Roger Ebert on Falling Movie Revenues

[Tim Tyler]

I'll tell you why movie revenue is dropping...

BY ROGER EBERT / December 28, 2011

 

Roger Ebert blames high ticket prices, Netflix, expensive popcorn, cell phones, and difficulty finding quality movies responsible for the lowest ticket revenue in 16 years.

 

Referenced article:

Movie crowds dip to 16-year low as apathy lingers

David Germain, AP Movie Writer

[K Borowski]

It certainly doesn't help having quality that is, at best 10% better than what a 1080P set can display with an HD signal.

 

 

Compare to the late '90s, when it was VHS versus 35mm contact prints. Now the quality (2K or digital) is horrible. I don't think fans care about any of this, but I definitely think they're left with a bad taste in their mouths forking out money for a "Premium Experience" only to find they've been duped into paying for what amounts to just an oversized screen.

 

 

I remember back in '07 being stuck in the front row of one of these "premium sized screens" - fortunately not one that charged more - they should have paid me.

 

 

I'd imagine someone who goes to see the new IMAX screen at Cranberry Hills PA and finds out that the 70mm 15-perforation IMAX projector has been torn out will have a similarly bad taste in their mouth. 3D sales are (predictably is understatement, as it has happened *thrice* before) tanking.

 

From a business standpoint, a theatre shouldn't maximize profit unless it is convinced the end is near. If you expect your customers to stop coming no matter what, it's good to max out prices while they are coming, otherwise it's suicide.

 

 

 

Anyway, I'm sorry, I can't lament 2K projection dying. There's absolutely nothing remarkable about it. 3D 1.4K projection gives me less than what I can expect at home. Why go to a digital theatre at all? (Or a 2K 35mm DI, which, in most cases except SCOPE prints, is worse than 2K Digital projection?) I'm sorry, I just don't get it. . .

 

Is the EXPERIENCE now just the overpriced concessions, admission, and the sticky seats, twittering neighbors?

 

 

 

The Nolan/Pfister crew is fighting a losing battle to bring back the showmanship, against all major US Cinemas, the IMAX corporation itself, Studios who don't want prints, or theatrical distribution itself because it is a loss-leader most of the time.

[Guest]

When I see Gandhi (1982) on late night TV, I say to myself, "Oh my gosh filmmaking has gone in reverse over the last 30 years!!" I mean good grief that movie is amazing and nothing being made today can compare.

 

Maybe Hollywood will finally wake up and realize that the market cannot absorb 50 super hero movies per year. The market is speaking, but the Hollywood execs are not really listening. They'll have to lose a lot more money before they consider new business models. Many movies actually bomb far bigger than Hollywood let's on, once exhibitors take their cut of the gross and P&A are factored in.

 

R,

[Brian Dzyak]

Making movies has always been a business venture that needs a profit, but ever since the majors were bought up by transnational corporations, the ONLY goal is quick immediate profit. And in their minds, movies that are original material are too great a risk compared to material that has been previously proven in some way. The only reason a movie like INCEPTION got made is because Nolan makes the studio billions of dollars with Batman, otherwise, INCEPTION would have been an ultra-low budget movie or never made at all.

 

The popularity of something like INCEPTION should be a signal to financiers that audiences crave original stories that have good budgets behind them. But the stock-holders are basically in charge and those with the purse-strings still see "proven" material as the fastest path toward quick profit with the least obstacles and doubt.

 

Then, yes, toss in the virtual onslaught of ancillary entertainment and who has time to pack up and actually go to a theater? We still have video rental stores, there is NETFLIX, RedBox, movies on demand, Showtime, HBO, Movie Channel, Cinemax, AMC, Encore, Hulu, YouTube, XBox, Playstation, iPhone games... all of that and more screaming for the precious spare moments audiences might have left after a long day/week at work, shuttling kids around, making dinner, helping with homework...

 

Plus, there are so many movies constantly coming out that if you do happen to miss opening weekend, you might have two or three weekends after that if you're lucky to see the movie that did catch your attention. Remember how Star Wars (the original) was in some theaters for more than a full year before it finally left? You can't do that today. The DVD or "Network Premiere!" would wipe out that theater audience.

