2011 was not a great year for Hollywood. Film attendance dropped to its lowest rate in nearly 20 years, and while some executives are optimistic about the future, many in the industry are fearful. TheWrap consulted several industry experts on what is ailing Hollywood and what (if anything) can potentially be done to fix things. Here are some highlights from their comments.
Mike Medavoy, chairman and CEO of Phoenix Pictures
“The [declining] numbers are not that surprising. It’s been a long time coming, and the economy worldwide is certainly not helpful . . . In the past new technology like television, videotape, DVD, and cable have saved the film industry. Well, what’s next? If anything, the American movie industry is the best there is, but it too can wear out its welcome. Special effects alone won’t save it .
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. . The decision to rely on remakes and sequels at higher costs either makes people feel that they have seen a movie and can either wait and see it on the after-market or miss it all together.”
Harold Vogel, head of Vogel Capital Management and author of “Entertainment Industry Economics: A Guide for Financial Analysis”
“The business will never be the same again . . . It’s not cyclical. This is a technological shift on a generational scale, and the long-term technology is distribution on the web — and that’s not ten years, that’s forever . . . The DVD lived for about eight or ten years and was magnificent while it lasted, but it was an interim technology.
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But the longterm technology is all digital distribution on the web — streaming or downloading or whatever . . . There is no great cure for [Hollywood’s thinning margins]. There are some problems in life for which there’s no cure. The studios are going to be around, but their ability to generate high margins and sustained margins is being challenged all the time.”
Edward Jay Epstein, author of “The Hollywood Economist”
“There are two things the industry can do. It can make the technology of theaters more appealing and studios can change the mix of the pictures that are in theaters. They know how to do that and it’s been going on since “Jaws.” But making a movie like “Avatar” or “Titanic,” which becomes an event, is much harder to do.”
Some good points, definitely, and some bitter pills for the studios to swallow. As a movie lover, it pains me to see people losing interest in movies, but a lot of the blame seems like it must be pointed at the moviemakers themselves, who keep putting out mindless, creatively bankrupt films and advocating consumer-unfriendly practices such as delayed release windows, overpriced and poorly done 3D, etc.
What do you think, Insiders? Can Hollywood recover from a rough 2011 and adapt to the new marketplace and consumer expectations? Or will the titans of Tinseltown keep digging the grave they’ve begun for themselves?
(via The Wrap)
The majority of the problem is Hollywood’s disinterest in making films FOR audiences…instead they have directors/producers/screenwriters who simply want to shock or aren’t capable of creating something other than that; they want to make a movie for their own artistic experience. The trash and drivel they’re producing now makes me sick. Hollywood seems to feel they have to detract from actual conversations onscreen with vulgar language every second word; they must include the requisite scene in the bathroom (people actually laugh about this at movie screenings…”here it comes–the bathroom scene”); they must include overt sexuality even in characters who are children. The wonderful stories of early years are no more and sure are missed.
As long as the studios want to turn out unwatchable crap like “Sucker Punch”, along with pointless, inept remakes (“Straw Dogs”, anyone??), they will see the decline continue. And the 3-D trend? Not until people can bring home their favorite theatrical 3-D releases to watch on a TV without the annoying glasses, will that technology enjoy a real increase.
Absolutely agree with GearMaven. What would have been rated X probably only a year ago now receives an “R” rating. I’ve left movies several times and gotten a refund. I’m tired of seeing the explicit nudity and hearing the foul language.
Anyone else think the rating system seems to have drastically changed in 2011? I have not been to an R rated movie in 6 months and have no plans to return. If hollywood/MPAA continue this decline, PG-13 will be out before long.
This not only hurts the local theater (which I love going to), it hurts the DVD aftermarket. I’m sure some people don’t care what they see or hear on the screen, but I’m sure there are many that do. Thing is, they’re not losing customers because their NOT putting the nudity in the films, they’re losing customers because they ARE.
WTF?? R rated movies have had gratuitous nudity and swearing for over 30 years. The X rating hasn’t been used in almost 15 – all the porn has moved to the home market.
It’s so funny how you people constantly complain about the state of movies but yet you continue to watch them. Why don’t you stop watching movies all together and find something else to do with your time. Problem solved. Then you won’t have to hear such foul language or oh my gosh see naked people.
I think the point is that we AREN’T still watching movies, which is why film attendance is at a 20-year low. Maybe you’re trying to make the point that we should also not see the few movies we like and support as some illogical “we’ll teach them” protest?
1. The quality of movies is down from where it was 5-10 years ago.
2. Hollywood makes way too many movies, we need quality not quantity.
3. Movie theater costs are ridiculous and I’m talking more on the concession side then the actual cost of the ticket for the movie. The prices they charge for a soda etc are just obscene. The movie studios really need to get on the major cinema chains about their business model.
4. At home you can stop and start the movie as you please, don’t have to worry about some idiot that didn’t turn their cell phone off, someone that wants to talk through the movie or the family with the crying child that doesn’t get the hint and walk out.
