This Just In: Movies Don't Make Money
Report says studios lost $1.9 billion last year.
In marked contrast to the music business, which has spent the last seven years dealing with declining profits and assorted bad news, the 21st century has seen the film industry repeatedly setting new records for ticket receipts. The movie biz is healthy, right?
Right?
Not if you believe "Do Movies Make Money?," the just-released report from Global Media Intelligence. In an article published yesterday, Variety takes a look at the numbers crunched by GMI, and according to the report, things aren't looking good. In fact, GMI says the Hollywood studios will post a $1.9 billion loss on the movies they released last year. Yes, that's a "b" in front of the "illion." Seriously, check it out:
Analyzing the 132 pics distributed by the U.S. majors in 2006, it estimates a pre-tax operating loss of $1.9 billion after five years of exploitation across all global media. That compares with a profit of $2.2 million for all new studio releases in 2004.
"We believe there is little chance of the negative revenue trend reversing in the coming years," commented the report's New York-based author Roger Smith.
The main problem, as identified by GMI, is that people aren't buying DVDs the way they used to. Aside from providing interesting commentary on the lifecycle of a format that was new territory for most consumers just nine years ago, the downturn in DVD sales (they're down by 12.5% just this year) hits the studios hard. As Variety puts it, the format has been "providing the lion's share of studio profits."
Of course, this report's release in the midst of a hotly contested writers' strike -- with the threat of actors' and directors' strikes looming on the horizon -- is purely coincidental. What, you think the industry that sends out Michael Eisner to call the strike "stupid" is incapable of at least mildly savvy PR? Think again. And look, the report helpfully takes a thinly veiled swipe at those greedy entertainers:
While the studios are currently in negotiations with writers, actors and directors over fees, these salaries are not the main issue; the current cost of producing, casting and advertising in the present environment simply exceeds the likely returns.
All of which might very well be true -- but the current overblown salary structure for Hollywood's top talent wasn't created in a vacuum, and for the studios to pretend otherwise (while releasing many, many bad movies) seems at least mildly disingenuous, no?
Source: Variety
Right?
Not if you believe "Do Movies Make Money?," the just-released report from Global Media Intelligence. In an article published yesterday, Variety takes a look at the numbers crunched by GMI, and according to the report, things aren't looking good. In fact, GMI says the Hollywood studios will post a $1.9 billion loss on the movies they released last year. Yes, that's a "b" in front of the "illion." Seriously, check it out:
Analyzing the 132 pics distributed by the U.S. majors in 2006, it estimates a pre-tax operating loss of $1.9 billion after five years of exploitation across all global media. That compares with a profit of $2.2 million for all new studio releases in 2004.
"We believe there is little chance of the negative revenue trend reversing in the coming years," commented the report's New York-based author Roger Smith.
The main problem, as identified by GMI, is that people aren't buying DVDs the way they used to. Aside from providing interesting commentary on the lifecycle of a format that was new territory for most consumers just nine years ago, the downturn in DVD sales (they're down by 12.5% just this year) hits the studios hard. As Variety puts it, the format has been "providing the lion's share of studio profits."
Of course, this report's release in the midst of a hotly contested writers' strike -- with the threat of actors' and directors' strikes looming on the horizon -- is purely coincidental. What, you think the industry that sends out Michael Eisner to call the strike "stupid" is incapable of at least mildly savvy PR? Think again. And look, the report helpfully takes a thinly veiled swipe at those greedy entertainers:
While the studios are currently in negotiations with writers, actors and directors over fees, these salaries are not the main issue; the current cost of producing, casting and advertising in the present environment simply exceeds the likely returns.
All of which might very well be true -- but the current overblown salary structure for Hollywood's top talent wasn't created in a vacuum, and for the studios to pretend otherwise (while releasing many, many bad movies) seems at least mildly disingenuous, no?
