Why Studios Must End Their Mega-Budget Obsession
by ANDREW STEWART and RACHEL ABRAMS
While the movie industry is on track for a record summer box office, there’ s blood on the streets of Hollywood.
on a single movie and letting more quirky or personal films migrate to video-on-demand.
The tipping point of Hollywood’ s latest blockbusterobsession appears to have begun in the fall of 2011, after a string of pricey tentpoles, among them“ Tower Heist,”“ Immortals,”“ Jack and Jill” and“ Happy Feet Two,” flopped at the box office. This summer’ s slate was put in motion before any of the studios could even consider a course correction, if indeed that is what they are thinking.
One studio executive pointed out that most of the movies this summer were greenlit 18 months to two years ago, and that any less profligate strategies won’ t be evident until next summer at the earliest.
Today, studios routinely spend north of $ 400 million to produce, market and distribute their big-event films around the world. And they’ re making more tentpoles each year. The 12 top-grossing films each year make up about 75 % of domestic ticket sales, according to a recent analyst report from Cowen and Co. Although the international market, which now accounts for about 70 %
The strategy adopted by most of the majors can pay off big when it works. But judging from the hundreds of millions in red ink spilled by the studios between late May and now, it can also be a blueprint for disaster.
The overcrowded summer of 2013 will likely be remembered more for its costly misfires— Sony’ s“ After Earth” and“ White House Down,” Disney’ s“ The Lone Ranger,” Warner Bros./ Legendary’ s“ Pacific Rim” and Universal’ s new release“ R. I. P. D.”— than for its predictable hits, which include“ Iron Man 3,”“ Man of Steel” and“ Despicable Me 2.”
Steven Spielberg and George Lucas look awfully prescient with the predictions they made last month during a panel discussion at the USC School of Cinematic Arts.
“ There’ s eventually going to be a big meltdown,” Spielberg forecast.“ There’ s going to be an implosion where three or four or maybe even a half-dozen of these mega-budgeted movies go crashing into the ground, and that’ s going to change the paradigm again.”
That paradigm, the filmmaker explained, is that the studios prefer spending $ 250 million writersguildsa. org | 25