Film rating slips in light of political climate

Despite moral watchdogs lamenting Hollywood’s vile tendencies, the studios have actually been cleaning up their act. R-rated films, once the studios’ mainstay, are on the decline, both in numbers and in lure. In the last five years, R-rated pics have dwindled from 212 in 1999 to just 147 last year.

Perhaps even more startling is the fact that in 2004, PG films outgrossed R pics for the first time in two decades: $2.3 billion to $2.1 billion. The last time PG was bigger business than R was 1984, the year the Motion Picture Assn. of America introduced the PG-13 rating.

While PG films have been making more money — “Shrek 2,” “The Incredibles” and “Harry Potter and the Prisoner of Azkaban” were all rated PG — the box office generated by R-rated films has been falling precipitously.

Since 1999 — when the $3 billion grosses for R pics was 41% of all box office — total box office has grown by 26% while R-rated biz has fallen 30%.

Of the 212 R-rated films released in 1999, nine made more than $100 million, a diverse roster that includes “The Matrix,” “American Beauty” and “American Pie.”

In 2004, only four of the 147 R-rated films released got past the century mark: “The Passion of the Christ,” “Troy,” “Fahrenheit 9/11″ and “Collateral.”

PG-13 films have eclipsed R’s as the largest sector of the market, grossing a combined $4.4 billion, a 48% share of the market.

No single cause is likely responsible for the shift, but many execs cite one factor: the voluntary guidelines studios and exhibs adopted five years ago. Those regs restrict the marketing of R-rated films to kids, which in theory ensures that only people 17 and older can buy tickets to R-rated films.

But no matter what has put R into free-fall, some filmmakers and studio execs have concluded that R is losing its commercial luster.

“Many things in Hollywood become self-fulfilling prophecies,” says “American Pie” helmer Paul Weitz. “As soon as there is a whiff that a kind of film won’t make money, fewer get made and less marketing money will go towards them.”

“You’re leaving tens of millions of dollars on the table with an R rating,” says one studio marketing exec. “Why? For artistic integrity? Let’s be real.”

Pics that studios once would have released with an R have instead been trimmed to PG-13. The recent crop of successful horror pics, like “Boogeyman,” “White Noise” and last fall’s “The Grudge,” have mostly been PG-13.

(At the same time, there is evidence that today’s PG-13 is more like yesterday’s R. Last summer, a Harvard study found that current films with PG-13 ratings and below had more violence, sex and profanity than films of the same ratings 10 years prior.)

Some see the decline in grosses for R films as a barometer of the cultural climate. “Hollywood has done a great job of making PG movies that don’t just appeal to kids but appeal to everybody,” says Revolution partner Tom Sherak.

But even those who are reluctant to conclude that today’s kids are any less interested in R-rated drugs, sex and violence than they were five years ago, say the continued political pressure over public decency has changed industry practices and made it harder for R pics to make money.

Out of last year’s four top-grossing R-rated pics, “The Passion of the Christ” and “Fahrenheit 9/11″ were both unlikely-to-be-repeated anomalies. “Troy,” which was seen as a disappointment despite grossing $133 million, did make $364 million overseas. But in many major foreign territories, it received a rating that allowed 15- and 16-year olds to buy tickets. Other R-rated pics, like “The Last Samurai,” that have done bigger foreign biz than domestic, have also been less restrictively rated in big overseas markets.

Not to take a chance, Disney recut its own summer historical epic, “King Arthur,” down to PG-13.

Before last year’s Nipplegate, critics of slipping entertainment standards had set their sights on violent movies. Desperately seeking an explanation for why two troubled teens would walk into school and mow down their classmates, many commentators immediately pointed to the carnage depicted in films, music and videogames.

Within days of 1999’s Columbine massacre, President Bill Clinton directed the Federal Trade Commission to examine whether the entertainment industry was promoting violence to teens.

While some lawmakers, including Sen. Joe Lieberman, drafted legislation, eventually both the MPAA and the National Assn. of Theater Owners adopted voluntary guidelines in the fall of 2000 to bolster enforcement of the current rating system.

For example, studios generally now refrain from advertising R-rated films during TV programs in which children make up 35% or more of the aud. Similarly, exhibs pledged to step up ID checks of teens trying to buy tickets for R-rated films and bar trailers for R-rated product in front of PG pics.

The FTC continues to monitor the industry, and in its most recent report, July 2004, said the guidelines were mostly being followed. Only a handful of R-rated films were advertised on shows popular with children and only 36% of under-17 teens were able to buy tickets for R-rated films, down from nearly half in the FTC’s first survey.

“Exhibitors have done a really good job of trying to keep underage kids out of R-rated movies,” Sherak notes. “And that’s caused more PG and PG-13 movies.”

During the summer of 2000, while Washington was putting pressure on Hollywood, Danny Leiner was in the midst of filming “Dude, Where’s My Car?,” which he said was pitched to Fox as a R-rated stoner comedy. He says execs at the studio, which just two years prior had banked $176 million from a body-fluid gag in R-rated “There’s Something About Mary,” made it clear he needed to start thinking about PG-13.

“All the studio presidents had just gone to Capitol Hill and testified in front of Congress,” he says. “And there was a mandate that the movie just wasn’t going to be R-rated.”

For its part, Fox insists it always planned for the pic to go out PG-13. No matter, it worked: produced on less than $15 million, “Dude” racked up $47 million.

Leiner followed it up with another stoner comedy, “Harold & Kumar Go to White Castle,” which New Line released last summer with an R.

Despite strong reviews — the New York Times, sounding like it was enjoying a few tokes itself, argued the film “persuasively, and intelligently, engage(s) the social realities of contemporary multicultural America” — “Harold & Kumar” flopped: $18 million domestic.

Jack Valenti, who is still in charge of the MPAA’s ratings program after handing the rest of the org’s reins to Dan Glickman, rejects the notion that the rating system he created drives the biz.

“The rating of a film doesn’t have anything to do with the box office,” he says. “If you make a movie that a lot of people want to see, no rating will hurt you.”

Still, he concedes R-rated films have longer odds for success.

“Most producers are like gamblers in a casino. They want to go where the best odds are,” Valenti says. “You’d rather have a PG-13 than an R because you have slightly better odds.”

NATO prexy John Fithian says exhibs are happy to see Hollywood producing fewer R-rated films. “We have been calling for more PG films and a lesser percentage of R films for years,” he says, adding that Hollywood is listening.

“Studios, looking at the commercial potential of films, have migrated some of their R-rated films into PG-13. We think that’s a good move. We like big commercial films not being restricted.”

Of course, no one expects R films to go the way of NC-17 anytime soon. Studios still look to capitalize on a market for raunchier product, on homevideo at least. Among the PG-13-rated films now available unrated on DVD are “White Chicks,” “Anchorman,” “The Chronicles of Riddick” and, rather inexplicably, “Nutty Professor II.”

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