decisions. I don’t envy them at all.

    It is heartening to see that Hollywood is catching up with the rest of the world insomuch as using the Internets as a force for good and more importantly, profit. The Facebook experiment I find particularly interesting.

    I can imagine a day soon where one could buy a movie ticket to a new release or perhaps even a rerelease, (why discriminate?) for a discounted price through your Facebook account. When the session you’ve attended is finished, Facebook sends a reminder to your phone and asks for your score, twit or Lengthier review of the movie. As a marketing tool I reckon that would be invaluable. I’d sign up for it, no worries. They’re not already doing it are they? I thought I was being so terribly clever thinking that up.

  2. Rossco from Newcastle

    Apologies for the double up. I’m in holiday in Moree, reading Crikey on my iPad & posting over 3G. It appears that the server had an aneurysm whilst trying to up load.

  3. Scott

    “the late David Prowse”

    I’m pretty sure he is still alive.

    But don’t blame the studio for David making a bad deal. You always go for a share of gross profit (ala Sir Alec Guiness), or turnover, not a percentage of the nets . Because depending on how the movie is financed, earnings can be sent back to the studio in the form of interest, distributions or debt repayments which are finance expenses and hence reduce net profit (but not gross profit)

    He got some bad advice I’m afraid.

  4. Rossco from Newcastle

    Ooh, my bad. I thought he was. Hmm, don’t know who I was thinking of then. Sorry Dave.

  5. Socrates

    The demand for entertainment hasn’t gone down, nor the profit from making it. What has changed is the means of distribution. The losers from this are obvious: video store and cinema owners, perhaps even television stations. The winners are home theatre makers and internet service providers. That leaves movie studios about square.

  6. Rossco from Newcastle

    I agree Socrates, but I wouldn’t count Cinema owners out yet. I think with Digital projection and high speed broadband they could transform into something new. Already we’re seeing the live transmission of West End Plays from London in Cinemas, small scale so far but I think as word spreads it will grow. I can see community event television becoming popular.

    For instance watching the latest episode of a cult TV show such as True Blood or Boardwalk Empire with an audience of other fans on the Big Screen in High Def. It’s only a matter of time before the Studio’s discover this untapped source of income. It would be money for Jam using Facebook and Twitter to promote it.

    I’ve just come back from a trip through country NSW where I noticed lots of old and beautiful Movie theatres sitting there neglected. If I had the money I’d be buying them up and converting them to Digital with big sound systems for just such events. Something like that in these towns would bring the entire district into town and if events were sponsored by local business’s it could help transform regional Australia.

  7. Scott

    I don’t know Rossco. Seems like a good way to lose a lot of money.

    I think ultimately, the end game for the movie industry is pay per view to home cinema. Electricals are getting cheaper so it’s easy to set up a pretty good system in your house. Once the broadband speed is increased, and the distribution system sorted, I think it will be a straight stream/download from the movie studio (or production house) to your home. Convenience is king. We are going to see it with TV soon (when AppleTV becomes a reality)

    The idea of everyone going to the cinema for an “event” screening (especially in country towns) I just don’t see happening, even now when DVD box sets are available. And you would need numbers to make it profitable…more than would be provided by niche segments like fans of True Blood.

    But I’ve been wrong plenty of times before.

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