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Usually, my email is over-flowing with news of box office records no matter how obscure. But the compliant Hollywood news outlets are hardly publicizing the latest big bold movie precedent set this month. MediaByNumbers.com was first to spread the news Sunday: from January 1, 209 to February 1st, 2009, year-to-date North American grosses were $1.028 billion, compared to 2008's January take of $867.2 million. And let's not forget that every week this January the studios boasted to me how cheaply they made and marketed all these films that did so well. So revenue was up 18.57%. Attendance was up 16.78%. (Of course, none of these stats mean much because they're not adjusted for inflation or higher ticket prices. But that never stops anyone from celebrating these kinds of announcements. And they're a reason why Disney's Bob Iger and News Corp's Peter Chernin get paid annually in the $30M range.) Yet there's no lead story about this $1B gross benchmark in either Variety or The Hollywood Reporter. At the same time, NBC set a record and sold out its Super Bowl ads for $201 million. But that isn't prominent in the trades either. Here's what I think: the studios and networks want this good news played on the downlow in Hollywood (as opposed to the layoffs bulletins) when the AMPTP is restarting contract talks with SAG's "task force" -- aka the newly configured negotiating committee -- on Tuesday. Because isn't it amazing how Big Media can keep making so much money but never filter it down to either their staff or the showbiz guilds?
Record $1 Billion January Box Office -- But Don't Tell SAG!
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If Kingdom Hollywood earned $1 billion why does it need a federal bailout?
Terrible headline, NF. Who cares about SAG? It’s tough to argue that even SAG cares about SAG, given the melee that we’ve seen in the past twelve months.
Instead, what about the massive layoffs from the studios? Call me a cynic, but I find it tough to believe that this system, with it’s bottomless love of creative accounting, will ever open the coffers to the talent unless they lose all deniability of floundering. Throwing any of this money at SAG would be the equivalent of the Wall Street bailout. Instead of trying to rethink the wheel, we should hope that the money goes to drive the system we all historically rely on to make ends meet.
That said, eager to see any any any progress in the coming SAG-AMPTP talks. And maybe, we’ll be able to reinvigorate California production and maybe chip away at the state’s massive debt through merely doing our jobs. Sustained profitability? Keeping jobs in CA? The pride of a job well done? Jesus, I sound like an idealist.
DUH.
“Let’s just keep saying the economy is in the toilet and the actors are being greedy and unreasonable. It’s working. They’re cowed.” said Iger.
“Good idea” said Rothman “Let’s point out how everyone else will suffer from their narcissitic selfishness. Let’s get a spokesman. Someone other than Hanks or Clooney.”
“How’ bout Damon?” chorteled Moonvess. he’s got that abused-boy-impoverished- genuis thing about him. Anyway, I hear Baldwin’s already shilling for Hulu… Do I smell moolah ????”
Business doesn’t work like that and never will. You can’t focus on gross revenue and completely disregard their expenses. They pretty much never tell anyone but a lot of the studios operate dangerously close to the red.
It’s part of a deliberate effort within the media to make the economic slump look much more dire than it is in order to make Obama and the Dems seem like our saviours when the economy turns around. And if the recovery takes a longer than typical period Obama gets to keep saying we had unrealistic expectations. Either way, the liberal press makes their support of Obama seem justified. Pathetic.
… not just that but they have to justify the layoffs! We were recently on location in the South West (husband and I) and the theatres were full — jammed — every weekend night. Yeah, really hurting guys! And you can see a movie for $10 in beautiful screens.
People are seeing movies. People are watching television. The content is good, therefore, people are watching. I know this. The studios knows this. The times are bad and it’s true — people want to see stories and get out of themselves! Plus, I had to wait a half hour for a chain restaurant last night in Agoura — um, people are still eating out on a Saturday night and spending $$$.
Nearly a 1000 employees axed at the Studios — But don’t tell SAG!!
May be confusing for you, but theatrical is a big LOSS LEADER. Which means that the other revenue streams need to make up the loss (which, by the way, is bigger now since budgets and marketing costs are way up).
The problem is that DVD is off 1/3, Pay TV (if you have a deal) is off a third and free tv is down too.
Add that all up, and more than 7 out of 10 films – including $125M grosser Ben Button – lose money!
Yes, the upper management of these companies make too much money.
