The Reckoning: Why the Movie Business Is in Big Trouble

Movie Business Consumer Demand

Anyone in the movie business who tells you they’re not scared stiff about the future is probably lying.

There’s ample reason to be fearful. It’s been 128 years since Thomas Edison first helped usher in theatrical exhibition with the creation of the Kinetoscope, an early motion picture viewing device. In the ensuing century, cinema has given audiences Garbo and Rin Tin Tin, introduced “May the force be with you” into the cultural lexicon, and dazzled crowds with man-eating sharks and dinosaurs so massive and menacing they could barely be contained on even the most cavernous of screens. Despite that history, there is mounting anxiety among theater owners, studio executives, filmmakers, and cinephiles that the lights may be starting to flicker.

As consumer tastes and demands change, Hollywood is scrambling to adapt. Instead of surrendering to existential dread, studio chiefs and exhibitors are showing a greater willingness to experiment, particularly when it comes to releasing movies in the home within weeks of their theatrical debut for between $30 and $50 per rental. If that comes to pass, it would represent the biggest distribution and exhibition shakeup since the introduction of the DVD created a home-entertainment windfall in the late 1990s.

Some industry veterans are unconvinced that the business can pull it off. Structurally, these studios and the agencies and exhibitors that orbit them are too sprawling, too slow-moving, and too entangled in a dizzying web of antiquated business practices and associations to respond effectively to the digital era.

“The major studios have not been choreographed or run to be entrepreneurial,” says Amir Malin, managing principal and co-founder of Qualia Capital, and former CEO of Artisan Entertainment. “It’s a system that’s been intoxicated with a ‘cover my ass’ mentality. Simply put, it’s a defective system, and when a business paradigm is defective, very good people start doing things that are counterproductive.”

There are two major problems gripping the industry. Younger audiences are becoming more interested in streamable content that is accessible on their iPhones or tablets. They’ll still turn up at the multiplexes to see the Avengers save the world or watch Han Solo slide behind the wheel of the Millennium Falcon, but despite a few massive blockbusters, the zeitgeist continues to shift from the big to the small screen.

“I think the proof is right in front of us with what’s happening in cable and streaming services,” said Lorenzo di Bonaventura, producer of the Transformers films. “Directors want to go there, because they’re able to tell interesting stories…. That’s where the chances are being taken. That’s where the action is now.”

The other problem is that the financial underpinnings of the business are showing signs of strain. Nowhere is this clearer than the barriers that are springing up between Hollywood and its most reliable sources of capital. The smart money left the business years ago, partly because of Silicon Valley’s promise of fortune, but also because investors were put off by creative studio accounting that turned hits into financial losers.

Now new money — particularly that which has been pouring in from China — appears to be drying up. Chinese authorities are putting tight restrictions on foreign investment, limiting the flow of capital into the entertainment industry. That resulted in a failed $1 billion sale of Dick Clark Productions to Dalian Wanda, and the potential collapse of another $1 billion slate-financing pact between Paramount and two Chinese players, Huahua Media and Shanghai Film Group.

“They think Chinese companies are overpaying for Hollywood and they’re slowing it down,” says entertainment attorney Schuyler Moore, a partner at Stroock who has been involved in arranging slate-financing deals for the likes of DreamWorks and Warner Bros. Moore thinks that Chinese investment may be gone for good, and that other forms of venture capital will transition away from film to emerging forms of popular entertainment such as virtual reality. “The interest is not in the traditional film model,” says Moore. “All investors see there is trouble.”

Optimists maintain that revenues are still growing. The domestic box office hit a record $11 billion in 2016, and the global box office reached a new high-water mark of $38.6 billion. Three months in, 2017 has already fielded such blockbusters as “Beauty and the Beast” and “Logan.” But that growth is being driven by higher ticket prices and inflation. Simply put, fewer people are going to the movies. U.S. and Canadian attendance has failed to match the 1.5 billion admissions the industry hit in 2004.

“You’re spending more money to reach less people and to less effect,” said Adam Goodman, former Paramount president and founder of Dicotomy. “You’re opening movies only to see them burn out at the box office.”

Just-released figures by the Motion Picture Assn. of America reveal that attendance in 2016 remained flat.

Gone are the days when studio chiefs were true moguls, ruling over the lots like sultans. Today, studios are a small piece of sprawling media and technology empires. Most of the movies are made far away from Los Angeles, in cities like Atlanta or New Orleans where tax credits are the most generous. All of the studio executives who make greenlighting decisions have bosses higher up the corporate ladder, and the films they produce are becoming less and less integral to the bottom line. The Comcasts and Disneys of the world make more money from their cable or consumer product lines than from movie ticket sales.

Source: MPAA

Perhaps it’s the mounting fear that an iceberg is approaching, but studios and exhibitors do seem closer to signing that grand bargain which would enable films to get early home entertainment releases for a higher price. As an enticement, distributors are willing to cut theaters in on a percentage of their digital sales. Six of the seven biggest studios — a group that includes Fox, Paramount, Lionsgate, Sony, Warner Bros., and Universal — are having unilateral discussions with major theater chains like Regal and AMC.

Currently, big theatrical releases are supposed to wait roughly 90 days before they’re available to be sold or rented.

But studios argue that’s too long, and they want to shrink the window in which theaters have exclusive access to their films. With the DVD market fading fast, they need to find a way to prop up home-entertainment revenue. There is a belief, accepted as dogma in some studio boardrooms, that streaming services like Netflix have conditioned consumers to access content whenever and wherever they would like it.

“It’s just such an obvious thing that has to happen,” says Jessica Reif Cohen, an entertainment and media analyst with Bank of America, adding that she thinks offering films earlier in the home may be attractive for people with young children.

