If there's one thing the brain-trust that runs Hollywood is good at, it's diplomacy.
No wait, April Fools is over, sorry about that, in fact, they are really, really lousy at diplomacy.
Recently a coven of studios announced a deal with DirecTV that creates a new premium Video On Demand window. For $30 DirecTV customers get a 48 hour viewing window to watch movies just 60 days after their initial release in theaters. Naturally the theater chains are having a royal shit fit over this deal threatening to boycott any and all films released on this plan, and former Fox honcho Bill Mechanic dropped in his 2¢ in a video interview for Bloomberg.
Mechanic thinks this deal is beyond
fixing, his main points revolve around the fact that the movies need theaters, because they are the opening salvo in what is actually a long and multi-stage campaign. The biggest single source of revenue comes from ticket sales in theaters. If the film doesn't make a profit right away in theaters, they then have such things as video on demand, DVD sales/rentals, and television replay rights to help bring in money over the long run that might lead to eventual profitability.
Whittle down the theatrical release window down to next to nothing hurts the other revenue windows, because you run the risk of losing the vital word of mouth that movies need to be considered worthy of rental, purchase, or viewing on some commercial TV outlet. Then there are the smaller films, the ones that are not mega-budget tent-pole movies who show surprising legs in theaters thanks to good, yet modest audience response. The audiences who might pay to see them in the theater, might skip that entirely and wait the 60 days for this new VOD window.
I also see something else, an expression of extreme arrogance. Theater chains AMC/Regal are opening their own distributor and Netflix is going into making their own content, because, as I've written before, the studios are not doing their job producing the quantity and especially the quality of product they used to.
This after the studios pushed theater owners to spend billions on more screens, digital projection, 3D technology, and upgraded picture/sound systems.
Then they go ahead and pull this whole premium VOD stunt, and effectively threaten to pull the last rug out from under the theater owners, without a scintilla of consultation.
The theater owners are naturally pissed, and all the studios are saying is that they have to do this because of the skyrocketing costs of making and marketing movies.
Yet, as Mechanic says in the interview, and I've said since I've started this blog, those are Hollywood's very own self-inflicted injuries. They own the major networks that carry the advertising, and charge ever increasing amounts, for ever decreasing returns. They spend too much to make too little on sub-standard stories, and remakes in the vain hope that this time it will work for some reason, and then they go ahead and enrage their only real ally in this racket, the theater owners.
Arrogance and stupidity are a bad mix, and I don't see this possibly ending well for anyone.
No wait, April Fools is over, sorry about that, in fact, they are really, really lousy at diplomacy.
Recently a coven of studios announced a deal with DirecTV that creates a new premium Video On Demand window. For $30 DirecTV customers get a 48 hour viewing window to watch movies just 60 days after their initial release in theaters. Naturally the theater chains are having a royal shit fit over this deal threatening to boycott any and all films released on this plan, and former Fox honcho Bill Mechanic dropped in his 2¢ in a video interview for Bloomberg.
Mechanic thinks this deal is beyond
fixing, his main points revolve around the fact that the movies need theaters, because they are the opening salvo in what is actually a long and multi-stage campaign. The biggest single source of revenue comes from ticket sales in theaters. If the film doesn't make a profit right away in theaters, they then have such things as video on demand, DVD sales/rentals, and television replay rights to help bring in money over the long run that might lead to eventual profitability.Whittle down the theatrical release window down to next to nothing hurts the other revenue windows, because you run the risk of losing the vital word of mouth that movies need to be considered worthy of rental, purchase, or viewing on some commercial TV outlet. Then there are the smaller films, the ones that are not mega-budget tent-pole movies who show surprising legs in theaters thanks to good, yet modest audience response. The audiences who might pay to see them in the theater, might skip that entirely and wait the 60 days for this new VOD window.
I also see something else, an expression of extreme arrogance. Theater chains AMC/Regal are opening their own distributor and Netflix is going into making their own content, because, as I've written before, the studios are not doing their job producing the quantity and especially the quality of product they used to.
This after the studios pushed theater owners to spend billions on more screens, digital projection, 3D technology, and upgraded picture/sound systems.
Then they go ahead and pull this whole premium VOD stunt, and effectively threaten to pull the last rug out from under the theater owners, without a scintilla of consultation.
The theater owners are naturally pissed, and all the studios are saying is that they have to do this because of the skyrocketing costs of making and marketing movies.
Yet, as Mechanic says in the interview, and I've said since I've started this blog, those are Hollywood's very own self-inflicted injuries. They own the major networks that carry the advertising, and charge ever increasing amounts, for ever decreasing returns. They spend too much to make too little on sub-standard stories, and remakes in the vain hope that this time it will work for some reason, and then they go ahead and enrage their only real ally in this racket, the theater owners.
Arrogance and stupidity are a bad mix, and I don't see this possibly ending well for anyone.
Remember Goldman's Law, "Nobody knows anything". Now apply that to an industry that is getting squeezed between falling ticket sales (because most of the movies are crap) and new technologies (digital filmmaking and distribution). Why would we expect them to start acting like rational beings *now*?
ReplyDeleteNope, they're going to keep flailing around. Eventually, someone's going to have a mammoth hit movie outside of the typical studio/distributor/theatre system, and that will be that. Think of something like Kevin Smith's plans for "Red State", without the jerk behavior and with an actual good movie.
Once you have a proof of concept, then the floodgates will open. And the studios will be done.
I caught "Primer" last week. A smart, fairly decent little movie made for $7,000.
ReplyDeleteSEVEN - THOUSAND - DOLLARS
It's box office:
http://www.imdb.com/title/tt0390384/business
Total gross?
$424,760
And it shows more intelligence and creativity than most blockbusters combined (exception: Inception).
I think it's the start of Blast Hardcheese's floodgate idea.
How Hollywood can't learn from something like this is just... expected. Because I read Furious D.