Scary Story: A ‘Talent’-Driven Hollywood Box Office Bust Now in Its Sixth Year

At the end of 2007, BrandWeek noted reasons for optimism in Hollywood that 2008 might be a banner year at the box office:

With special effects-driven, superhero-laden tent poles on the schedule for summer 2008, could it be the year that breaks $10 billion at the box office?

Could the mix of franchises scattered around the schedule ….. plus another Judd Apatow comedy and a potential Blair Witch from J.J. Abrams—excite the bottom line?

But after beginning the year decently, three consecutive dismal weekends have caused Tinseltown’s comparable year-to-date totals to trail 2007:

Of course, summer hits could save the day. But it seems at least as likely that 2008 will be the sixth consecutive year of disappointment in studio executive suites.

After excellent results in 2001 and 2002 (increases of 9.8% and 9.0%, respectively), each of the past five years — make that just over 5-1/4 — has been awful, especially after adjusting results for inflation and looking at how many tickets have been sold:

Most of this underperformance has taken place while the overall economy has been decent. The US economy as a whole grew 15% in real terms in the five years ending in 2007, while the movie industry’s box office contracted by over 9%:

Additionally, according to the New York Post, DVD sales declined in 2007 for the first time.

In November, Ned Randloph at VideoBusiness.com offered this grim assessment of the industry’s overall situation and its hopes that new technologies like video on demand might bail it out (bolds are mine):

“Our analysis of the business of the Hollywood studios may come as a surprise to investors and even some people within the industry. We believe there is little chance of the negative revenue trend reversing in the coming years,” Smith said. “New technology will not deliver anything like the revenue initially predicted, and as DVD sales continue to decline and the cost of making movies increases, the message is simple: the Hollywood studios must begin a serious attempt to reign (sic) in costs ….. if they are to survive.”

….. the current cost of producing, casting and advertising movies in the present environment simply exceeds the likely returns …..

Randolph didn’t even get to the potential disruption that YouTube and other instant and/or “amateur” movie alternatives could cause.

Cue the blood-curdling horror show scream.

Focusing only on box-office results, as good as a lot of Randolph says is, he did not address an important larger question, which is this: The competition from other forms of entertainment, while it has always been intense, was surely prevalent during the boffo box-office years of 2001 and 2002. So why were they so good, and why have the years since been so bad?

Consider the resources allegedly sane people have poured into the following “antiwar” films, compared with their box office takes:

• Stop-Loss (2008) — $10.7 million (still in theaters, but near end of run; $25 million production budget)
• Rendition (2007) — $9.7 million (production budget not disclosed; high-priced talent included Reese Witherspoon, Meryl Streep, and Alan Arkin).
• In the Valley of Elah (2007) — $6.8 million (production budget not disclosed; high-priced talent included Tommy Lee Jones, Susan Sarandon, and Charlize Theron).
• The Kingdom (2007) — $47.4 million ($70 million production budget; high-priced talent included Jamie Foxx and Jennifer Garner).
• Lions for Lambs (2007) — $15 million ($35 million production budget; high-priced talent included Robert Redford, Tom Cruise, and Meryl Streep).
• Redacted (2007) - $65 thousand (production budget not disclosed; high-priced director was Brian DePalma).
• Home of the Brave (2006) — $52 thousand (production budget not disclosed; high-priced talent included Samuel L. Jackson and Jessica Biel).

The duds just noted didn’t have to happen, but their failure points to a readily available solution. However, that solution is going to be very difficult for free-spirited actors, actresses, directors, and producers to understand.

Nevertheless, a point needs to be made. So listen up, guys and gals.

For whatever reason, you folks have “star power.” When you’re associated with a movie that has a reasonable chance of success, your presence can mean millions, maybe tens of millions, at the box office. Employees in the film industry’s food chain — the “little guys” you like to say you care about — all benefit.

But when you let your Bush Derangement Syndrome (BDS) divert your precious time and attention to films that, in your heart of hearts, you must know won’t succeed, you cause your industry, its employees, and its investors to lose the value of what you might have otherwise provided.

Consider the possibility — no, the likelihood — that your BDS is what is keeping your industry down. If you are as socially responsible as you claim to be, you should get over it, and help your industry get back on its feet.

At some point — perhaps soon — your own careers may depend on it.

Underlying Data Sources for Charts: Box Office Mojo (Total Box Office and Tickets Sold); US Bureau of Labor Statistics (annual average inflation); US Bureau of Economic Analysis (GDP growth); Census Bureau (annual population estimates).