“It may be an impulse buy, or they don’t have a babysitter, or have other reasons for why somebody doesn’t go,” she says.

Source: MPAA

At the very least the two sides are talking. In the past, exhibitors have been hostile when studios have tinkered with release windows. They’ve long believed that if movies are made available to rent or buy within weeks of their release, then customers might steer clear of multiplexes. Not wishing to become handmaidens to their own destruction, theater operators have warned of cannibalistic consequences, ready to man the barricades at any incursion.

A plan by Universal to release 2011’s “Tower Heist” two weeks after it premiered in theaters, for instance, was kiboshed after theater owners threatened to boycott the comedy. Paramount waded into the issue again in 2015, this time convincing AMC and others to allow them to release “Paranormal Activity: The Ghost Dimension” and “Scout’s Guide to the Zombie Apocalypse” as soon as they stopped being shown on a certain number of screens. Chains like Regal refused to show the film.

“A lot of the problem has to do with the unknown factor of consumer behavior,” says Eric Wold, an analyst at B. Riley & Co. “Will the consumer want to see a movie opening weekend regardless of knowing it’s only coming out on-demand a few weeks later? It’s going to be tough to come to something everyone agrees on.”

The talks have proven to be unusually complex. Because of antitrust laws, each studio must negotiate with every exhibition chain on an independent basis, making it difficult to establish an industry-wide model.

Both sides have invested millions of dollars researching at what price and after how many weeks a film is released in the home will consumers begin abandoning the cinema for the pleasures of the couch. Among the entertainment companies, Universal and its filmed entertainment group chairman Jeff Shell and Warner Bros. and its CEO Kevin Tsujihara are seen by exhibitors as being the most aggressive in pushing for a deal. Shell and Universal believe that $50 is too high a price for rentals, and are backing a lower-cost model. The studio would like all of the films it makes to come out on premium video-on-demand at a set time, likely in the range of between 20 to 30 days. Warner Bros. has been more willing to have a window of between 30 to 45 days, although it, too, would like to see the price come in at around $30 a rental. The Time Warner-owned studio thinks that some movies, particularly the bigger franchise films, might not be right for an early release.

Source: MPAA

There are corporate reasons that these two media companies are showing the stiffest spines around the negotiating table. Shell was sent to Hollywood by Universal’s corporate parent Comcast with the express purpose of finding a more efficient way to distribute movies. Comcast’s main business is cable TV, providing systems in the home to consumers, and creating content to flow through its cords via its NBC division. Similarly, Time Warner, Warner Bros.’ parent company, is poised to be acquired by AT&T, a telecom giant that wants to push films and shows to its network of smartphone users. They interface directly with customers in a way that studios don’t, and they make the bulk of their profits from subscriptions and transmission fees, not from the box office.

Many of the studios that are more dependent on ticket sales seem more flexible. They may be willing to agree to a model where films could reach on-demand platforms as soon as they fall below a certain screen count. The thinking is that if a film is no longer attracting crowds in theaters, there’s no reason it can’t be offered in the home.

Studios and exhibitors are hitting the negotiating table armed with data they argue shows that, at a certain point and for a specific price, premium on-demand either becomes additive or it cannibalizes the exhibition business. Then there are questions about how the films will be distributed. Will it be through iTunes and other popular rental services, or via some other third party armed with antipiracy technology? Because of their size, studios have largely limited their discussions to the country’s biggest chains, but if they reach a domestic agreement, that will likely change terms for foreign exhibitors.

Executives who have been involved in the talks say the issues are thorny, and the parts that intersect and must be addressed are myriad. But they seem willing to engage as never before.

“From my perspective, the people that fund movies should have a loud and strong and important voice in how they recoup their investment,” says Tim League, founder of Alamo Drafthouse, an independent theater chain. “I don’t think theaters are grandfathered in to having a long, exclusive window. … I just hope that however we decide to experiment with windows, it’s based on data and made rationally with all the players invited to the table.”

The uncertainty surrounding the film business and the direction it needs to take in order to survive is also being manifested in the corporate suites. Sony Pictures is struggling to find a replacement for outgoing CEO Michael Lynton, having cycled through likely candidates such as former Disney COO Tom Staggs, while considering more offbeat options like former Hulu head Jason Kilar.

Then there’s Paramount, in desperate need of a turnaround, which appears to be close to hiring former Fox film chief Jim Gianopulos. “I don’t remember a transition like this, with two studios without studio heads,” says producer Beau Flynn. “I think people are concerned about taking those jobs because there’s a little bit of a reboot going on. What does a major, global motion picture studio look like in 2017? There are real questions about how your studio fits into this new world.”

Even as the names at the top change, filmmakers are trying to figure out a way to keep pace with rapidly evolving tastes. Projects can take at least two to three years to develop and put into production. They require an enormous outlay of capital and an appetite for risk.

“The big question you lose sleep over every night is, with everything that can change in 12 to 18 months, is a great story with great characters unique enough to still attract an audience?” says “Arrival” producer Glen Basner, CEO of FilmNation.

When studios have faced competition in the past, they’ve adhered strictly to a formula of size matters. In the 1950s and ’60s, for instance, the growing influence of television prompted studios to invest in elaborate biblical epics and, later, musical extravaganzas as a way of differentiating the big screen experience. This impulse toward gargantuanism continues. To beat back against the YouTube tide, studios are flooding theaters with superhero adventures, reboots, and animated fare.

No one can top Disney in this realm. With an arsenal that includes LucasFilm, Pixar, and Marvel, the studio has sucked up the rights to everything from “Star Wars” to “The Avengers.” The company earned 61% of total industry profits in 2016, according to research by Cowen & Co.’s Doug Creutz, at a time when the movie business’s earnings shrunk 19%. That’s left the non-Disney pack with blockbuster envy.