Source: Variety
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on Nov 13 2007 05:44 AM Of course, the first thing they do is blame piracy - not the fact that a large portion of released films are utter garbage. Remakes, unnecessary sequels, etc. When deciding what films to make next... the studio asks itself "What made money in the past?" or "What's making money for the competition?" and base their decisions on that. Is there anything wrong with thinking like that? Not necessarily... but what's happening is that there's less and less to get excited about in films. Cinema as a whole is becoming boring. Sometimes I will see a movie that I really like, and then wonder if it was really a good movie, or if my standards have just dropped over the years along with the standards of film. (Reply to this) |
![]() on Nov 13 2007 05:49 AM Uh, crumbling economy = poor lower class = less luxury purchases? (Reply to this) |
![]() on Nov 13 2007 05:59 AM You both are right. Make some decent movies and they'll make money. Not to mention that with the way money is right now, people really don't have disposible income or free time like that to see crap. To busy workin a second job to keep the lights on. And ticket prices are way to f#cking high to see a movie over and over again in the theater. (Reply to this) |
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on Nov 13 2007 06:18 AM its a multitude of things. in this day and age...who wants to go to the theater? when it comes out on dvd...WHO wants to BUY a movie for 20 bucks when you can go to blockbuster or netflix(vomit) and watch it for a fraction of the price?? honestly, how many movies do you see and go "god...i have to have that!" maybe two...three times a year. least for me and the people i know. prices, BAD MOVIES, and inconvenience. c'mon...i don't feel sorry for these studios when they keep remaking sh3t and best of all...oscar hopefuls like Evan Almighty are released. if it wasn't for the Jesus crowd...that would have made 20 bucks...domestic. keep selling an overhyped overpriced BAD product...and thats what you get. might as well make the movies in china... (Reply to this) |
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on Nov 13 2007 06:18 AM when i look at this article, i believe it and dont believe it at the same time. I mean, one mega-profitable movie like 300, which cost 60 mil to make but took in around what, 220? or spider man 3 which cost 150ish and took in 380 or whatever, has to be enough to counter all the loses on alot of the other crap that hollywood puts out and doesnt make money. on the other, more realistic hand, hollywood is stupid, because they sink 225 mil into a project like EVAN ALMIGHTY. if you are really going to sink 225 mil into a project like that, then dont come complaining about how you are losing money. you deserve it. and one final thing which seems to make intuitive sense to me but not to the studios. when dvds first came out, people felt the need to restock their shelves with dvd versions of their favorite old movies. so it was a feeding frenzy for a while. but now, at least in my opinion, the jump in quality from dvd to HD-DVD or blu-ray isnt as stark as the jump from VHS to DVD was, so people arent willing to fork over 30 or 40 bucks per movie to switch their entire library. im not saying hddvd or blu-ray arent exceptionally clear, im just saying that vhs to dvd was a revolutionary paradigm shift worth paying for like discman to ipods, but dvd-hddvd is merely an improvement, like the difference between the first gen ipod and the current ones. until the next big thing comes along, which seems to be realistic 3D stuff, i dont think anybody will be buying hddvds or blu ray or dvds in droves. (Reply to this) |
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on Nov 13 2007 06:27 AM gimy, evan almighty really gets going man. i remember reading on this site that some shmuck producer was asked how he could justify a 225 mil comedy and he actually said "look, evan almighty is based on two very popular and profitable things, bruce almighty and the bible." (im paraphrasing of course, but thats almost exactly what he said). i love going to the movies. and sometimes, i will willingly walk into what i know will be a crappy movie (ghost rider, im looking at you) just to see if it could possibly be as crappy as i think it will be. these days, most big budget franchise-type movies, the supposed money makers, are even crappier than i thought they would be, or at least highly disappointing (pretty much every big money blockbuster that came out this year was disappointing). and even though i am willing to fork over 10.50$ to go see how crappy ghost rider, transformers, spiderman 3, and the amusing but completely indechipherable POTC3 are, i refused to hand over 10.50$ to see evan almighty. (Reply to this) |
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on Nov 13 2007 06:29 AM (Reply to this) |
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on Nov 13 2007 06:33 AM Wow I wonder why people aren't buying DVD's like they used to. Could it be that they're pushing a newer more expensive format at us while at the same time raising the price on standard DVD's and not offering anything new? Nope it must be piracy. That's the only logical conclusion. I know just from the perspective of my purchases I used to buy 3 or 4 DVD's a month a year or two ago. This year I've bought a grand total of 2 DVD's. I have all the movies I'd really care to own plus they don't seem to be priced to move anymore. Now the price has gone up 5 dollars and the price on HD and Blu are way too high to even consider switching my entire library. Guess Hollywood will just have to live without my 80-100 dollars a month. The real question for me would be if movies don't make money then why do they make so many bad ones? It's not like you couldn't tell a movie like Capture was going to be crap when you got the script. (Reply to this) |
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on Nov 13 2007 06:44 AM "the next thing to come out" isn't going to be released in the traditional sense at all. illegal downloading is easier than people think, so once the everyman figures out how to use torrents for movies the way they figured out how to use music downloading programs, no one will have a need for dvds at all. those who can't grasp the torrent system will just buy it from itunes. plus, the new click-and-play netflix feature is going to revolutionize how people watch movies. as long as you pay your monthly subscription, you have their entire library at your finger tips, instantaneously. aside from the possible exclusion of special features, why even go out and rent a dvd, let alone buy one? discs are passe anyways. a platform where half of its area is left unprotected and a single scratch can ruin the product? sounds dead to me. minidiscs (or UMDs) should've caught on, but since they didn't, the movie as tangible object seems increasingly unnecessary. (Reply to this) |