 

I don't think it has much to do with quality of screens or even people munching on popcorn in the row behind. Audiences still enjoy getting out to share that cinema experience in large groups in large dark rooms with that flickering light. They really don't know 4K from Special K. And they don't care. What they do want is entertainment and with our society shoving so much and so many options at them constantly, actually going to a theater is a rare luxury for them and for studios.

 

And, you know what? Studios really have themselves to blame. As they sought out new ways to capitalize on movies by making them into video games and DVDs and theme park experiences, they began cutting their own throats. The more time someone spends re-watching Harry Potter on cable or DVD...or playing the video game or going to the theme park... is less time for them to go see a new movie that just came out. There are only twenty four hours in a day. Beyond that, there are so many movies constantly being released that the public doesn't necessarily perceive movies as a special thing anymore. With so much new product constantly available, audiences see these things as rather disposable. If it doesn't immediately pique their interest, they'll wait til it comes on cable or not see it at all.

 

I think that the "trick" here isn't to keep making more and bigger... instead, just work harder to make each movie more special, whatever that means for that particular movie. And, as it has always been, it begins with the writing. A story well told. That's what audiences want to see whether or not it's based on a board game or a dream someone had, it always comes down to telling that story very well. And people who only have their eyes on stock options next quarter aren't the best ones to be making those choices. But, that's the globalized-quick profit now-capitalistic-more! more! more! world we were born into.

[Brian Hulnick]

Aside from my enjoyment of M:I. Ghost Protocol I have generally been staying away from cinemas over the last few months. I recently purchased a projector and 100" screen. The Hi-def movies I have watched have looked a hell of a lot more impressive than they did when I watched them theatrically...no kidding. Inception blew me away, as did both Batman movies. With the advent of Blu-ray and better quality TV's/ Projectors + the ever increasing cost of going to the flicks there is every reason now to watch your favorite movies in the comfort of your own sofa. Maybe then the studios/ cinema owners will listen.

[K Borowski]

By the way, I heard someone saying that revenues were the worst they'd been in 25 years, not 16.

 

 

Either exaggeration, or a different measure used? Anyone on here know for certain?

[Adrian Samuals]

Wouldn't be surprised if it were the former. Home cinema killed it.

[Mei Lewis]

The title of Ebert's article says that movie revenues are falling but then gives no indication they actually are and mentions only one (small?) part of movie revenue stream - cinema.

Does 'movie' mean the same thing as 'cinema' in the US? It doesn't in the UK or elsewhere.

 

I think watching films at the cinema has been a minority thing for the last 30 or 40 years at least. Almost everyone watches films at home (formerly on TV, increasingly downloads) at least sometimes but there are many people who never go to the cinema and even those who do probably watch far more films at home.

[Phil Rhodes]

The market is speaking, but the Hollywood execs are not really listening.

I should make it clear that I have no knowledge or experience of being a producer, but this rings true to me. It seems that what they're doing is becoming more and more conservative, which leads to a tendency to make extremely creatively conservative films which can, at least on paper, be shown to appeal to more or less everyone. I'm not quite sure why but this seems to lead to a position where they end up making one big expensive film, as opposed to making a larger number of smaller films. I don't know why this is, but I suspect it's connected with the fact that if you aren't relying on writing and acting you're probably relying on big concept visuals, star names, advertising, and other things that are expensive but don't necessarily make for a better movie. Writing, on the other hand, is comparatively cheap, but nobody seems to value it. Either way, these sorts of films are popular with an audience of mid-teenagers who are quite sensitive to any suggestion of cheapness. So, because this one film has such a huge amount of money tied up in it, they become even more conservative, even more safe, and all of these problems are exacerbated in a vicious circle of overcaution and unoriginality and telephone-number financial calculations that leads to bilge like the Transformers series.

I'd like to see a lot more films in the $10-20million range, the point where it's possible to make a movie on a professional basis but the amount of money involved is not so large that every ounce of interest and attitude has to be squeezed out of it to satisfy everyone in the boardroom.

Basically, Hollywood has a quality problem, but it seems the last thing they'll ever do is either admit or fix it.