In this climate, studios are steering away from mid-budget dramas, seeing them as too dicey a proposition with a limited upside. That’s led to fears of comic-book fatigue, as studios dive deeper into sprawling graphic-novel universes. For now, the strategy is working — four of the top 10 highest grossing films last year were based on Marvel or DC Comics characters. But there are fears that these movies lack the spark of freshness that inspired past generations, and that, ultimately, they’ll lead to diminishing returns.

“I do worry that we’ll get to a point where today’s tentpoles grow so homogenized that movie-going will radically drop off,” says producer Mike De Luca. “But before that happens, I hope more studios learn to chew gum and walk at same time — that they produce not only tentpoles, but invest in original, diverse storytelling as well.”

The irony is that it’s easier to make movies today than ever before. Digital cameras have made it cheap to shoot, and editing software is readily available to average consumers. Aspiring directors can literally make a movie on their iPhone, as director Sean Baker did with 2015’s “Tangerine.”

At the same time, Netflix and Amazon have entered the movie scene looking for content, and Apple is supposedly weighing the idea of buying films to distribute exclusively. Even off-beat companies are looking into the film business. PepsiCo was at last year’s Sundance looking to snap up projects that could connect with a younger, music-loving crowd, while companies from Best Buy to BMW are wading into original programming to sell televisions and luxury cars. There are more buyers than ever before for films, and more ways to get them in front of audiences.

“It’s the Wild West in terms of content,” said De Luca. “All the old traditions and formats are up for grabs.”

James Rainey contributed to this story.

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  1. T Vadear says:

    As the industry tries to make abnormal behavior appear to be normal the fewer movies I watch. The more I see actors or actresses try to use their influence or threaten to leave the country to sway voters or how to vote the fewer movies I watch. If I wanted to watch porn shows I would go to an adult movie house. I also avoid using products from advertisers that promote these movies. The majority of movies are worthless crap.

    • RXG says:

      You’d actually go to a filthy porn theater instead of just getting millions of hours of it FOR FREE on your computer or phone? How old ARE you, man?!?

  2. antero946 says:

    I read this whole article!

  3. antero946 says:

    I read this whole article.

  4. Compared to ever-changing forms of music, art or architecture through the decades, the Hollywood feature is fossilized in amber, both in terms of the underlying business model and the structure of its content. Our attention spans are mobilized and our content consumption is atomized. The form factor of a Hollywood movie is incompatible with both.

    • M33 says:

      That’s nonsense, recorded music is still the same audio waves of tuned sound, most visual arts are two-dimensional, sculptures are generally the same three dimensional forms and architecture is still generally a four-wall structure. That’s like saying books are “fossilized” because they are still printed on paper. Nothing has changed, the story structures used over the last hundred years and in films today date back to Aristotle’s times. That sounds like blow-hard intellectual gibberish by someone who doesn’t understand our industry. You either like movies or you don’t, you either like books or music or art or you don’t. Consumer behavior has changed in that we expect what we want, when we want it, and where we want it and the lines of content formats are changing, we are watching more short form content online. This does not replace the theater experience. Less people are going to theaters because there are less movies drawing them there. Yes, there are flaws in the business models on the production side, but theme parks like Disneyland have managed to raise their ticket prices many times over the past 20 years and their attendance is going up. It is purely a value proposition, film is no different than any other sector of products or services who rely on the laws of supply and demand. Hollywood is over supplied with bad product causing a weakening in the demand, if they are going to survive they need to make a product that people want.

    • tomspud says:

      No offense but is there a deliberate effort to verbalize replies in the most overly complicated way possible or an alternative and nonsensical argument used to justify fancy adjectives and metaphors? Once we try and decipher your post and if your reasoning is correct then the whole industry would be doomed. People actually still do watch movies and TV you know so it has absolutely nothing at all to do with attention spans. If you asked 100 people why they don’t go to the Cinema anymore I’ll bet around 70% of them would say the rip off ticket prices. Simple.

  5. llong says:

    They have to go virtual 3D in Theaters. The technology is already being tested and used. They need to provide an experience that people can’t get at home including vibrating the chairs, smells, better sound and an all around “emergence experience” to keep competitive and draw in the audience. ~ Enlightened Life Entertainment

    • ItsBlade says:

      If thy’re anything like me, I think they’d say that they have an acceptable equivalent experience available from their sofa, in their pajamas, with a bowl of their favorite ice cream in their lap, with the ability to pause the experience when they need to pee.

      It’s only the true zeitgeist movie that pushes me into the theater these days, when I don’t want to miss out on what everyone’s talking about. For virtually everything else, I’ll pick from the numerous excellent movies available at home, that were in the theater a few months earlier.

      • llong says:

        Yes, that is what I mean. They really need to make it something special for people to go out to see and experience it.

  6. Marcy says:

    The future of multiplex theater could be following the ill-fated drive in theater. The cinema experience has changed dramatically since the inception of the multiplex in the 1980’s. Auditoriums have become noticeably smaller, sometimes housing less than 100 seats and smaller screens, which took away from the cinema experience. The DVD and influx of chains such as Blockbuster and smaller Mom and Pop video stores in the 1980’s hit the movie theater business hard. In the present, streaming services such as Netflix, make movie viewing more convenient. The theater as we now know it will likely be a thing of the past in the next decade.
    As an experienced Theater Manager and Projectionist with over a decade of experience, I can tell you that the bulk of the profits go to the motion picture studio with typically a 55/45 percent split of the profits. The real profit for the theater itself is in the sale of concessions. While I agree that both ticket and concessions are both high, there are things you can do to save money at the theater. Look for bargain days, typically on a Tuesday for cheaper admission prices. Ticket are usually lower for the first show or matinees. Ask about discounts for students, senior citizens or military. Join the club membership for larger chains and take advantage of coupons issued at the box office, such as at Regal Theaters for reduced concession items like popcorn. Parents look for kid packs, usually a popcorn, small drink and candy at reduced prices.
    Although, I no longer work there, I still love going to the movies. I consider it a day out and I’m prepared to spend a few bucks. I hope this helps!
    I still enjo

    • tomspud says:

      I can’t see how you say that the bulk of the profits go to the picture studio and then say that the split is 55/45. So the studio gets 5% more of the takings? How is that ‘the bulk’? When you have an industry that makes over a 1000% markup on food it shows where the real problem is.

