Originally posted by: 0roo0roo
June 21, 2005
THE SLUMP ISN'T REAL, BUT CHANGE IS...
"Ten years ago, I paid to see at least two movies in a theater every week. I've only gone to one movie in a theater this year. I was never a big VHS buyer, but my DVD collection has expanded by at least 50 titles since last December."
xxxxxx........................................xxxxxxxxxxxxxxxxxxxxxxxxxxxxx- David Poland
It's true. I don't pay for movies anymore. And I have a lot of DVDs, though I don't pay for many of them either.
After this weekend's most egregious, irresponsible box office headline yet - "Worst Box Office Slump In 20 Years" - I thought it would be a good idea to really get into the alleged DVD-driven box office slump and instead of just saying how wrong others are, look at what I think the truth to be.
The film business has had 13 straight years of improvement in the overall domestic gross for the year. The growth has ranged from the .2% registered in 2003 to the 9.8% in 2003, 9.2% in 1998 and the 9% in 2002.
Now, if you want to start down the "prices have gone up... it's not real growth" rant, that's okay with me... but you are moving the playing field. Perhaps you'll get into the "real" grosses for Gone With The Wind by adjusting for inflation... blah, diddy, blah, blah, blah. It's interesting, but it's a different discussion.
The DVD sell-through business peaked early last year. Perhaps it will reassert itself sometime, but for now, it is the motion picture DVD sell-thru business that seems to have started a slow slide. It is still massive, but last Christmas, Americans bought TV on DVD, not films.
Why isn't it reported? Because DVD numbers are not publicly reported. Why aren't they publicly reported like movie grosses? Because the industry learned its lesson well from the absurd situation with domestic box office reporting. That much information means too many opinions and too many people with details. And so, we get Top Ten charts and occasional hints about great opening week DVD numbers reported by the releasing studios and the media prints it without demanding more.
While the DVD business was hitting its current apex, Shrek 2 was becoming the second highest grossing domestic release of all time. But it was also "just" the sixth highest grossing worldwide hit in history (less than half of Titanic's number, for the record).
Eleven of the Top 20 domestic grossers of all time were released in these last five years as the DVD revolution took hold.
There have only been ten $350 million domestic grossers in history... never two in the same year... until last year... when there were three.
The stat is a little different worldwide, where DVD sell-thru is not as dominant in their culture, though piracy is more dominant. There have been seventeen $750 million worldwide grossers. There were two in 2001 (Rings 1 and Harry Potter 1) and two more in 2002 (Spider-Man, Harry Potter 2). Last year, for the first time, there were three.
So the audience disinterest in going to the movies last year was... uh... anyone... anyone?
Three of the eight highest grossing domestic releases of all time were released last year in February (Passion of the Christ), May (Shrek 2) and July (Spider-Man 2). The top two films of last year release by this date has put $740 million into the till by now. This year, the top two have been good for $530 million by this date... a different of about $210 million, which by itself makes up for all but about $90 million (or about a 2% drop from last year) of the current "slump."
It is possible that the rest of the year will not catch up with the missing muscle of last year's trip of mega-blockbusters. On the other hand...
Last Holiday season, Meet The Fockers and The Incredibles totaled $541 million... the five other Holiday films that grossed over $100 million totaled $864 million... numbers 8-14 totaled another $404 million. So that is a Top Fourteen of $1.8 billion.
The upcoming Holiday season of 2005 should be powered mostly by King Kong, Harry Potter 4, Narnia, and Fun With Dick & Jane. So looking at those four titles alone... is there anything less than $1.1 billion domestic right there? And following along are ten more titles - Chicken Little, Domino, V For Vendetta, Zathura, The Producers, Underworld: Evolution, Yours Mine & Ours, The Ringer and Spielberg's Munich movie. I'm fairly comfortable that upcoming Holiday season will make up for or even surpass the "deficit" of this last spring... where more of the "deficit" is from.
But let's say it doesn't.
The start of the shortened Home Entertainment window was really Batman in June of 1989. When the film opened with $40.5 million in one weekend, it was a record... by a significant margin. And this was followed by a late summer announcement that Batman would be available in video stores as a sell-thru (this is was still being distinguished) before Thanksgiving. The film played at over $1 million a week for 14 weeks, but there was a sense that there was more money out there if the promise of a quick video turnaround didn't exist.
Three years later, Batman Returns opened bigger ($45.7 million), setting a new record... and the film played for just seven weekend at over $1 million.
Yes, the drops were deeper and the film was not as universally embraced, but the legs had been cut in half while the total domestic box office dropped just 33%.
Batman Forever opened another $7 million bigger (not a record this time), played at over $1 million again for seven weekends. The total gross was higher than on Batman Returns. Bad lesson learned.
The fourth Bat-film opened to almost $10 million less than the third. Five weeks at $1 million-plus and out the door at $107 million.
A flop is a flop is a flop.
In the years between Batman & Robin and Batman Begins, the home entertainment market changed drastically with the rollout of DVD and the industry decision - much against the will of Blockbuster - to make the medium almost exclusively sell-thru.
In the last five years, the DVD market cannibalized video rental, but in overall dollars, added about 20% - 25% to the studio bottom line, picture to picture. After an exhibition slowdown in the early 90s, exhibitors went bankrupt, on after the other, and after being reconfigured, rebuild a large percentage of the screen counts in many markets. Bad locations were dumped... multiplexes were reconfigured for state-of-art efficiencies... ownership consolidated.
In 1993, Jurassic Park became the last big money maker in second run theatrical, generating $46 million of its $357 million domestic total after the summer (and most first run) ended twelve weeks into its run.
By the time Independence Day smashed three years later, weekend twelve was just $16 million away from the domestic total.
When The Grinch came out four years later, he was on just 303 screens in weekend twelve.
And then DVD arrived...
PART TWO: The DVD Era... Tomorrow
http://www.thehotbutton.com/today/hot.button/index.html
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