P

[Brian Dzyak]

What studio executives SHOULD ....

 

http://www.dzyak.com/titanic.gif

[Brian Dzyak]

Interesting article: http://www.businessinsider.com/why-the-movie-industry-cant-innovate-and-the-result-is-sopa-2012-1

 

Why The Movie Industry Can’t Innovate and the Result is SOPA

 

 

Steve Blank, SteveBlank.com

 

This year the movie industry made $30 billion (1/3 in the U.S.) from box-office revenue.

But the total movie industry revenue was $87 billion. Where did the other $57 billion come from?

From sources that the studios at one time claimed would put them out of business: Pay-per view TV, cable and satellite channels, video rentals, DVD sales, online subscriptions and digital downloads.

The Movie Industry and Technology Progress

The music and movie business has been consistently wrong in its claims that new platforms and channels would be the end of its businesses. In each case, the new technology produced a new market far larger than the impact it had on the existing market.

1920’s – the record business complained about radio. The argument was because radio is free, you can’t compete with free. No one was ever going to buy music again.

1940’s – movie studios had to divest their distribution channel – they owned over 50% of the movie theaters in the U.S. “It’s all over,” complained the studios. In fact, the number of screens went from 17,000 in 1948 to 38,000 today.

1950’s – broadcast television was free; the threat was cable television. Studios argued that their free TV content couldn’t compete with paid.

1970’s – Video Cassette Recorders (VCR’s) were going to be the end of the movie business. The movie businesses and its lobbying arm MPAA fought it with “end of the world” hyperbola. The reality? After the VCR was introduced, studio revenues took off like a rocket. With a new channel of distribution, home movie rentals surpassed movie theater tickets.

1998 – the MPAA got congress to pass the Digital Millennium Copyright Act (DMCA), making it illegal for you to make a digital copy of a DVD that you actually purchased.

2000 – Digital Video Recorders (DVR) like TiVo allowing consumer to skip commercials was going to be the end of the TV business. DVR’s reignite interest in TV.

2006 - broadcasters sued Cablevision (and lost) to prevent the launch of a cloud-based DVR to its customers.

Today it’s the Internet that’s going to put the studios out of business. Sound familiar?

Why was the movie industry consistently wrong? And why do they continue to fight new technology?

Technology Innovation

The movie industry was born with a single technical standard – 35mm film, and for decades had a single way to distribute its content – movie theaters (which until 1948 the studios owned.) It was 75 years until studios had to deal with technology changing their platform and distribution channel. And when it happened (cable, VCR’s, DVD’s, DVR’s, the Internet,) it was a relentless onslaught. The studios responded by trying to shut down the new technology and/or distribution channels through legislation and the courts.

Regulation/Legislation

But why does the movie business think their solution is in Washington and legislation?

History and success.

In the 1920’s individual states were beginning to censor movies and the federal government was threatening to do so as well. The studios set up their own self censorship and rating system keeping most sex and politics off the screen for 40 years. Never again wanting to be at the losing side of a political battle they created the movie industry’s lobbying arm, MPAA.

By the 1960’s, the MPPA achieved regulatory capture (where an industry co-opts the very people who are regulating it,) when they hired Jack Valenti, who ran the studios’ lobbying efforts for the next 38-years. Ironically, it was Valenti’s skill in hobbling competitive innovation that negated any need for studios to develop agility, vision and technology leadership.

Management of Innovation

The introduction of new technology is always disruptive to existing markets, particularly to content/copyright owners whose sell through well-established distribution channels. The incumbents tend to have short-sighted goals and often fail to recognize that more money can be made on new platforms and new distribution channels.

In an industry facing constant technology shifts the exec staff and boards of the studios have lawyers, MBAs and financial managers, but no management skill in dealing with disruption. So they rely on lobbying ($110 million a year,) lawsuits, campaign contributions (wonder why the President won’t be vetoing SOPA?) and Public Relations.

Ironically, the six major movie studios have a great technology lab in Silicon Valley with projects in streaming rights, Video On Demand, Ultraviolet, etc. But lacking the support from the studio CEOs or boards, the lab languishes in the backwaters of the studios’ strategy. Instead of leading with new technology, the studios lead with litigation, legislation and lobbying. (Imagine if the $110 million/year spent on lobbying went to disruptive innovation.)