  7. tomspud says:

    An overly long report that once again emphasizes how far out of touch Hollywood is with reality. The fact of the matter, THAT I’VE READ COUNTLESS TIMES, is that no wants wants to pay upwards of £50 ($80) to take themselves and their family to to the Cinema to watch a movie. It’s as simple as that!!!!!!!!!!!!!! Once these greedy b******s at Hollywood accept this and reduce their profit margins (probably meaning giving up one of their holiday homes or a couple of sports cars) then perhaps we can make the Cinema experience better again? As for now, long the Internet and the myriad of Torrent sites that take more money out of the pockets of the real robbers.

  8. g alfred says:

    There is something missing from the thought process! The movie theater experience is no longer something people look forward to. Prices have climbed to a point that other entertainment venues are an option. Both ticket price and refreshments are “ridiculous” according to recent survey of patrons. I am currently consulting to a company working for a large theatre group. They are developing a theater environment that will be a complete entertainment complex not just a movie theater. One other thing that keeps people out to theaters is being disconnected from their smartphones for 2 hours! If they can’t text they would rather be someplace else!

  9. “There are two major problems gripping the industry. Younger audiences are becoming more interested in streamable content that is accessible on their iPhones or tablets.” Well, Hollywood, there’s your problem. Let other industries form to chase the dollar that younger audience never pays to stream content. You see, they want it free. Instead, refocus movies on Baby Boomers and Generation X, and simply improve story quality. Doing those two things is all it takes. And there, your problem’s solved for you.

    Whence this inane focus on “younger audiences”? Who GIVES a f what younger audiences want or are doing? Maintain loyalty with the audience that BUILT Hollywood: Boomers and Generation X!

  10. Bill says:

    It’s pretty damn simple Hollywood – Tell stories and entertain us, stop trying to push agendas down everyone’s throat while regurgitating crap from the past. Make quality entertainment and I will GLADLY spend the money on a regular basis to go see it.

  11. Former Moviegoer says:

    I find it a little sad that theater chains would spend “millions” to research how timing and prices of home release would affect theater ticket sales, but not one of those chains will invest in cell signal blockers or an usher who actively quiets (and if necessary ejects) disruptive movie goers. I stopped going to movie theaters almost entirely well over a decade ago (closer to two) because of the near certainty that I won’t get to watch and enjoy the movie due to a**hole moviegoers. The theater chains are and have been well aware of this problem, but they’ll try to place the blame anywhere else rather than do something about an experience over which they have complete control.

    I would be much more inclined to spend money at a theater if I knew I’d actually get to watch the film. The full big screen experience is different from anything I can get at home, but at least at home I know I’ll actually get to see the movie. In the theater, I’m being charged $13 to $15 per ticket for the “privilege” of listening to strangers’ inane commentary, questions and cell phone conversations, and to be distracted by the light from various devices (often brighter than the movie screen). Paying an arm and a leg to *not* get to see a movie is why I don’t go see movies in theaters; it has absolutely nothing to do with when the movie will be released for home viewing.

  12. Anonymous Studio Girl says:

    OMG YOU GUYS! I swear, I’m surrounded by people who can’t think for themselves & just parrot each other all day long again… And that is why Hollywood is in trouble! Not because of the technicalities of whether people watch a movies on a DVD players or iPhones or out of a freeking toaster. The problem is not, and never will be, that there is too much content. The problem is that there is LESS good content than ever!

    But, you know what, as this will take only a few minutes to write, here’s a real analysis. It’s the least I can do for the industry that I love. You’re welcome :)

    The reason the business is in the condition it’s in is because:

    1. The entertainment business has forgotten that it’s the ***entertainment*** business.
    2. Hollywood’s foundation–that of good writing–is now composed of some of the worst writers ever.
    3. Hollywood’s executive side is also composed of some of the worst/most-illogical business minds ever. (FYI: Bad script don’t buy themselves.)

    By the way, I work at a studio. And I’m 28. And I probably went to the theater on my own twice last year. And once this year, which was a mistake. With the exception of several premiers I went to, during which I wanted to cry after 20 minutes because they were such a drag!

    But I remember loving nothing more than going to the movies. And I’d literally go every weekend with friends / family — even though the closet theater was a a little over an hour away from the boarding school I went too & almost three hours away from the vacation house my family would spent most of our summers at! Movies just used to be so good & so worth seeing on the big screen. Or any screen for that matter. As what specific screen you watch things on is apparently just the most profound issue of our lifetimes to some people…

    (Sorry, I had to lol!)

    But anyways, up until around ’06/’07(??), I don’t ever remember leaving a theater without a big smile on my face. Furthermore, movies that used to be churned out were the kind everybody would watch over & over again. Movies like Beetlejuice, Legally Blonde, Jerry McGuire, Pretty Woman, Gladiator, Heavy Weights, The Lizzie McGuire Movie, Some Like it Hot, Gone With the Wind, Moulin Rouge, The God Father, The Bachelor & The Bobby Soxer etc… They were all just so fun & entertaining! :) (Even all those cheap TV movies that came one the Disney Channel like Zenon & Halloweentown were just zillion times better than most of the major features people spend a quarter of a billion+ nowadays making!)

