Commentary: Good news: Movies are recession resistant
Bad news is media giants' exposure in TVRecession resistant: With last weekend's boxoffice down about 36 percent versus last year, the prophets of doom-and-gloom have what they need to predict Hollywood's demise.
It won't be the first time that major downturns in global financial markets have prompted scare predictions about what's in store for the studios. Of course, the doom-and-gloomers have a way of ignoring anything that doesn't contribute to the case they're determined to make. So when they talk about how weak last weekend was, they aren't likely to remind us that the previous weekend was up nearly 41 percent versus the prior year.
If memory serves, the economy was in just as rotten shape the weekend of Oct. 24-26 as it was the weekend of Oct. 31-Nov. 2. The public's response at the boxoffice was driven not by financial fears but by the product that opened each weekend and the resulting comparisons to last year reflected the success of the product that was playing then. The weekend of Oct. 24-26 saw Disney launch "High School Musical 3: Senior Year" to $42 million while Lionsgate opened "Saw V" to $30.1 million. A year earlier the biggest film in the marketplace was Lionsgate's "Saw IV," which opened to $31.8 million. That weekend's number two film was the opening weekend of Disney's "Dan in Real Life" with $11.8 million.
Despite all the Wall Street turmoil moviegoers turned out last weekend in greater numbers than they did in better economic times a year earlier. Why? Because more people wanted to see "HSM3" than "Dan" and nearly as many people were eager to get a look at the new "Saw" episode.
By the same token, last weekend's results also were driven by the product in the marketplace and by the business that was done this time last year. "HSM3" held on to first place with $15 million. It was down 64 percent, some of which was inevitable given its huge opening the previous weekend and some of which was attributable to the fact that Halloween with its trick-or-treating and partying fell on last weekend's Friday night and depressed ticket sales across the board. Next year, by the way, Halloween will fall on a Saturday night, which will be even worse for movie ticket sales.
Second place at the boxoffice last weekend went to The Weinstein Company's launch of "Zack and Miri Make a Porno" with $10.1 million. Neither the first nor the second place film generated the kind of blockbuster numbers that the top two films did on the comparable weekend last year. There were two sizable openings the weekend of Nov. 2-4, 2007 -- Universal's "American Gangster" with $43.6 million and DreamWorks/Paramount's animated "Bee Movie" with $38 million. And last year Halloween fell on Wed., Oct. 31 so it didn't cut into weekend moviegoing.
You can play this game every weekend of the year with similar results. You're always going to find that it's a product driven business and that variations in the flow of films to accommodate holidays and other major openings will make a big difference. Comparisons with the prior year are always going to depend on two things -- this year's business versus what happened one year ago. When there are multi-week slumps it's typically because there's nothing opening that moviegoers think is worth spending money to see and not because they've decided they no longer like going to the movies.
Historically, Hollywood has benefited from the fact that movies are one of the country's most recession resistant industries. Going back to the Depression days of the 1930s, no matter how bad the times were people still craved an opportunity to escape by going to the movies. Hollywood was smart enough in those days to understand that this meant delivering pictures that provided the kind of escape people wanted.
Some of the most popular movies of the time were glamorous musicals revolving around wealthy and beautiful characters living in the kind of onscreen dream world that most people could only dream about. There also were gritty gangster films that provided an entirely different kind of escape, but still managed to take people's minds off their troubles for a few hours.
In today's troubled times Hollywood's likely to find that escapist fare will fare best with moviegoers. Films that focus on the rigors of war in the Middle East have consistently died at the boxoffice and are likely to continue doing so because they're delivering the depressing news that people are already getting from their cable TV news channels around the clock. Who wants to pay for more of the same bad news in the guise of entertainment?
Looking ahead, Hollywood has a number of awards season entries coming that, as usual, are definitely depressing in terms of their subjects and storylines. As always, these films will need to be driven at the boxoffice by overwhelmingly positive reviews and by a wave of critics groups wins or nominations. But some of these awards contenders will still fail to attract big audiences even if the critics rave about them because they're just not good escapist entertainment. These days that's what's going to matter most. On the other hand, it may help that some of these movies have big stars who will be able to bring them major media attention and that may help get them open.
Fortunately, Hollywood also has in its pipeline from now through year-end a long list of star driven mainstream releases that might be just what the doctor ordered for today. This weekend, for instance, DreamWorks and Paramount's animated sequel "Madagascar: Escape 2 Africa" arrives, featuring such voice talents as Ben Stiller and Chris Rock. The first "Madagascar" opened May 27, 2005 to $47.2 million and wound up grossing $193.6 million domestically.
Nov. 14 will see Sony launch "Quantum of Solace," the 22nd James Bond adventure, with Daniel Craig returning as 007. The last Bond epic, "Casino Royale," opened Nov. 17, 2006 to $40.8 million and did $167.4 million domestically.