Piracy

One of the claims that studios make is that they need legislation to stop piracy. The fact is piracy is rampant in all forms of commerce. Video games and software have been targets since their inception. Grocery and retail stores euphemistically call it shrinkage. Credit card companies call it fraud. But none use regulation as often as the movie studios to solve a business problem. And none are so willing to do collateral damage to other innovative industries (VCRs, DVRs, cloud storage and now the Internet itself.)

The studios don’t even pretend that this legislation benefits consumers. It’s all about protecting short-term profit.

SOPA

When lawyers, MBAs and financial managers run your industry and your lobbyists are ex-Senators, understanding technology and innovation is not one of your core capabilities.

The SOPA bill (and DNS blocking) is what happens when someone with the title of anti-piracy or copyright lawyer has greater clout than your head of new technology. SOPA gives corporations unprecedented power to censor almost any site on the Internet.

History has shown that time and market forces provide equilibrium in balancing interests, whether the new technology is a video recorder, a personal computer, an MP3 player or now the Net. It’s prudent for courts and congress to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.

What the music and movie industry should be doing in Washington is promoting legislation to adapt copyright law to new technology — and then leading the transition to the new platforms.

The U.S. State Department has been championing the Internet Freedom initiative across the world. Secretary of State Clinton said, “…when ideas are blocked, information deleted, conversations stifled, and people constrained in their choices, the Internet is diminished for all of us.”

It’s too bad the head of the MPAA – an ex Senator - made a mockery of her words when he wondered “why our online censorship can’t be like China?”

We wonder, “Why can’t the film industry innovate like Silicon Valley?”

Lessons Learned

Studios are run by financial managers who lack the skills to exploit disruptive innovation

Studio anti-piracy/copyright lawyers trump their technologists

Studios have no concern about collateral damage as long as it optimizes their revenue

Studios $110M/year lobbying and political donations trump consumer objections

Politicians votes will follow the money unless it will cost them an election

[Adrian Samuals]

Well it seems that Blu-ray sales (not downloads) are going through the roof, even in these dire financial times. I think it's just cinema ticket sales.

[Markshaw]

With the advent of Blu-ray, coupled with vastly improved displays, there is little need to visit an over priced cinema filled with noisy teens using their cell phones.

[K Borowski]

At 10% generation loss(not taking into account that a 2K filmout is alaready less than 2K), 35mm prints that cost at least $1500 a piece look substantially *WORSE* than your $14.99 Bluray. The $80,000 2K digital projector can look, at best, 10% better.

 

The only "film" worth seeing in the theatre is 4K DLP, 4K DI (now that 35mm print volumes are falling, I've heard rumors there are a lot more 2nd-gen. copies out there. "Warhorse" was a 4K DI that looked, literally razor-sharp on 35mm), or contact print.

 

 

 

Honestly, at over $10/ticket, why see something once for more than the price owning it 3 mos. hence.

 

I was watching some old television the other day I'd taped way back when, and Jurassic Park was selling for $24.95 on VHS in 1994. With the price of inflation that has got to be at least $35 in today's money.

 

 

 

To put it another way, with, adjusted for inflation, theatre tickets doing nothing but increasing in price (coupled with a sometimes 50% loss in quality), and home movie quality hmm, 240i to 1080P that's at least an 18-fold improvement, for reduced costs, of course theatres are going to die out.

 

 

The public has, frankly, glotten pissed off at 3D admission prices and big screens with small video projection quality. They don't come out spouting about all the technical nonsense I just did, because they don't do this for a living, but they "sense" something is wrong. They don't know what the hell it is, but they know it's not worth the $16.95 per person for the "IMAX [2K projectors that look REALLY bad on a big screen, especially in he 4th row]" "3D" movie they just saw.

 

 

 

I've probably watched my last movie ever on 35mm, maybe the last I'll ever see. I'm unapologetically Union, and when my brothers and sisters get booted out of the booths at the end of the year here in the US, I'll be God-damned if I get caught dead giving a pure $9 or 10 in profit to Plano Texas, Kansas City, or Tennessee.