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on Nov 13 2007 06:48 AM In reply to this comment (#1273067) Interesting, Kosomak. And sickening. (Reply to this) |
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on Nov 13 2007 07:13 AM Here's the issue that keeps on buggin' me: Even if studios look at *ONLY* the bottom line, i.e., what has made money in the past, as opposed to what would be a GOOD movie, they should STILL not be making half the unforgivable sh#t that they make: ANY movie that was originally made famous by someone else, done by a new group of people with a new star playing either the SAME role or the 'Son of.' See, for example, pretty much any movie originally from the Jim Carrey Canon, including 'Son of the Mask,' 'Dumb and Dumberer' and the soon-to-be-released (WHY, merciless god, WHY!?!?)'Son of Ace Ventura.' Which will almost doubtlessly be the failure it deserves to be. Also, Roberto Benigni, for 'Son of Pink Panther' while I'm at it. Any review of the box office failures of these movies should be a big, honking, stinking warning sign to NOT MAKE A FRIGGIN' NOTHER ONE. And yet they do, which means *someone* is making money in the industry or they wouldn't risk making known failures. (Reply to this) |
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on Nov 13 2007 08:19 AM Gimy, is it even possible for you to post anything, anywhere, where you don't somehow try to insult Christians? I mean, is that even a realistic possibility? You take the phrase "one-trick pony" well past the extreme. However, other than your implied attack on the artistic tastes of Christian movie-goers, I agree with everything you said. We have a pretty big DVD collection, but the vast majority of it is material that was originally released between 80 and 10 years ago, and we consider it more like a real library than an active source for viewing. Most of our other DVDs are seasons of great TV shows. Hollywood is digging itself a very deep hole, and they will inevitably turn to the federal government to fix it for them somehow. The actors in the industry have a lot of lobbying power with the democrats, and the businessmen in the industry have pull with republicans. Either way we can look forward to taxes on internet downloads, financial bail-outs that get passed on to taxpayers, and other like policies. (Reply to this) |
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on Nov 13 2007 08:52 AM Who would've thunk it? (Reply to this) |
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on Nov 13 2007 08:53 AM Dahluzz your probably right, but I don't think I'm the only one who can't stand watching movies on their computer. (Reply to this) |
![]() on Nov 13 2007 09:16 AM Piracy is NOT to blame! Films like Fantastic Four 2, Night at the Museum 2, Garfield 2... Remakes such as The Fog, Psycho, need i go on? What about watered down Game to film franchises that are nothing like the games theyre based on, ahem... Resident evils, Doom? Or maybe its the Actors you choose? Nicholas Cage, Josh Hartnette need i go on? Hope yore taking note Hollywood.... ITS YOURE FAULT!!!! YOURS! Reap what you sew! Piracy, is a way the consumers get to SIFT through the CRAP! Have you ever wondered why its the occasional films on the shelves that IS good, they are the ones actually being Bought? YOU ARE TO BLAME! Sort out youre mess! Make great films and we will lap them up! (Reply to this) |
![]() on Nov 13 2007 09:19 AM Even if you look at the crap people will watch, they will only watch it once and then the movie will die at 50 million bucks or so. the majority of movies never go over 60 (and thats pushing it) and yet they keep making movies that cost over that. it also doesnt help that they pay actors and directors to much (i mean over 10 million is insane for a couple months work, and a couple million is insane) then the owners and producers pay themselves to much. and then they pump out **** that fails and try and make us see it for 10 bucks then they they want us to pay over 20 bucks for a movie that wasnt very good. wow no wonder they are failing, but as been said someone has to be making a profit or this business would stop. (Reply to this) |
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on Nov 13 2007 09:26 AM In reply to this comment (#1273319) the future is one-screen-fits-all (ie TV, movies, game consoles and PC) personally, i'm getting a cinema screen instead of a big screen tv so that, with the help of a few usb connectors and a wireless keyboard, i can do it all from one screen. people with tv could look at apple tv, or various other radioshack cords that will allow you to view what's on your computer on the main screen. if what you're watching is a high quality file, problem solved. i get your point, but i'm just talking about where things are likely headed. (Reply to this) |
![]() on Nov 13 2007 09:34 AM And writers still deserve to be paid more? It looks like the writers just got ***** slapped in their claim that the studios make enough money to give them a pay increase. (Reply to this) |
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on Nov 13 2007 09:49 AM What's truly interesting is how much marketing a movie costs these days. You would think that, with the rampant conglomeration of the media that these corporations could somehow figure out a way to use that synergy to get their marketing costs down. However, I suspect that NBC charges Universal the same rates to advertise as ABC does, despite the fact that NBC and Universal are part of the same company. Same thing with the advertising rates ABC charges Disney, Fox charges Fox and AOL charges Warner Bros. Talk about robbing Peter to pay Paul. The marketing budget for an "event" picture like, say, Spider-Man 3 or Harry Potter is often as high if not higher than the budget of the actual movie. This is especially obscene when you consider that movies like Spider-Man 3 and Harry Potter have built-in audiences. Studios can blame piracy and audience apathy all they want but, between out-of-control production and marketing costs, the simple truth is they have built themselves an unworkable business model that is causing them to lose money. (Reply to this) |
![]() on Nov 13 2007 10:03 AM Lie. I have and still do work in Hollywood if you believe that i have a bridge to sell you. Movies made money before DVD's and will after they are probubly just eyeballing(and they are) another ticket increase and trying to sooth the mass's with B.S. Hollywood makes more money than most states in the Union and many small countries if you dont think they can manipulate a few numbers.... (Reply to this) |
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