    Which brings me to my point. The majority of todays movies (as well as TV shows) are the worst!

    Obviously some of the remakes are really great (e.g. Beauty & The Beast) & are raking in money for a reason. But remakes are a credit to the writers of the past and, furthermore, making remakes is unsustainable as eventually you will just run out of ones to make. But aside from remakes and several great original films (Neighbors 2 for example! :D), everything made is either ‘art for the sake of art’ crud (e.g. La La Land), education/politics preaching buzzkills (e.g. Tomorrowland), or a movie that is so bad that a part of you wonders if it was written/greenlit as part of a conspiracy to destroy a studio (e.g. the recent Ghostbusters, Aloha, the upcoming Oceans movie), or else just another version of Gone Girl (or in regards to TV, another version of CSI of which there have been 10+ at this point!).

    (By the way. Before somebody says it. Whatever your political view is, I love you for having it and God bless you. In the case of Tomorrowland for example, I totally agree with the message of that film. And I think that taking care of your environment is so important–something which I was taught by my parents and school. But FYI: I think that not being a total buzzkill is important as well. And I think that, if you have chosen to work in the entertainment business, making actual entertainment to the best of your abilities is important and a matter of ethics as well. It may be an unwritten contract, but when people go to the theater, they’re giving you money for a little fun & escape from life. So honor that contract. Or else, if you think entertainment, which bring happiness to so many people, is frivolous & below your ‘intellectual state of mind’, go work in a different industry. Also, in regards to writers, if you’re a good person, then why are you so worried about preaching goodness to the world. Shouldn’t that goodness, as it’s true and actually part of you, just inherently reflect in everything little thing you do? Furthermore, before someone defends “La La Land” as a movie that made money. Really? Does tricking people into seeing a high school film thesis (which a team of two girl in my class did way better) with a massive publicity blitz count?? I mean, when I saw that trailer I thought it was the most boring thing on earth. But the movie was just getting all these awards & nonstop raves by magazines such as Variety, so I decided to give it a chance. And it was the wooooorst! And everybody I ever talked to about it said the same!! Glad you made back the return you wanted Lionsgate, but you’ve made a lot of people a lot more cynical about critical reviews so real good job you twits behind that scheme….)

    That said, in regards to all those people always having those fake-intellectual discussions about tentpoles versus real art…

    Weren’t all those fantastic movies I mentioned above (regardless of their genres/whatever) tentpoles? Didn’t they rake in tons for studios in theaters? And didn’t they make tons in DVD/VHS sales & TV reruns? I mean, when did the concepts of blockbusters & good writing become mutually exclusive? Because, in my mind, and just based of basic logic, a genuinely great story is what actually guarantees a great blockbuster. (For example, James Bond would have never become the iconic brand it became if it wasn’t a product of such great writing. Those practically plotless new Bond films obviously only still make money because of the incredibleness of those old ones which people, including me, just don’t want to let go of.) Furthermore, when did it become that movies had to bore you to death & suck as hard as possible for them to be upheld as ‘art’? And when is it that people became so obsessed with ‘art for the sake of art’? Is that when Hollywood become hijacked by a bunch of untalented/not-very-clever dweebs who were only ever able to get their foots into Hollywood by flashing their Ivy degrees (which is really just product of doing your homework diligently all your life!) & mesmerizing people enamored with Ivy-hype with some fancy sounding ‘intellectual terminology’ despite, realistically not having an ability to do literally nothing other than just regurgitate random things they memorized for their midterm exams???

    (Btw: I went to Harvard Law. And believe me, while I play it up all the time in real life, it’s not very hard to get into. I think a lot of people are just too intimidated to apply. And I’m not saying that to be humble. I mean, one of my classmates there literally didn’t even know what Beijing was lol! I thought he was joking initially, because how does someone not know that in this day & age about Beijing? That’s like not knowing New York or London… But clearly, it is possible… He was a sweet little soul though, so I don’t mean to badger his character!)

    But anyways… I’m sorry to be so blunt and sound so rude… But people there’s just no way to sugarcoat what’s going on at this point!

    That said, obviously Hollywood’s writers are sweet & hardworking people. And writing is, while it looks easy, just a very hard job. And one that only a rare few on this planet can do well commercially. I mean, it’s just one of those jobs that requires more than just hard work & diligence. It requires the kind of talent and cleverness and personality that you’ve just got to be born with! It’s like a whole package of things…. Therefore, if you’re one of the untalented writers reading this, don’t take it personally!

    Also, in regards to most writers currently working in Hollywood, they’ve got obviously got some talent. It just lies in a different industry. In my opinion, from the way so many of them are so passionate about regurgitating stereotypical ‘intellectual people’ talking points & forcefully enlightening everybody with their knowledge (even if their knowledge only consists of things everybody already learned in high school!), they would make for great high school teachers :) (An important as heck job btw! I don’t mean that sarcastically!!) Same goes for most of the current execs running the show. Most of them just are most suited to be teachers (elementary though in their case, as management is key there!) or else… Accountants! :)

    But here’s the thing though…While bad writers are part of the problem, are they the root of it? I mean, you can’t blame someone for giving their dream a shot, right?! In fact, people should always be encouraged to follow their dreams, as you will never know what you’re capable of unless you try. And especially in the case of Hollywood, as we need new literary talent desperately, we won’t be able to discover new talent unless people actually interested in giving screenwriting a shot send us their specs… But why is though that so many bad writers are actually working professionally? And why is it that, coming from someone working in development, it’s always the same crappy writers whose material is just non-stop circulated??