 

 

 

And I want to know who is going to fix the focus, restart the movie when a server that's probably controlled by some hack in Mumbai crash on a Friday night? There's literally no one upstairs watching now. The only people that work in theatres are the kids behind the candy stands.

 

 

 

And, not to call out anyone in particular, but God forbid someone in a fellow IATSE have any loyalty to the little guys in a local affiliate. When I was out picketing over the summer, I really have to wonder how many union guys crossed the line and went to see the movie anyway instead of going another mile or two out of their way to the IA affiliated theatre.

 

You're outside 12+ hours a day getting rained on, then you drive by a full parkinglot (anyway) on the way home.

 

 

 

 

 

 

I guess what I am trying to say is, if you take all the skill, showmanship, hundreds of years experience and replace it with some IT guy on a server running the whole company, do you really think you can get away with this and not have people notice?

 

The '50s response to television was MORE COST MORE INNOVATION, 70mm film, widescreen [real] 3D, the kind that you needed two film projectors, one for each eye. What's the response to Bluray in 2008-9? Cut costs eliminate any job, except security, that makes more than $15/hr. raise prices, slap "SUPER DUPER DIGITAL HD DLP IMAX!!!!™" on everything, and pray to God noone notices or says anything about it.

 

 

Seriously, what company [CINEMARK] would be in its right mind tearing out a projector capable of projecting at least 2,000 megapixels per second [iMAX 15-perf. 2nd generation contact print] and replace it with a 2K twin projector (at most 108 megapixels per second).

 

So the theatres are offsetting the 18-fold improvement in home movie quality by introducing a greater-than 18-fold *reduction* in their own!

 

 

 

Who in their right mind would, seriously, do something like this? I'm pretty sure it's a corporate suit who has never run a foot of film in his or her life. This is not surprising, though, as one would expect the management at theatres to know how to do this job skillfully as well, and they don't judging by all the scratches, damage, missing chunks of footage at every non-Union theatre out there. . .

[Brian Dzyak]

Who makes decisions and why? "Suits" who are only looking at the bottom line. If it's cheaper, they do it that way. Period.

 

THAT is the inherent problem with "Western civilization." The quest for MORE and measuring it by profit is the problem. No longer is doing something because it is just inherently "better" good enough. Quality takes a backseat to profits for those at the top so if it means blackmailing governments for tax bribes (incentives) and putting up with lower quality crews, then so be it. If it means using a lower quality acquisition format because it is cheaper, then so be it. If it means projecting in lower quality because it's cheaper, then so be it. When money is the primary purpose of doing something, then real quality and meaning might as well not exist.

 

But don't worry. Profit-obsessed Western culture will collapse itself sooner or later and indies and real film will return. Maybe. :)

[Markshaw]

Who makes decisions and why? "Suits" who are only looking at the bottom line. If it's cheaper, they do it that way. Period.

 

THAT is the inherent problem with "Western civilization." The quest for MORE and measuring it by profit is the problem. No longer is doing something because it is just inherently "better" good enough. Quality takes a backseat to profits for those at the top so if it means blackmailing governments for tax bribes (incentives) and putting up with lower quality crews, then so be it. If it means using a lower quality acquisition format because it is cheaper, then so be it. If it means projecting in lower quality because it's cheaper, then so be it. When money is the primary purpose of doing something, then real quality and meaning might as well not exist.

 

But don't worry. Profit-obsessed Western culture will collapse itself sooner or later and indies and real film will return. Maybe. :)

 

Having spent a great deal of time in South East Asia, I can assure you that Eastern "civilization"is far worse.

[Brian Dzyak]

Having spent a great deal of time in South East Asia, I can assure you that Eastern "civilization"is far worse.

 

 

Uhhuh. Read this: http://www.amazon.com/Threshold-Western-Culture-Thom-Hartmann/dp/0670020915

 

and this: http://www.amazon.com/Last-Hours-Ancient-Sunlight-Revised/dp/1400051576/ref=pd_sim_b_1

[Markshaw]

Unless the movie is especially outstanding, I will wait til the Blu-ray is released. I generally try to avoid the cinema these days.