That being said, the stocks didn’t move an inch as a result of this windfall revenue. A good month is does not make a good business in the long term.
There is no reason for the studios to make a bad deal with SAG.
WORKING actors don’t want it. WGA, DGA everyone has already made a deal. If there really is a business in internet productions and distribution (there’s nothing, NOTHING there now) just revisit the issue in a few years.
SAG, just blame your inability to get it done on Doug while that excuse still makes sense. Make a deal and let’s get on with it already.
Ok, that was the gross, what is the net? I know that movies aren’t made for free so yes the box office might of done $1 billion but how many millions or billions did these movies take in order to make? I know ccbb was $200 mill, so you add in 4 more of those budgets and there is your $1 billion which takes away from the “profit”. Plus if an investor puts up say $200 million to get a movie made and all the ATL has already got paid millions prior to release date, shouldn’t the investor make their money back off the boxoffice before anyone else gets a penny? Or should the investor just lose their investment while all the ATL keeps reeping in the money for their shitty performances?
This is a very misleading article, very surprising for Nikki.
The price of apples soars — but don’t tell the oranges!
DVD are NOT down 1/3! That is propaganda. When you add Blu-Ray DVDs to the mix, DVDs are hardly down at all for 2008 worldwide. The actual figure for 2008 worldwide DVD sales, including Blu-Ray disks is around -5%. In the worst economic downturn since the great depression.
Most of the downturn can be atributed to customer confusion over the changing format, they can’t decide whether to by a regular DVD or wait until they purchase a Blu-Ray player and buy the superior Blu-Ray disk.
Syn. Hollywood hasn’t asked for a bailout.
What are you talking about?
Rabble Rabble, you are WRONG. This was the most awesome DHD title ever. GOD BLESS NIKKI for stepping up and saying what the trades won’t.
Joe Brown, you have to look at what the 4th quarter DVD drop was. The recession did not really hit until then and the 4th quarter is the DVD environment that the studio are now living with. First of all the full year revenue was off 6% and the 4th quarter was off 12%. Oh and that is revenue, not profit; with lower prices, come lower profit.
BTW Blue Ray represented less than 3% of the overall revenue so it did not impact anything.
get your fact straights.
These studios need to be hauled before a congressional committee for their shady dealings. Record profits, cheap marketing. As if! All the while layoffs continue? Hollywood is self- cannibalizing. They are just as shady as the banks. There needs to be a cap on executive pay! They are indirectly affected by the bailout. Media giants are asking for money for their slumping newspapers, trust me, Hollywood ain’t far behind.
Who are you folks with your “well $1 billion isn’t all profit, there are expenses…”
What’s next: Sure I made $30,000 last year, but I don’t get to keep all that. There are taxes and expenses….
Really?
Thanks for the income 101 lesson.
The $1 BILLION figure for the month of January still stands against the studio claims that no one is going to the theaters.
And then
“Add that all up, and more than 7 out of 10 films – including $125M grosser Ben Button – lose money!”
Nice use of the exclamation point.
Ppppppppppplease.
@ Rabble:
Who cares about SAG? Well, for starters, anyone who believes in a fair deal for SAG.
I also look forward to tomorrow, and hope the AMPTP will give SAG what they’ve rightfully earned. But if the deal offered kills residuals, I’d settle in for a long wait. I just don’t see actors killing their livelihood at the behest of others not in their guild.
@ RandyG:
Educate yourself on who ACTUALLY OWNS the media, and you’ll see just how laughable the myth of the “liberal media” is — and how foolish it makes anyone look to repeat said myth.
here’s something else they might not want SAG to know, is happening so soon in this confusing dawn of new media.. ads are simply migrating to online programming (where there’s no pesky residuals!) until someone invents tivo for that…
http://adage.com/digital/article?article_id=134209
This was $1 billion gross in January alone. Don’t get me started on the studios’ net profit shenanigans. 7 out of 10 movies do not lose money; almost all are eventually profitable.
Yes, Iger and the rest make too much. How on earth do they justify their salaries when their primary responsibility is to increase shareholder wealth? (shame on the boards of directors-there’s the REAL problem in america irresponsible boards of directors–a whole other topic. . .)
Anyway, Nikki, as it has been pointed out, your incredibly simplistic view of grosses=profits is not accurate.