    Which brings me to my next point. The root of the problem really is the majority of execs working at studios out here. Because how hard is it do do a job where all you’ve gotta do is pick a good script out of the pile? I mean, did someone force any of these people to hire the worst writers out there & buy/greenlight scripts like Aloha and Imaginary Mary (upcoming flop, mark my words!)? And did someone force them to not go out there & start scouting their hearts out for the new literary talent that our iconic industry will eventually be ruined without? I mean, if agents no longer do their jobs and just send the same horrible scripts by the same clients to us, that doesn’t mean we can’t scout on our own… Because if there were so many talented writers working in the past, at least the same amount (if not more due to population growth) exist today. We just need to find them. Aka: In other words, we just need to all do our jobs in the manner of those great business people (e.g Aaron Spelling) who came before us.

    That said… In regards to actually being able to do your job…. Obviously though, once again, just like most writers, all the execs I know are such sweet & hardworking people. And so I feel bad for writing this. But they are just not the kind of guys Aaron Spelling & those those original Warner Brothers were. I mean, I wouldn’t go work as a brain surgeon as I know I don’t have the necessary disposition to deal with doing a job where I’ve gotta just follow instructions to a ‘T’ like that. And so, in the same way… All these execs working (some mentioned in this article) just shouldn’t, once again, be working in business where don’t have the necessary competency (or disposition!) to make decisions that require thinking for yourself as opposed to just copying one another & falling in line. Hence, the 10+ versions of CSI & multiple Gone Girls…

    But anyways, that’s all I wanted to say.

    That said, maybe there actually is a conspiracy going on or something and it’s like the Manchurian candidate — except this time it’s the studios that have plants to destroy our economy through our industries. Because, I mean, there is dumb & not knowing what your are doing… But this level of stupidity in the decisions being made, and the lack of basic common sense being used, and these silly talking points that are always just being repeated by various people (Stacey Snider was saying stuff similar the other day), is just a whole other level… Lol! :)

    • RX says:

      Wow. Stumbled across this article today, and then this insanely long comment. Once I got to “And I’m 28”, though, I stopped reading because I knew the opinion of this pseudo-14-year-old didn’t actually matter.

    • Jam says:

      Wow. Were u drunk when u wrote that? I’ve never seen anyone write so much after an article. About stuff not even related to the topic. Get a life. Harvard grads must be cringing.

    • Garrett says:

      All I got from that horrible and manically written, pedantic tirade, is that you are the problem. You’re a 28 year old preaching as though you know something, yet you sound exactly like all the other annoying, prissy studio execs that speak loudly without anything to say, and offer pointless notes on scripts, just to remind your bosses that you exist and matter. And perhaps your sophomoric personality is a desperate attempt to convince yourself that you exist and matter, and so you are slowly losing your grounding in reality and becoming unhinged as every day proves to you a little more that your existence is meaningless and nobody cares what you have to say, until finally, you snap and vomit your inner most anxieties onto a comment section. Here is a fact: 28 year old studio executives perform the least important job in Hollywood. You do absolutely nothing of value and possibly just make things worse. After reading your post, I can tell you with total certainty that you are not good at your job and nobody likes you, but if you keep at it for a few more years and try not to act like such a know it all, you might get to take the training wheels off and start performing your job at a high enough level that maybe, juuuust maybe, you will contribute in some small way to the good work of other people that are far more intelligent and creative than you are.

      • Nick says:

        Had to login to write this comment.

        Project much? You’re doing it here. Her comment, as an insider, made lot of sense. Yours just goes and attacks her post.

        How about this, sir: ***you**** do nothing of value, at least here in this comment section. You write badly, too.


  13. Joshua says:

    Hollywood you lizards! If you make quality movies say like LOGAN people will come out in droves to see it. Movie exhibitors also have to stop relying on concessions to pay the bills. No one wants to pay your 1000 percent inflated prices! If you build it (properly without restraint) we will come.

    • adam says:

      The decline in attendance has nothing to do with any kind of perceived decline in quality of films. It has everything to do with the fact that people under 30 prefer to stream a movie from their mobile device than to see the movie in a theater. The WAY the consumer is choosing to consume their media is changing and it will keep on changing regardless of whatever the “quality” of movies today might be. People are not losing their interest in movies. They just don’t want to watch them in a movie theater.

  14. So what says:

    Well, your products suck now. You became hyperniched and cared way too much about the 15-29 morons who may buy a couple things, but nothing of value. You partnered with less than honorable financiers for easy money, and lost a generation of moviegoers. Now you’re still going the wrong way with foreign financiers. Just make your mind control party a private affair, and pass out Egyptian idols to each other off camera. Oh, and fuck off.

  15. Kevin Bowen says:

    Per capita movie ticket sales are about what they were in 1967. And it looks set to go up this year, And the decline has happened in the context of a bad economy.

    Usually the “The End Is Near” talk comes around when Hollywood is out of touch with its audiences. For all the talk about straight-to-streaming movies, there have been only a handful that anyone has actually cared about. I would also say, in reality, there are relatively few superhero films when considering the amount that the market could probably bear. There were like, five, last year. Considering its popularity, that’s really few.

  16. M33 says:

    I love how the “implosion” of Hollywood is being blamed on high ticket prices and streaming services like Netflix and Amazon. The real reason this is happing is that Hollywood has been taken over by corporate hacks and Wall Street suck-ups, creative decisions are being made by lawyers and business school graduates. The original Hollywood studio system was built by creative people who had balls and followed their gut instincts. Film sets and board rooms are filled with executives who are too afraid to do anything innovative, they would rather drink from the tiny pool of “talent” and continue to make the same movies over and over again. They all look and sound exactly the same, the stories are predictable and boring. Film is an art form and it can’t be quantified with data and statistics, innovation will always rise to the top.