[Brian Hulnick]

I watched Super 8 on my 100" screen over the weekend and I swear I saw details I never saw in the cinema. And the 9.1 surround sound was a hell of a lot better than in the cinema.

[Adrian Samuals]

I used to meet up with friends once a week to watch a movie at the cinema, any movie as it was the fun of going out to the flicks. However with the ever increasing ticket/popcorn/ snack prices we meet up round one anothers places now. More fun anyway.

[Daniel Jackson]

Somehow I managed to miss The Girl With The Dragon Tattoo at the cinema so will have to wait until it comes out on Blu-ray.

Luckily I will only have to wait until 21st March. I too have gone "off" going to the cinema.

[George Ebersole]

Movies today are worse than ever before. I went and saw "Coriolanus" last night, instead of watching the Oscars, largely because I wanted to watch something that I thought would be worth my money. It was, but only just. As much as I thought "Coriolanus" was a good film, it was in essence and form, a made for TV movie, although a really good one.

 

Movies are losing revenue because of games and high ticket prices both. Games are more engaging than films. But films can bring an emotional confirmation that games cannot.

 

I think the days of "Ghandi" or the mature rom-com about 30 and 40 somethings are long over.

 

Just my take.

[Daniel Jackson]

I have to say that there have been some pretty good movies released over the years, along with some real stinkfests. I think that studios are scared of making movies such as Ghandi anymore. They are all about $$$$$$$$

[George Ebersole]

I have to say that there have been some pretty good movies released over the years, along with some real stinkfests. I think that studios are scared of making movies such as Ghandi anymore. They are all about $$$$$$$$

Studios and films are a product, and are always about money. Right now it's a matter of why commercial films are losing their market share to other venues. Example; concerts are the biggest crowd draws, but concerts are essentially road show films from the old days, where the "film" is the performer who needs to be physically present at each performance.

 

Films on the other hand are portable, and can be distributed for free, even though the studios try to keep a tab on their exhibition. Because piracy has cut so much into lost revenues for the studio, the studios have to charge more for lost revenue. They pass that cost onto theatre chains and independent owners, who in turn try to make up the cost by raising ticket prices, selling overpriced food and showing commercials before previews. Believe it or not, prior to 1990, theatres didn't show commercials, and here in the Bay Area people actively booed the commercials for a time. Now it's the norm.

 

A few weeks back I went and saw the first half of a film before walking out on it. The theatre was a sectioned portion of an old huge movie house in SOMA SF. It was a "film" shot digitally, and distributed digitally. The image was fuzzy, the film itself was slow and stupid, and the the theatre actually had durable furniture chairs.

 

Okay, that was an arthouse theatre, but even in the more mainstream theatres, like the Kabuki in Japan Town or the Embarcadero, even though things are more comfortable, the films just aren't as good as they used to be. Combine that with the piracy element, and you can see how ticket prices are going to keep skyrocketing.

 

You used to be able to see a matinee for five dollars. Matinees used to be popular. Not so much now.

 

Until the theatre chains and major can rethink their distribution, ticket are going to keep going up until no one is willing to buy one. We've seen it happen with baseball and other major sports, but again the sports venues have the difference in that you can't really pirate a live performance or team (not too much anyway). Films on the other hand, once they're made and hit the theatres, that's it.

 

Again, just my two bits.

 

p.s. again, games are more interactive, and I think the more the majors try to compete or pray off of games, the more they're going to lose out.

[Scott Larson]

Is it unreasonable to expect at least DVD image quality in a movie theater these days? Every film I've seen projected in a theater for at least the past five years at has been incredibly blurry, clearly inferior to even a DVD at home.

 

To save my eyesight I've been going to local digital theaters. They always look better than in film theaters even though most (maybe all) are only HD resolution. One theater sometimes projects (if that's the right term) foreign films that are from tapes intended for standard definition television broadcast in Europe. Even they look better than projected films.

 

The most surprising thing is that very few people I've talked to have noticed how terrible these movies look on the big screens. It's probably not a factor in declining movie revenues.