Sleepless in Hollywood: Tales From the New Abnormal in the Movie Business (32 page)

RICK:
Don’t. The top-rated network—CBS—is taking in a lot of money in advertising now. The advertising market is healthier now than it was after the financial collapse of 2008. And what I find interesting is that despite the proliferation of all the new platforms, from Netflix to YouTube to whatever new digital platforms, traditional television is still a very healthy business.

LYNDA:
That’s a relief. So I won’t throw them a benefit or anything.

1.
Which also broke Ashton Kutcher and ran for eight years, from 1998 to 2006.

2.
Redford has not done television, though I tried to get him.

3.
The agency he and his WME partners first founded via ICM.

4.
The studios pitch their shows to the networks. The studios also finance the shows for the networks, and therefore reap the profits from syndication. The broadcast networks—CBS, ABC, NBC, Fox, and the CW—only receive advertising revenues.

5.
Showtime is part of the CBS empire, and with the current phenomenal success of
Homeland
and the cable financial model, he is said to be much more interested in it now.

6.
These relationships are forged by ownership. Conglomerates own the networks and the studios—i.e., Universal Media Studios (NBC) is owned by General Electric, ABC Studios (ABC) by the Walt Disney Company, 20th Century Fox Television (Fox) by News Corp., CBS Television Studios (CBS/CW/Showtime) by Viacom, Sony Pictures Television (unaffiliated with a network) by Sony Corp. and Warner Bros. Television (unaffiliated with a network) by Time Warner.

7.
This is why it is so crucial for advertisers to update how they use the Nielsen rating system, which measures how many households are watching a given show at a given time. Measurements are presented either in relation to total televisions in actual use—the share—or how many households are watching the given program—the rating. The problem is that fewer and fewer people are actually watching their favorite TV shows when the shows are actually programmed on the networks’ nightly schedules. Since the advent of TiVo and other digital recording devices, people “binge watch,” or just record their favorite shows and watch them when they damn well please. And although Nielsen has developed a measurement for digital video recording—which promises to have a huge impact on television ratings—advertisers have resisted using it as a component in their ad pricing. This has made hot new shows that are widely recorded less valuable than they should be to the networks. This is archaic, unfair and costing the networks tons of cash.

At the height of the Old Abnormal, when the pace was frantic and the toll in the trenches was punishing (but often fun), I wrote about the Hollywood grind in my book
Hello, He Lied
.

A wild free-for-all has gripped the business like a gang war. The agents who try to impress and sign the stars that open the movies, the studios that need to open their movies, and we producers who need them to make the movies, are all climbing over one another for a start date . . . We are all competing in a frantic frenzy of bidding worse than the hottest auction because a bloated and expensive movie is better than no movie at all. So we fight over the stars and they win until the movie is a disaster and brings down the studio . . . The cycle is swelling to a crescendo no one fully understands. We simply know that the race is on and that we’re panting for a pause that will never come . . .

Ten years later, the pause came. It arrived in the form of a brutal recession and market crash colliding with a horribly timed writers’ strike. This was the very moment the DVD revenues that allowed this escalating industry-wide fever to peak disappeared.

We knew it was insane, but since we were all abnormal in the first place, caught up in a struggle to succeed in a town built on overnight success and daily doom, we didn’t realize we were
essentially living in Miami in the middle of the housing boom, buying strips of beachfront property adjacent to unfinished condos sight unseen. We were all in this disaster together, and when the bell rang, there was, unbelievably, no more credit available to our formerly sacrosanct studios for about two years. It was much, much worse than changing into Blue and Red and Yellow teams. It was worse than anything we could have dreamed up in our horror-filled imaginations. It was, in a way, a total realignment of all teams. And everyone was now forced to take the studios’ side. Big agents who had been setting $20 million–plus fees for actors saw those actors replaced by less expensive unknowns. The studios set the fees, the mandates and the pace.