And those of you tossing around concepts and “facts” like dvds down 30 percent, blue ray makes up the difference etc. Really, these wildly inaccurate estimates are not helpful to the conversation.
Here are the facts. Ten years ago it was common for studios to sell 20 plus million copies of a dvd. These wildly profitable titles helped make sense of the whole slate.
THAT DOES NOT HAPPEN TODAY. It NEVER happens.
Studios are seeing less profit per title. And this is the trend that is causing the share prices to stagnate.
Folks, studios are publicly traded companies. LOOK AT THEIR PROFIT MARGINS! LOOK AT THEIR STOCK PRICES!
If the studios were really raking in the dough and have plenty to share, believe me, their stock prices would be going thru the roof, because in this economy everyone is looking for someone, anyone to make a profit.
Studios are such large companies now, no union can hold them hostage. They will simply cut the division that is not profitable. Look at the trend of the last few years. Fewer shows. More reality on tv. Fewer studio movies. Layoffs. This is impacting all of the average joes who will never get benefits like sag members. While Larry the Actor gets a little check every time his two-line role on Welcome Back Kotter airs in reruns or sells a dvd, the accountant who worked at Warner Bros. gets nothing for his ten years of around the clock service.
So while it is irritating to see senior execs make so much, it is beyond irritating to see these unions demand so much for so little work as well.
It is also irresponsible for the media to simplify things with an editorial slant and report it as news, nikki.
Hopefully people will be intelligent enough to think for themselves.
Hollywood is in the grips of what I call a self-fulfilling idiocy. It goes something like this…
1. Studios decide they’re going to make more money for themselves, by fiddling with the books to make it look like they’re losing money to keep from paying people their cut.
2. The people who were expecting their cut, get screwed, so they start demanding more money up front.
3. Costs of production skyrocket.
4. Profit margins shrink, investors start leaving, the top executives start clawing back more and more for themselves.
5. Profits completely disappear, and the companies start losing money.
The studios better hope that the actors, unions, and investors don’t start pestering Henry Waxman to investigate them when the commerce committee sits, that could unleash a whole world of hurt.
Wow, if the studios aren’t making any money then why are they in this business? GE should just go ahead and fold Universal.
damoneycompadre,
You are the one that had their facts wrong. You said “The problem is that DVD is off 1/3″. You did not qualify that statement.
You now says:
“First of all the full year revenue was off 6%”
That is a big difference from your first statement. Your current correct statement comports with what I said; “The actual figure for 2008 worldwide DVD sales, including Blu-Ray disks is [down] around -5%.”
You were caught spewing misinformation.
Luzid,
Indeed, my wording was harsh. As I pull out my acoustic guitar and we gather around the camp fire, let me be clear that I don’t believe that SAG should get the short end of any stick. And to say ‘Who cares?’ does come off as harsh, but those harsh words poorly reflect my sentiment.
The comment that 1000 studio jobs lost was spot on, but incomplete insofar as those positions need adding to jobs still unrecovered from the WGA strike and SAG lockout defacto whathaveyou, multiplied by the dismal California economy, divided by the growing tide of runaway productions…
To draw a simple line between gross revenue and perhaps… yellow journalism? That was my point. But I do apologize for seeming flippant.
“While Larry the Actor gets a little check every time his two-line role on Welcome Back Kotter airs in reruns or sells a dvd, the accountant who worked at Warner Bros. gets nothing for his ten years of around the clock service.”
DMS, you seem to miss the point of residuals. Unlike the accountant who no longer works at WB, the WBK actor’s work *still generates profit*.
When an actor/writer/director’s work makes future profits, they should be compensated via residuals, because not only did they have a hand in it, but without them there’s be no profitable creation to continue selling.
(For the record, I would be happy to see residuals extend to everyone who works on a production — even if it’s just a tiny percentage, they assisted the creators in making it a profitable success. But if you think the AMPTP are hard-nosed about creatives’ residuals, wait until BTLers start ask for them!)
Joe Brown,
2 different names mean 2 different people. I am not “damoney” but I am a compadre because I sense that some of the information he has come from good sources.
Good try though!!
Nikki’s made a valid observation.
Kevin James’ new comedy, for example, was made for cheap (one number I read was $26m – within $15m one way or the other and that’s still less than the average studio flick), and at over $100m domestic, it should pretty much be in the black already.