I’m amazed no one pointed to the theatres biggest failing, ticket prices. There’s a budget theatre near me that is doing so well they’ve reversed a decades old standard and have added day shows. there’s another theatre that threw off it’s big name to become an independent with lower prices. It’s sort of middle prices (4-7 dollars more with 3d) and it’s improved drastically as well. It still struggles through the week but fills up on weekends.
People demand more for their money and it’s a cumulative effect. they don’t see 50 dollars as a good deal because it’s a large family. Instead they see it as money that could have gone much further for the family.
lower ticket prices will directly lead to better revenue.
Jamie, concession prices are because of the studio system and not in spite of it. The distributor takes 90 percent of the ticket price the first week and it drops after that down to 20 if they wait a month. Since movies are like milk (go out of style quickly) that means the theatres are starving on box revenue so they charge a fortune for concessions. However I agree that they shouldn’t. If they charged less they’d sell more and make it.
Actually the real culprit concession price-wise is the average consumer. As long as they are willing to pay that much why should the theatre charge less? when people openly tell theatre management (and I mean do it, not just say you did to friends) that the concessions cost too much so the theatre has lost it’s customer, then they may do something about it. Americans are smart individuals but for some reason a group of consumers we are really ignorant.
My wife just stuffs items in her purse when we go. I refuse to pay their draconian prices.
The two things that stop me from seeing movies, High Ticket Prices and no movies worth watching. Several years ago I lived in a town where we had two $1 movie theaters nearby, and our family had no problem seeing 2-3 movies a month. Now in a new town it’s more like a movie every two or three months, and that is only if a movie that we have been waiting to see.
Hollywood’s #1 problem is they focus far far far too much attention on the 18-34 demographic. Typically this was the least price-conscious demographic which allowed the industry to ignore quality. Now that demographic is racked with unemployment and can’t afford NOT to be price and quality conscious. And by ignoring the older demographic for so long they can’t even rely on the post-theatrical market anymore because they aren’t even bothering to attract that demographic with anything beyond HBO-type television shows.
Hollywood is in debt up to its eyeballs and is convinced the same-old same-old is the only risk-free approach to cover that debt. And it isn’t working. Distribution is much easier for independent film makers these days and they don’t need to take lopsided deals with the old-line studios to get their product distributed, not do they need Hollywood financing for anything other than expensive effects-laden productions. Hollywood doesn’t even seem capable of making deals for good festival films (read: Sundance et al) anymore. While those are rarely breakout smash hits, they are always good cash-flow films but Hollywood’s business practices have soured independent producers from doing business with them.
Basically, Hollywood is reaping what is has sown.
Stop the 3-D crap, lower prices and make something I want to see. Sequels, prequels and remakes bore me.
Agree with that! And the industry thinks 3D TV will be a success is mistaken as well. No one wants to wear 3D glasses. It’s just the latest release for the 3D fad that comes-and-goes every now & then.
High ticket prices, especially for 3D movies, are what keeps my family away. We’ll rent, stream or go to a discount movie theater to watch movies. We don’t have to see them when they first come out. Also, the constant use of the f… word in many movies is a turnoff to my wife and me. One movie, which we quit watching on dvd, must have had it spoken every other word. Really! Is that the best writing that can be done? By being spoken so consistently, it loses any effectiveness that it’s supposed to have.
Hollywood can solve it’s problems by:
1) Reduce ticket prices, even if it involves *gasp* paying actors much less to reduce movie costs.
2) Keeping their divisive political opinions out of movies and out of the press.
3) Creating good, fun, family-friendly movies that people want to watch instead of “art”.
I agree with Big Orange. Our family has a finite pot of dollars so our entertainment budget is a small percentage of that. This includes movies, music, cable TV, sports events, eating out,etc. The reason we see celebrities traveling the world, partying, owning multiple homes in multiple countries is because we keep sending our hard earned dollars to them. Do we have to be entertained by others so much at so many levels?
I would think this one is a no-brainer. I’m an avid moviegoer and an Economist as well so it didn’t take me forever to figure out the problems:
-Unemployment rate is still close to the post-depression all-time high and at about 9%; forget escapism, as at the end of the day, movies at the theater are still a luxury
-Movie Theater Prices (3D and XD and concession items) have not changed to adjust for inflation and general economic difficulty; instead the prices keep going up on average, and basic econ. 101, prices go up, demand reduces
-Movie quality: U.S. is very prolific with movies, but in 2011 we had a good number of high-budget flicks (Transformer 3 and HP7) and an even bigger number of low-budget, low-grossing, highly-acclaimed flicks that are not for children (Shame, A Dangerous Method, Girl with the Dragon Tattoo, The Descendants, etc) that everyone can’t go see, and this messes with attendance because they’re all too niche.
Solution (an Economist is useless without solutions!):
-Make and release more movies like the Help and Mission Impossible 4 that get the critical mass needed to reverse the trend
-Do something about ticket (or concession) price already!!!!
-Think seriously hard about whether it’s worth it before shooting a movie in 3-D (or worse yet, retrofitting it)