Could we have dreamed that the music would stop? That spec sales would disappear for years? That pitches would virtually die out for just as long? That big stars would lose so much cachet? That the way we put pictures together would change from an age-old “outside-in” model (from the talent to the agents to the studios) to an “inside-out” model (from the studios to the agents to the talent)?

When the music stopped, there were new classes of haves and have-nots, just like in the rest of America after the crash, membership of which depended on your immediate situation. Did you have a reliable, ongoing franchise like
Spider-Man
? Were you at a stable studio like Warner Bros., where they were not suspending deals? Was your BFF the head of the studio, like mine was for a time? Did you have a partner who was a movie star who could open movies or an A-list or at least bankable director? Did you have a personal bank account or a hedge fund or a rich and Romney-like Sugar Daddy who could sustain you through the freeze? Or were you a one-off, having to make it on wits alone? If so, you were likely to be standing, not sitting, when the music stopped.

Wherever you were standing or sitting, it was still harder to make pictures because there was less money in the system. I was standing, but my legs were wobbly and in order to survive, I would
have to get even stronger than I had believed possible in the old days, when all that was required was to push an increasingly unwieldy boulder up Mt. Studio.

•  •  •

The box office itself, despite the heavy breathing every weekend, has stayed remarkably stable over time. Despite some hugely expensive flops, the 2012 summer box office was up 14 percent at the season’s midpoint over 2011, partially due to the phenomenal success of
The Avengers
and
Ted.
But the numbers fell in late summer in the wake of the Aurora, Colorado, shooting in a theater showing
The Dark Knight Rises.
Not only were
TDKR
’s numbers depressed over the course of a few weeks, but analysts saw the numbers go down in general for evening attendance at theaters all over the country.
¹
By the end of the summer of 2012, the box office tally was $4.2 billion, down 2.7 percent from the previous summer, very likely because of the anomalous underperformance of
The Dark Knight Rises
and other evening showings of all movies after the tragedy in Colorado.

However, the industry had a very strong January-to-April period in 2012, so that on aggregate, 2012 surpassed the previous year.
The Hunger Games
is largely responsible for the surge. In general, the year made some studios look very good because of their fresh choices: a new female-based franchise in
The Hunger Games
from Lionsgate and a raunchy original comedy,
Ted,
created by Seth MacFarlane—who is becoming a franchise himself—from Universal.

But what you see over time is that despite some ups and downs, the aggregate summer domestic box office number has risen slowly but steadily over the last ten years. Some years it is down a hundred million, and other years it is up a hundred
million, which means the domestic audience is not abandoning the malls, at least not over the summer.

So why the moaning, agonizing dread every weekend? There are a number of things to be unpacked from these positive trends. The domestic audience is volatile and unpredictable; they seek fresh ideas while the international market seeks familiar. Besides costs due to inflation, the production costs of movies have swelled as they seek to please an international audience that sees bigger as better—and bigger is now $150 to $200 million. Where do the studios go from there? Perhaps more worrisome, the cost of marketing these movies has increased to the point that it keeps the heads of studios up at night; the old formula—half of production costs—is still touted, though it is not thought to be credible. Those numbers are likely to be much higher now, but we don’t know for sure because they are never released by the studios. While the business has survived its DVD crisis by opening all these new markets abroad, the cost of doing so is astronomical and rising. Even many successful movies that rack up big numbers will basically only break even, given their production and marketing costs. The question is, can the business survive and sustain itself with its level of
profitability,
as opposed to box office gross?

We have been through an ice age in the entertainment business, and while television has been the beneficiary of the movies’ distress, there are recent box office signs that the ice may be receding, leaving the ground rugged and, one hopes, fertile. A remarkable cockroach-like ability to survive has shown itself over the course of the disaster. Will we have gotten smarter? Will we find new ways to get original movies out there without spending hundreds of millions of dollars? Will Hollywood remain a land of massive tentpoles that leave tadpoles gasping for breath and struggling for room to play each week? What will be next?