    • Stan says:

      Yes, film is an art form, but I don’t necessarily think that the original Hollywood studio system was built by “creative people”. I mean, by the late 1910s the studios grew so powerful United Artists was formed so that artists could regain independence from the top executives. To be more precise, I think it was in the 60s and, in particular, the 70s where the studios were really letting artists be creative and take risks.

    • There is no way I can like M33’s comment enough. I can add nothing to this. He or she nailed it ALL, and I work here.

  17. Regi's World says:

    I love the idea of ‘Screening Room’, the latest disruptive business idea launched by Sean Parker. I would subscribe to the service right away. The theater experience is ridiculously romanticized by the opponents of ‘Screening Room’, given that most cinemas nowadays have about as much charm as a local tax offices. I would be happy to be relieved from lining up, getting shitty food for a shit load of money and being obstructed in enjoying the pleasures of the movie by youths who have missed their Ritalin ration, play around dopamine addicted with their cellphones and unwilling or just unable to hold their peace.

    Also business-wise I think it’s a great idea because it enables tens, maybe hundreds of millions of people deprived of a cinema within their reach to participate in the movie experience from day one on. In Germany, in the average everyone is 17 kilometers away from a cinema. And that means maybe hundred kilometers away from a cinema that actually shows any premiering movies at all. Because most of the provincial cinemas only show movies that have already premiered elsewhere. Even in all of the United States there are mostly not more than 3.500 out of 40.000 theaters premiering a movie – and that would be a big release! ‘Screening Room’ or something like it would be a truly fantastic move to democratize the movie experience because theaters are just too lazy to deliver it.

    • Erico says:

      It is your choice. I find a reason to care for cinema because it has given me a very personal experience since I was a kid. I don’t like to sound overly sentimental but it has to me a similar effect I have when I see a theater play. Probably there is people who are taking it personl but you can’t make it look like other people who don’t share your views are in la la land. Peace

  18. I don’t think one can replace the experience of going out to the movies with paying for a new film on TV $30 (especially vs tons of new inexpensive content on Netflix and VOD). This model will fail. The experience of going to the movies is here to stay. Also, look at the inflation-adjusted grosses of the all-time box-office champs on A great portion were made in the last decade. How can one say audiences are shrinking?

    • jedi77 says:

      Because the outsized BO performance of a handful of recent films (Force Awakens, Jurassic World) , doesn’t do anything to indicate whether or not people pay to see the other films that are released.

      in 2015 and 2016 only 29 films made more than $100 million.

      From 2009 to 2014, that number was consistently above 30.
      So while the pie may be getting bigger each year, less and less movies are dividing it up.

  19. DougW says:

    Research is great, but is anybody going to test market this new model? People will surprise you.
    Hollywood could also look to cut back on budgets a bit. Look at the third act of “World War Z.” And a superhero movie like “Deadpool.” The whole movie doesn’t have to spectacle.

  20. mjweir0317 says:

    They are willing to do anything except produce a variety of good films that appeal to all audiences. So basically if they can’t make their revenue off a single huge garbage film they don’t bother. They don’t want to do the work. They don’t want to make good pictures. They don’t want to hire talented directors and writers. They don’t want to spend any money putting different kinds of films in theatres. That’s what happens when you put mega corps in charge of things they know nothing about.

    It’s the sign of the times. Giant Company doesn’t care about anything but quick profit.

    More and more we are living in Idiocracy. Any day now the biggest picture will be a film about bare butts farting.

  21. elric301 says:

    A few notes, taken from direct talk to and overheard from movie theater patrons over the past 3 weeks or so:

    Movies costing an obscene amount of money. In a business where success is not a guarantee. It’s Entertainment and Art, not Food or Water. If your movie has to gross 500 million just to break even, you’re in trouble before it’s seen a single screen.

    Most screenings in the chain theaters today look like crap.Blurry, contrasty,
    2k doesn’t cut it, when spread to a screen larger then 20 feet or so. And there is zero incentive for the theaters to spend on better equipment.
    Even IMAX isn’t keeping up with proper projection and technology. It’s been years since they announced 4k, Laser Projection 12.1 sound,etc. And yet…largely in places like L.A. and N.Y. where one expects this like one expects the water to be on.

    All of this does not help in encouraging people to go out to a venue, where tickets are 10 dollars, a bag of popcorn starts around 6 or 7, and it just goes up from there. People need a reason to step out of their homes. Blindly putting out rehashes of the same thing, without even asking the audience if they’d like to see it, doesn’t help either.

    The audience has to WANT to go. WANT to see. Product…o’kay, it’s a mater of taste. But there’s little variety to be seen on a multiplex, where,say, Beauty and the Beast will take up nearly half the houses. That doesn’t leave a lot of room for anyone else.

    On Non Netflix streaming, one has a large selection of old and new movies to watch. At home. With often better sound and picture quality.

    Just reporting in from the trenches at the front lines.

  22. David says:

    I personally think the film industry needs a service akin to Steam for PC video games, where there would be a centralized storefront for multiple studios all the way from indie on up to the big name blockbusters, the ability to purchase and download digital copies of merchandise, an extra streaming service on the side with a modest fee, an early access program for movies that have yet to be formally release for home media and a digital representation of the user with a customizable profile and character, with sales of digital goods for said avatars and profiles driving the continued cost of server upkeep and client development.

  23. Another Poster says:

    Since 1968; the USA motion picture industry has been telling the 13-to-16 years old that they are old enough to pay adult prices, yet they are not old enough to see an R rated film without a parent and/or guardian.
    How about changing it to 17 and above pay adult prices, while the 16 and under pay children’s prices. Most theaters make the bulk of their profit from the snack bar.
    The cinema is one of the few businesses in the USA that gets away with being double standard mercenary hypocrites.
    Who will speak up for the 13-to-16 years old and their parent and/or guardians?