The moguls speak with a forked tongue, as Nikki and others have pointed out. When they speak to Wall Street, New Media is a coming cash cow. When they speak to unions, they shuffle their feet and tell us it’s experimental and they don’t have a way to profit from it and illegal downloading is killing them and yadda yadda yadda. They’re shuffling their feet to keep their own BS from sticking.
The moguls have not slowed down their transition to New Media one iota. In fact, January’s box office numbers may give them some comfort in their decision to pursue digital (Internet or satellite) delivery of theatrical content.
New Media is still THE issue in SAG’s contract negotiations. If the new team doesn’t stick to U4S’s promises on jurisdiction and residuals the contract is going to be a very tough sell to the membership.
@ Rabble,
Hey, we all get heated about this topic. No harm, no foul.
Wow! Now that the Obamassiah is in the White House, suddenly the lefties can see how great the economy is. Oh wait, it’s not, we need more bailouts, no wait, it’s horrible we can’t have bonuses, no no wait, it’s evil corporations, we need more wasting of tax money by tax dodgers and cheats to build more entitlement programs and start blood sucking orgs run by Unions, no wait wait …
The lefty media — that includes Hollywood — has for the last 8 years driven the headline “economy in the tank,” and now they are paying the price. Boo-hoo.
Hey “Talent” until you are willing to put your ENTIRE paycheck into a movie and only get paid when it makes money; you don’t deserve a “piece of the pay” err pie.
If you want security — that’s a paycheck now — then you don’t get rewards — that’s called profits later — ; pathetic. You have no right, no privilege, no claim what-so-ever on the profits of a company. Stop listening to the Unions, they think the USSR is the model to follow. Think about that.
Spare me the “creative” accounting would make sure there was no pay. That is beyond naive, it’s stupid.
In other words: Put up or shut up.
Have any of you folks ever LOOKED at a corporate balance sheet?
You think the studios are sweeping cash into secret vaults?
If only that were the case.
It is this simple.
Making movies and tv shows is expensive and very high risk.
Costs to distribute content is huge.
There is no secret stash.
Studios are not awash in cash.
Studios fold and get sold all the time for these very reasons.
God help the creative community if Jay is successful at 10pm.
DMS Wrote: Have any of you folks ever LOOKED at a corporate balance sheet?
You think the studios are sweeping cash into secret vaults?If only that were the case. It is this simple. Making movies and tv shows is expensive and very high risk. Costs to distribute content is huge.There is no secret stash.Studios are not awash in cash. Studios fold and get sold all the time for these very reasons.
God help the creative community if Jay is successful at 10pm.”
Gee I know. Paramount and Disney and Warner brothers are in real serious trouble.
I know where the money goes..
Let’s see. The TV show Alias starring Jennifer Garner.
I have the balance sheet right in front of me…
Let’s count how many producer credits we have.
1, 2,3,4….10,11, 12, 13.
YIKES! I count 13 Producers Credits? Wait that can’t be right. Oh wait, this must be a typo.
Maybe they added a 1 in front of the 3. That must be it…nope that’s not it.. their are 13 names here for producer credit and it’s for ONE episode. I’ll be darn!
Do the math folks. 13 PRODUCERS for 1 Episode on 1 show.
(I actually lied about having the balance sheet in front of me but my wife and I recorded ALIAS when it was on tv back then.. you remember that show? It was more of a commerical for FORD than anything else toward the end. “Quick! the F150!” Camera booms down to reveal F150 symbol on truck.. my favorite. Anyway..
My wife and I at the time laughed at that and at how many producer credits were listed at the front of this show. We laughed so hard we had to rewind the DVR and count to make sure we hadn’t imagined it. We rewound it again just for more laughs. It was THAT ridiculous. I swear we counted 13 producers!
Why in the world would 1 show need 13 producers for 1 episode?
WHYYYYYYYYYYYYYYYY?
Now multiply 13 producer salaries what do you get?
I have no idea but I KNOW it’s 12 x more than what that show SHOULD be spending on producers!!!
I won’t even start with the high pay that some of the Higher paid actors make. (I’m not criticizing the mid range or entry level actors you guys/gals are ok in my book!)
Who are you trying to kid? Honestly.
Movies lose money for their movie companies ALL THE TIME…At least at theaters.