There are clues that some filmmakers, producers and studios are starting to sort out. Audiences are telling them loudly and
clearly what they like and what they don’t. Some big IPs are working:
Hunger Games
fever swept the nation for a month in 2012, delivering its young adult audience exactly what it wanted.
The Avengers
(featuring six iconic Marvel superheroes) was an international phenomenon, now the third-biggest movie of all time, after
Titanic
and
Avatar
.

But some big tentpoles crashed to the ground with a loud thud, even some based on big titles with preawareness:
Green Lantern, Cowboys and Aliens, John Carter
²
and
Battleship
(based loosely on the Hasbro game) all basically bombed during the writing of this book. It became clear that not all comic-book heroes will do. A certain exhaustion is setting in. The cost of each tentpole picture, even the moderately successful ones, is being minutely analyzed online and in the boardrooms. Perhaps as a result, the 2013 releases had among them the most varied set of films Hollywood had made for years. It was an unusually exciting year, a rebound perhaps—a tentative reaction to the drought of original offerings even the studios had been suffering through.

THE DEMISE OF THE CHICK IN HOLLYWOOD HAS BEEN FOILED AGAIN

Fascinating things have occurred, however, almost by mistake. When 2012 began, it was the worst time for female-oriented projects in the business, perhaps in history. The industry’s focus on franchises had driven female-starring projects into virtual dormancy. But with the phenomenal success of two franchises written by female authors and featuring female central characters, embraced by both the books’ female fan base and two other quadrants, lower male and upper female, both
Twilight
and
The Hunger
Games
made international stars out of their leads, Kristen Stewart
³
and Jennifer Lawrence, respectively.

Moreover, that success made the idea of a female-based franchise a reality: “We believe there is enormous opportunity for female leads,” Lionsgate vice chairman Michael Burns said at a producers’ conference in June 2012. His studio had released both films and had recently announced itself to be in “the Jennifer Lawrence business.” At the same conference,
Hunger Games
producer and former Disney president Nina Jacobson argued, “The future of Hollywood franchises is female; I think Hollywood was just too stupid to figure that out for a while.”

There was disagreement on this from some of the fanboy producers, but that there was a conversation on the subject at all was stunning in and of itself. Jacobson further pointed out that women had become the breadwinners in the family. It was like a political debate.
Go, Nina!
I thought as I read this. A year ago, if anyone had said that the future of Hollywood franchises is female, they might have been sent to the funny farm. It’s all a big, open conversation, but at least girls are in it now when they weren’t a year ago. That’s a sea change, accomplished within a year.

THE STATE OF SEQUELITIS

There are interesting and optimistic clues to be found even in sequelitis: In the near and immediate future, our highly paid studio assembly-line sequel creators can anticipate ferocious creative competition. Now that franchises are built more and more on adaptations of big books that have already been serialized far into the future by talented novelists (as the
Harry Potter
series was in
the past), the studio factory will be challenged. These sagas, with characters the audience already knows and with complicated story lines, are building audiences’ hunger for serialized drama. The more these movies and our excellent television serializations are syndicated around the world, the higher the bar will be raised internationally—as it has been here—for the story quality of our sequels. Special effects and 3D will not dazzle on their own merits forever; novelty wears out in the face of exposure to excellence. Sequels will just have to get better and cost less if they are to survive far into the future.

I got some excellent perspective from Keith Simanton of the terrific Web search engine
BoxOfficeMojo.com
, who pointed out to me that in the sometimes idealized days of the studio system—1947, for example—the classic
It’s a Wonderful Life
was only the seventeenth most successful movie. What was the most successful?
Al Jolson Sings Again,
the sequel to
Al Jolson Sings
. We have always made sequels. If America or the world loves something, we give them more; that has always been the rule. (And it has given us brilliant sequels like
The Godfather II.
) The issue is how many, for how much, and what else?