  24. Chris says:

    What is this the 10th year in a row I’ve read an article telling me of the destruction of the movie industry? Or is the 15th? Or 60th? And how come a few months ago I was reading about the end of Cable TV and this cites it’s success as one of the reasons the movie industry is in trouble.

    Sounds like a bunch of noise to have something to talk about and get eyeballs.

    Is releasing a movie 30 or 45 days after release in theaters (for 30-50 dollars!) really that big of a difference than the current 90 day model? Any movie I’m willing to wait 45 days for I’m willing to wait 90 days for. And unless I got a whole family I’m not paying 30 dollars to rent a movie and stay at home.

    Do we really think kids are watching YouTube videos just out of convenience or do they actually prefer that endless free content over a two hour movie?

  25. Colin says:

    Best solution: lower theater prices on admissions and concessions. This isn’t about tablets or phones or binging. It’s about GOUGING.

    • Rh says:

      Listen to this person

    • Chris says:

      I know right? How dare you charge me ten dollars to see a movie that cost you 200 million dollars to make! What a rip off!

      • mjweir0317 says:

        As I sit here pondering your comment, try as I might I can’t remember the last time I saw a film I thought was worth a 200 million dollar price tag. There has to come a day when we stop this endless CGI madness and actually make pictures about people again.

        I like action films and sci fi and comic book as much as anyone, but come on. In a world where people don’t have enough to eat we blow 200 million dollars on a film and expect to make it back? You can’t get much more craven than that without being a basketball star.

  26. j.k. says:

    Money has corrupted every asdpect of our lives. Film is no longer about art it’s about earnings. So much is sacrificed in quality and appeal. We are watching the dumbing down of culture in this country. Just look at how money has corrupted and dumbed down our government. Quite sad and depressing.

  27. Angry Asian Man says:

    Hollywood is still heavily segregated and whitewashed. As an Asian, I see virtually no characters who look like me on the big screen. I understand that Hollywood doesn’t care about my demographic, but don’t come crying to me about low ticket sales if I stay home instead.

  28. The keystone of Hollywood is exclusivity, p aranoia and greed. The cure is the “devolution ” and not evolution of the major film studios. When filmed entertainment is epitomized by something other than “numbers” then the motio picture will regain its value.

  29. Leon says:

    My wife and I rarely go to the movies anymore. Only when there’s a movie that really needs to be seen on the big screen, like the latest Star Wars movie, Lord of the Rings, etc. We go maybe once a year and some years not at all. We love movies, but usually aren’t in any hurry to see them until they hit the pay-cable channels.

  30. Make Critics Great Again says:

    The system has to crash so young artists can have a voice: let it happen.

    • adam says:

      Young artists already have a voice. There are plenty of arthouse/independent films being made already.

      • Make Critics Great Again says:

        Please. Young artists are living in poverty and constantly being scammed. Enough lies.

  31. John says:

    It’s deceptive to cite sean baker as a young filmmaker. Tangerine was his fourth feature.

  32. Lisa says:

    Yes, but this is the nature of the business. We can’t stop it from evolving. I doubt people will stop going to the theatres, just like people won’t stop going to concerts – there’s just something about sitting down with some popcorn and watching a big screen.
    When my daughters were young, if the film was PG, I’d bring them with me. No need for a babysitter.
    Sure, Netflix and Amazon have entered the scene, but we are social creatures needing social interaction. The whole point of theatre is to get out of the house and escape and enjoy some good storytelling. Nobody’s going to give that up any time soon.

    • Both David and Lisa below make some great points. Basically the two of you represent the full issue. Half see it the way David does and the other the way Lisa sees it. As for me, I only visit the theater around Oscar season to catch up and when there’s a big event, Like Avengers or Batman vs Superman. I also visit when there’s a huge word of mouth about a film. But the ladder, I tend to wait until it’s available for streaming to catch up. So I’m not sure where I fall in regarding what David & Lisa are saying. Great article by the way.

    • adam says:

      People are not going to stop going to the movie theater en masse. The problem is that not enough people go to the movie theaters in order to sustain the current Hollywood studio system as we know it.

  33. David K says:

    I’m sorry but, film is just not where it’s at anymore. This focus on global receipts takes any daring or originality out of filmmaking, The Oscars are not even what they used to be. The handful of films thrown up at the end of the year are not nearly as good as years past, and not even close to what’s happening on tv/streaming. The Crown, Big Little Lies, Handmaid’s Tale-these and more would have been films even as recently as a decade ago, and eligible for nominations, but not now. There is a palpable excitement for Game of Thrones, Fargo,Twin Peaks, Stranger things even smaller titles like Leftovers and the like. Can’t say the same about film, unless you are a comic book junkie or 10 year old.
    Let’s not even talk about the actual experience of going to the theater, which has become just dreadful. I still trudge out there for the interesting films, but they are becoming less and less, even here in NYC, where the choices are better than mainstream America.
    The business needs to recognize these changes and do something drastic.
    Adapt or die, it’s that simple.

    • Lisa says:

      In the old days, a continuing series of episodes was called a soap opera. The above you mentioned are TV shows, not film. To me, there’s TV and there’s film – two distinctive entities.

      • David K says:

        it’s not the “old days” and if you can’t recognize the quality difference between the soap opera of old and today’s work, then I can’t help you.

      • adam says:

        I think David’s point is that almost all of the creative risks are being taken on the TV medium, while film for the most part has abandoned that and makes films mostly based on proven and recognizable franchises.

      • Dez says:

        Both are motion pictures if you want to go in semantics.

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