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