Monday, September 3, 2012

Summer Box Office Season is Over (tho the heat goes on)

So, the long hot summer goes on – and from a weather stand point on and on and on, but for Hollywood the summer blockbuster season is over. And it is really over. From a box office standpoint it is one of the worst in years.

Ticket sales this summer are down 6.7% from the same period last year, despite more movies being released.

It would have been worse had it not been for the performance of the Avengers and The Dark Knight Rises. The Avengers took in $620 Million domestic box office. Dark Knight has grossed over $430 Million. Ironically, the shooting in Aurora, CO at the midnight opening of Dark Knight is being blamed by some in Hollywood for the drop off in attendance contributing to poor ticket sales.

Other reasons cited by studio execs for decreased attendance/ticket sales include the Olympics and the continuing poor economy – both domestically and in Europe.
Certainly, that can be true. But also, it may be that poor product contributes. Despite more movies being released this summer major studios are more and more putting all their eggs into fewer and fewer features in the hopes that the one blockbuster will make their year.

A $200 Million dollar blockbuster with a marketing budget of $150 Million needs to gross at least $350 Million just to break even. The vast majority of films released this summer have failed to reach even $100 Million gross. To be fair many of those films were not budgeted at $200 Million but regardless have failed to break even.
The exceptions? Lower budget quality made films. They may not gross as much but they also did not cost as much.

As I have noted, better product, targeted at a more expansive audience (the older demographic, for instance) can improve a studios bottom line. Indie producers know that, one only needs to look at the performance of the Weinstein Company. Of course even an Indie can fail to pass the break even point but the chances of success are much greater if the one strives for quality and has a realistic budget.

Coming? What kind of film can make a good return on investment? What kind of film and what size budget has the best chance of financial success.

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