Nov. 21 will bring Disney's animated feature "Bolt," whose voice cast is led by John Travolta. 20th Century Fox's romantic drama "Australia" opens Nov. 26, starring Nicole Kidman and Hugh Jackman. The same date also sees the arrival of Warner Bros. and New Line's romantic comedy "Four Christmases," starring Vince Vaughn and Reese Witherspoon.
Universal and Imagine Entertainment's drama "Frost/Nixon," directed by Ron Howard and starring Frank Langella and Michael Sheen, opens exclusive runs Dec. 5, expands Dec. 12 and goes wide Dec. 25. Fox's sci-fi adventure "The Day the Earth Stood Still" also arrives Dec. 12, starring Keanu Reeves and Jennifer Connelly. Overture Films' comedy drama "Nothing Like the Holidays" also opens Dec. 12 with a cast that includes Debra Messing from the TV series "The Starter Wife."
Warner Bros. and Village Roadshow's drama "Gran Torino," directed by and starring Clint Eastwood, opens in limited release Wed., Dec. 17.
Dec. 19 will bring Sony's romantic drama "Seven Pounds," starring Will Smith; Universal's animated feature "The Tale of Despereaux," with the voice talents of Dustin Hoffman and Kevin Kline; and Warner Bros. and Village Roadshow's comedy "Yes Man," starring Jim Carrey.
Christmas Day's movie presents include Disney's fantasy comedy "Bedtime Stories," starring Adam Sandler, Keri Russell and Courteney Cox Arquette; Paramount's "The Curious Case of Benjamin Button" (co-financed with Warner Bros., which is distributing it internationally), starring Brad Pitt and Cate Blanchett; The Weinstein Company's drama "Hurricane Season," starring Forest Whitaker; and Fox's comedy drama "Marley & Me," starring Owen Wilson and Jennifer Aniston.
Overture Films' romantic drama "Last Chance Harvey" opens in limited release Dec. 26, starring Dustin Hoffman and Emma Thompson. Also arriving Dec. 26 is MGM's long delayed release of its World War II drama "Valkyrie," starring Tom Cruise.
Besides these mainstream releases, there also are a number of awards contender titles that are star driven this year. In past years many such films were hampered by the fact that they starred less well known performers. Among the upcoming big star titles from specialized distributors are: Focus Features' biographical drama "Milk," starring Sean Penn, opening in limited release Nov. 26 and expanding Dec. 5 and 12; The Weinstein Company's romantic drama "The Reader," starring Kate Winslet and Ralph Fiennes, opening in limited release Dec. 10, expanding Dec. 25 and going wide Jan. 9, 2009; and IFC's biographical drama "Che," starring Benicio Del Toro and Javier Bardem, opening exclusive Oscar qualifying runs in New York and L.A. Dec. 12.
Also, Miramax's drama "Doubt," starring Meryl Streep and Philip Seymour Hoffman, opening in limited release Dec. 12 and expanding Dec. 19 and 25; Fox Searchlight Pictures' drama "The Wrestler," starring Mickey Rourke and Marisa Tomei, opening in New York and L.A. Dec. 17; DreamWorks and Paramount Vantage's drama "Revolutionary Road," starring Leonardo Di Caprio and Kate Winslet, opening in limited release Dec. 26; and Paramount Vantage's World War II drama "Defiance," starring Daniel Craig, opening an Oscar qualifying run Dec. 31.
Given all those titles that look like they have a shot at attracting moviegoers and considering the public's need to escape from its troubles via a few hours at the movies, you might conclude that Hollywood should fare pretty well despite the gloomy world economy. Indeed, that would have been the case if the industry hadn't wound up in the hands of the global mega-media giants that now own the movie business. The problem is that these companies have created for themselves corporate portfolios that include not only recession resistant movie studios, but media outlets that are highly vulnerable to bad economic times because they're dependent on advertising revenue.
In other words, companies that own TV networks as well as movie studios -- like GE with NBC and Universal or News Corp. with Fox Broadcasting and 20th Century Fox or Disney with ABC and Walt Disney Pictures or National Amusements, the corporate parent of Viacom (Paramount) and CBS (CBS-TV) -- have exposure on the broadcasting side that they don't have on the movie side. On the one hand, this is a good thing because it means their revenues from movie operations should be able to offset lower revenues from network TV operations during an economic downturn as advertisers cut back on spending.
On the other hand, it's a bad thing because if the media giants implement across the board budget cut-backs as a strategy of getting through bad times, as some have already done, they risk hurting their movie units if those cuts reduce marketing expenditures. If anything, Hollywood should spend more money on marketing and cut back on out-of-control production spending. And while it's doing that, it should stop making depressing downer dramas because when people are dealing with dwindling 401K's, frozen home equity lines, soaring credit card interest rates and talk about higher taxes, the last thing they want to do is spend money to see a movie that's not going to cheer them up. Making fewer movies but spending properly on marketing them is the way to go.
See Martin Grove's Zamm Cam movie previews on www.ZAMM.com