Everyone realizes that the theater chains get some of the money made at the movie theaters, right? I mean, most of the time they get about 50% of movie grosses, depending on what kind of deal is struck with the movie company. If it is a guaranteed blockbuster, the movie company can ask for a bigger percentage because the theater chains still want the movies because it will bring in more customers.
Let’s look at “The Curious Case Of Benjamin Button”: Ok, it cost about $150 million to make. We’ll stay on the low side of things and say that they spent $25 million on advertising/marketing (but we all know it’s probably $50 million+). Grand total: $175 million.
Ok, so far the movie has made $117 million domestically. Let’s say Paramount struck a deal and is getting 60% of the grosses. Guess how much Paramount has made back out of the $175 million that they spent? $70 million!!! They are $100 million in the red! $100 MILLION PEOPLE!
Ok, ok, don’t feel too sorry for Paramount yet. Yes, they will make their money back…Eventually. Benjamin Button will make a little more money domestically after it wins some Acamedy Awards (Oh, sorry, not “win”…Bad word…) After Benjamin Button has some “awards go to” it (there are no “losers”, except for Paramount financing Benjamin Button, of course)
Then there is the foreign gross, which is anybody’s guess. Right now it’s only at $38 million. And once again, remember the studio doesn’t get all of that money.
And then of course, there is DVD/Pay-Per-View/TV and all that stuff. So, yes, by the end of this year, the people at Paramount can finally drink some champagne when Benjamin Button made it’s first 5 bucks profit…But don’t drink too much champagne, you gotta save money for the next guaranteed “blockbuster”!
And then on the other hand, you have “Paul Blart: Mall Cop”…Hahaha Yes, little ol’ Paul Blart, the movie that is getting bad reviews and has a better chance to get a Razzie than it has of having an Oscar “go to” it.
Paul Blart…Production cost = $26 million…Advertising = $25 million?…Grand total: $51 million…It is on pace to make around $110 million. If the production company (Sony) gets 50%, they will have already made a $4 million profit by the end of the theatrical run domestically. Now, I don’t know how the movie will do overseas, but whatever the movie makes from that point on (overseas/DVD etc.) is all profit!
Yes, the little movie is more profitable than the huge, the mighty, “Benjamin Button”.
In the end, for every Paul Blart (Production Budget: $26 million; Domestic Gross: $110 million – projected), Juno (Budget $7.5 million; Domestic: $143 million) and Slumdog Millionaire (Budget: $15 million; Domestic: $90-$115 million projected), there is a Speed Racer (Budget: $120 million; Domestic: $43 million), Australia (Budget: $130 million; Domestic: $49 million) and Poseiden (Budget: $160 million; Domestic: $60 million).
But too often, movie companies LOSE BIG! Yes, there are the “little movies that could”, but sometimes the big companies don’t even see much of that money…And then movie companies can also start a new franchise of movies, but it never gets past the first or second movie, because it doesn’t catch on.
For instance, Chronicles Of Narnia…Prince Caspian sold less than half of the tickets that the first movie did…The company dropped it, and now another company has picked it up…Why? The next movie is going to lose money domestically as well, unless they can produce it for around $26 million like Paul Blart…HAHAHAHAHAHA
Yes, January was a good month…Most of the movies that did well all cost very little to produce (Slumdog, Blart, Gran Torino). Hollywood got lucky. But this month just the opposite could happen! One month you can make $20 million profit with one movie, and then your “guarenteed blockbuster” bombs and you lose $50 million.
In the end, the profits from movies that make money, gets drained by the bombs that lose money!
That’s just the way it is!
I think thats a hell of an idea. You know, the one about residuals for all unions. It’s true that at least for my union, we have no investment at risk in the shows we work on but hey, neither do the actors and they’re talking about going on strike over it! What makes them so special? Because they’re called talent? I’ve seen some of these second rate actors work and if thats what most producers think is talent, i’m going for my SAG card tomorrow cause I could make a fortune! Look guys, the simple truth is this. Most unions support each other because we work together as a family. We dont ask for any more then is fair and we dont hold up the show for personal reasons. Let me say that again, WE WORK TOGETHER. Drivers, Set dressing, Construction, Laborers…..etc. SAG needs to get the picture that the only way this is going to work is if we work together. PERIOD!