Toll of tentpoles causes studios to rewrite rulebook
A year ago, Hollywood studios pored over summer grosses and concluded that tentpoles were the way to go, and mid-range pics ($30 million-$70 million) should be phased out.
Now all bets are off.
Universal’s modestly budgeted “Fast & the Furious: Tokyo Drift” outgrossed its costly “Miami Vice,” and Fox’s “The Devil Wears Prada” and Sony’s “Talladega Nights” proved to be among the season’s most profitable pics.
Meanwhile, “Poseidon” was a bust and “Superman Returns” did solid biz worldwide — but expectations were far higher than “solid.”
Given the $937 million worldwide gross for Disney’s “Pirates of the Caribbean” — which is on the verge of passing the first “Harry Potter” pic as the third biggest earner ever — it’s impossible to argue that tentpoles are passe.
But Hollywood is rethinking its strategies, given the topsy-turvy summer session.
Toons, once thought invincible, showed vulnerability, and the niche world failed to come up with a breakout summer counter-programmer, like “March of the Penguins.”
And summer proved that stars matter — or do they?
“For the last few years, there’s very little evidence that stars will sell a film,” says one studio exec. “Their presence alone has in no way, shape or form guaranteed box office success.”
Johnny Depp and Meryl Streep elevated their summer vehicles and WB execs privately muse that “Poseidon” would have benefited from marquee names.
On the other hand, Owen Wilson failed to duplicate his “Wedding Crashers” success with “You, Me and Dupree.” And there was evidence that Hollywood has limits when it comes to stars, such as the collapse of the Jim Carrey-Ben Stiller “Used Guys” and last week’s noisy divorce between Tom Cruise and Paramount.
“In a time when everyone’s wondering who is a consistent performer, Adam Sandler’s films have consistently been in that $130 million range,” points out Columbia marketing and distrib chairman Jeff Blake, whose studio rolled out Sandler vehicle “Click.” “He’s just hit various marks in the bullseye.”
Pics with moderate budgets were breaking through, a turnaround from last summer.
“Everybody had been saying that you could only make money on films budgeted between $10-$20 million, or the mega-budget pics,” one Wall Street analyst says. “The $30-$70 million range was considered the death zone. This theory was turned on its head this summer.”
The summer’s surprise performers generally fell in this budget range, including “Prada” and “Talladega Nights: The Ballad of Ricky Bobby,” costing $35 million and $73 million to make, respectively.
“The proclamation last summer was that the tentpole strategy was the golden ticket,” says one studio’s marketing head.
“But there’s a broad range of product working, and also movies of every shape and size that are not. If there’s any lesson, it’s that if you have a film that doesn’t connect, there is no safety net any more,” he adds.
The 2006 summer B.O. (May-Aug. 20) is at $3.4 billion, up 6% over the same frame last year. At this point, a year ago, the 2005 summer B.O. gross was at $3.2 billion.
“It’s true year-after-year that good product wins,” says Walt Disney Motion Pictures Group prexy Mark Zoradi. “The public is good at voting for what they like. So whether it’s the World Cup, or other entertainment venues, at the end of the day this summer’s movies were simply more appealing to audiences.”
But other than reducing spending and not aiming for the fences every time, there aree other lessons from the summer sesh.
Hedge with Funds
Come September, execs will likely be picking out thank you gifts for the managers of Hollywood’s latest financial funds, which put up half the money for any number of high-flying studios this summer. (See separate story).
If it weren’t for co-financing buddies Legendary Pictures — which is entirely backed by private equity — and Virtual Studios, Warner Bros. would have been facing its losses alone. And combined losses for “Poseidon,” “Lady in the Water” and “The Ant Bully” could be as much as $100 million. Thanks to its partners, the studio’s risk is dramatically reduced.
Then again, if a pic does pop, a studio could find itself reluctantly turning over a large chunk of change to its partners. So, luckily for Disney, “Dead Man’s Chest” may be the summer’s only tentpole wholly owned by a studio.
Stay in Touch with Global Tastes
In America, the word “soccer” is synonymous with moms and minivans. Around the world, it’s a global religion that keeps auds in front of TV-sets and away from multiplexes.
For the most part, all studios avoided worldwide tentpole releases during the Cup, June 9-July 9, opting instead for targeted rollouts that would appeal to non-sports fans: “The Break-Up,” “Cars,” “Over the Hedge.”
The Cup monkeyed with day-and-date release skeds, forcing studios to stagger the releases of such big-budget pics as “Superman Returns” and “Pirates.”
Pics that had international themes and actors seemed to pay off, from “Da Vinci’s” Audrey Tatou and Jean Reno; “Pirates”‘ Orlando Bloom and Keira Knightley; and “Tokyo’s” Asian cast and locales which helped draw 60% of its $143 million world B.O. from abroad. “Superman” was tagged as too American and got closer to 40% of its dough from foreign auds.
Is Hollywood Over-Animated?
“Over the Hedge” outgrossed “Mission: Impossible 3” domestically, and “Cars” is so far the No. 2 pic of the year Stateside behind another Disney pic, “Pirates.” But “Cars’ ” inability to rev up some foreign auds, followed by the squishing of Warner’s “The Ant Bully,” and a summer glut that has included Sony’s “Monster House” and Paramount’s “Barnyard” are causing concern that the once money-in-the-bank biz of CG pics is getting increasingly tricky.
“It’s clear that there are more animated releases this year,” says Zoradi. “But we feel very good about the success of ‘Cars’ and, like any cycle, the marketplace will (decide) if there are too many (animated pics) in the marketplace.” He adds that he doesn’t see the same number of animated pics skedded to arrive next year.
Where Have All the Indies Gone?
Fox Searchlight jumped to the top of the summer heap with “Little Miss Sunshine,” which it had purchased at Sundance for $10 million. But overall, indies did not break through majorly as counter-programming over the summer.
Al Gore’s global-warming docu “An Inconvenient Truth” had been the season’s lone breakout before “Sunshine.” Some of the indies sent out movies that would appeal to the masses: The Weinstein Co. put its “Clerks II” on 2,150 screens via MGM, hitting almost $24 million, and Lionsgate’s horror pic “The Descent” waded into $22.6 million off of more than 2,000. But limited release arthouse fare settled for singles.
How is $200 Million a Dud?
“Superman’s” cost became a news story even when the film was shooting as fanboys fanned flames of the pic’s escalating pricetag. As a result, when a studio tries to tout big numbers, fans and journos still label pics as flops.
Despite their grosses, pics as diverse as “Cars,” “Mission: Impossible III” and “Snakes on a Plane” also had to battle the “disappointing” label.
“Because the financial side of our business is shrouded in mystery,” says one studio exec, “what gets written is that your sequel opened at half the previous film. But the deals on the movie may have been such that the result is incredibly profitable.”
Pamela McClintock contributed to this report.