The Gold Reel awards lack the aura of Oscar, but they are proudly displayed along the corridors of most major studios — a stark symbol of changing times.
The clear plastic trophies, given annually by box office tracker Nielsen EDI, recognize films that have grossed at least $100 million domestically.
That number once meant magic in Hollywood, but the shaky summer of 2003 is giving the phrase “Pyrrhic victory” a new and painful meaning.
A $100 million gross for films whose production and marketing costs have climbed well north of $200 million represents a stunning disappointment. And second-week drops now have reached as much as 70%, a figure that is unsettling even to hardened vets.
As event pic after event pic thrashes about like a newborn colt — most notably “The Hulk” and “Charlie’s Angels: Full Throttle” — Hollywood is confronting the failure of its great sales pitch.
Aimed at Wall Street and the creative community, the pitch was seductive. Following a few simple rules, it promised, can help us crack the blockbuster code. Among them:
- Build the movie around an established character or brand, like Lara Croft or the Hulk, beloved by a young filmgoing audience.
- Spend liberally on f/x shots and eye-popping action sequences. “Bad Boys 2” is larded with so many concussive f/x-heavy set pieces that its running time reaches 146 minutes long. “League of Extraordinary Gentlemen” features the work of 21 f/x companies, most of them small shops.
- Plant the seeds within the story for a licensing bonanza including toys, vidgame and other merchandise spinoffs that can be cross-promoted with the movie, a la “Terminator 3” or “The Matrix Reloaded.”
- Fill the script with product placement opportunities, much as “The Italian Job” or “2 Fast 2 Furious” did, to reel in sponsorship deals and help defray marketing costs.
- Target all four quadrants. If you have a comic book character like the Hulk, mix romance with the action to lure female crowds. If you have a “female empowerment” movie like “Charlie’s Angels,” throttle up the sex appeal for teenage boys.
- Market-test the movie and all of the promotional materials. If they’re not working, spend whatever is needed on re-shoots and re-edits.
Event films, Wall Street has been led to believe, can thus be fine-tuned in such a way as to take the risk out of the film biz.
The more such event movies and the fewer mid-budget dramas a studio commits to each year, the lower the risk.
The summer schedule is the zenith of that strategy. It is cheek-to-jowl sequels, remakes and would-be franchise building blocks. Especially in that gathering crowd, however, risk lurks for all contenders.
Tentpoles may sound new, but in fact the concept dates back to D.W. Griffith. It gathered momentum in the 1980s and ’90s as malls and megaplexes created an alluring platform for rapid return on investment.
This year, the biggest poles were planted in May, and the month delivered stellar grosses thanks to “X2,” “Daddy Day Care,” “The Matrix Reloaded,” “Bruce Almighty” and “Finding Nemo.”
In June, however, pics hit a wall, dropping 60-70% in their second week. Flagrant misfires like “Hollywood Homicide” and “Sinbad” crept into the frame. Following a lackluster July Fourth tally, overall domestic B.O. now trails 2002 by 4% and all-important summer receipts are off 3%.
Ads for Fox’s “League of Extraordinary Gentlemen” are refreshingly blunt about this hectic marketplace.
“In a summer full of sequels,” the announcer intones, “finally a ride worth taking.”
Some of these rides can be euphoric both for the public and for studio execs.
Disney is printing money thanks to “Nemo,” the latest splash by Pixar, one of the most potent brands going. Fox wowed critics and auds with a bigger and better “X-Men” installment, and grosses followed.
Beyond these two, it gets squishy.
Studio accounting methods have made it difficult to say definitively if big movies are hits or flops.
When a movie falls short at the U.S. theatrical box office, studios are quick to point out that the ancillary markets — especially DVDs and foreign box office — will make up for the shortfall.
But those markets are keyed to U.S. box office.
“After-markets are mathematically, directly tied to how the film performs in movie theaters in America,” one studio chief emphasizes.
And when all of those revenue streams are counted, it is a grave concern for studio execs when any doubt is cast on the viability of future franchise installments.
“Reloaded,” although a certified money-maker, set in motion the kind of self-scrutiny that characterizes the industry at present.
Barreling out of a cannon of worldwide hype, it roared to the biggest first week in history, but then took a precipitous 60% fall over the Memorial Day span. Its first four weeks of playtime will constitute a remarkable 92% of its final tally. The movie to beat entering summer will not be the No. 1 U.S. summer movie, and it will be intriguing to see if any of the lessons of May are applied to November’s “Revolutions” finale.
“Hulk” opened to $62 million. But that could wind up representing half of its final U.S. gross, leaving the potential for a sequel less than a sure thing.
Marvel Enterprises prexy-chief operating officer Bill James, describing blockbusters adapted from Marvel properties, says, “What’s so amazing about those movies is the Friday nights. The fans weren’t going to wait around and see if the movies were good. They were going to be part of opening night.
“The sure thing for a Marvel movie is, it will open. Our fans are loyal. We’ll give you your first few million ticket sales. It’s like having a star.”
But opening night is no measure of success in so claustraphobic a summer schedule, and star power wasn’t enough to send summer pics like “The In-Laws,” “Down With Love” or “Alex & Emma” to blockbuster grosses.
The $37.6 million launch of “Charlie’s Angels” was deemed a disaster in some quarters; that’s too severe, given the worldwide grosses, which the studio insists will approach $300 million. But the fact remains that $100 million domestically appears out of reach, unthinkable a month before the film opened.
“The ultimate definition of success for these films,” ICM exec VP Ken Kamins says of the summer crop, “is the extent to which the studio hits the budgeted, targeted box office result promised to their corporate parents. Some movies will make money, in terms of profit and loss, but cause strain internally, because they may not hit that target.”
Chris McGurk, vice chairman and COO of MGM, offers up “Legally Blonde 2” as an example of hitting the target. After opening in the imposing shadow of “T3,” the pic has racked up more than $60 million domestically, nearly double what its predecessor had brought in at the same juncture.
Made for under $50 million, according to MGM, and marketed with considerable help from promotional partners, the film stands to make a solid profit for the Lion. It is therefore a summer rarity: maybe not a home run but a double.
“Given the right economics, counter-programming can work in the summer,” McGurk says, citing “Notting Hill’s” $100 million march into a fierce “Star Wars” headwind in 1999.
But zigging when rivals zag is easier said than done, especially when the calendar is so full.
Indeed, the malaise of ’03 could continue into August, given the competition. Beyond just the strong day-and-date battles, many films in late summer face stronger carryover foes. That was one thing “X2,” for example, didn’t have to worry about in early May.
On July 18, “Bad Boys 2” hits theaters, along with “Johnny English” and “How to Deal” scrapping to take what’s left on the table.
The following week, “Lara Croft Tomb Raider: The Cradle of Life” faces off against “Spy Kids 3D” and “Seabiscuit.”
The week after that brings a showdown between two racy, R-rated features, “Gigli” and “American Wedding.” And on Aug. 8, “Freaky Friday” faces off against “S.W.A.T.” and “Matchstick Men.”
Tracking service NRG, long examined as a B.O. bellwether, once divulged privileged information only to an exclusive few. Now tracking information is widespread, putting any weakness under a microscope.
It becomes clear to the entire industry — from rival studios to anxious theater chains looking for negotiating leverage — if a movie isn’t connecting with the masses. That ubiquity of detailed information makes it harder for studios to simply sit back and gamble on opening weekends.