The Bright Side

As our focus turns to Halloween costumes and Thanksgiving travel logistics, the one certainty that moviegoers can rely on yet again this year is that a barrage of potentially good to great films will be released just about every weekend from now until Christmas, many of these films vying for Academy Award nominations.  In fact, this phenomenon has already begun in earnest, with the release of Paul Thomas Anderson’s The Master and Ben Affleck’s Argo.

I don’t need to regurgitate the conventional wisdom as to why Hollywood chooses to save its best for last.  Of the most recent Best Picture winners, The Artist, The King’s Speech, Slumdog Millionaire, No Country for Old Men, and The Departed were all fall releases, while only 2009′s The Hurt Locker arrived mid-year.  It’s as if the movie industry strives to mindlessly entertain us for the first nine months of each year and then, feeling guilty about it, tries to make up for it in the home stretch.  But, listen, I don’t feel like whining about this, especially when I’m reminded that I’ve still got Flight, Lincoln, Life of Pi, Silver Linings Playbook, Hitchcock, Killing Them Softly, ‪Cloud Atlas‬, Zero Dark Thirty, On the Road, and Django Unchained to look forward to.

Of the best-reviewed movies that were deemed by their distributors unworthy of fall releases in 2012, Moonrise Kingdom, The Best Exotic Marigold Hotel, and To Rome with Love stand little chance of nabbing Best Picture nominations, leaving only Beasts of the Southern Wild, released way back in June, to round out that inauspicious category (The Master was technically a September limited release, but didn’t expand to more cities until October).

Again, I’m not going to waste any more energy than necessary explaining the reasoning behind Hollywood’s bizarre release strategies; suffice to say it is thought to be in the studios’ best interests to release mainstream movies when audiences are in the mood for mainstream entertainment, and to maximize the already limited box office potential of better films during that short window at the end of the year when audiences are in the mood for something more substantial.  Let’s just leave it at that.

And I definitely don’t want to get all hung up on figuring out why Hollywood won’t spend huge amounts of money on the best scripts anymore.  Leading up to this awards season, the coffers opened up for Life of Pi (reported $100 million budget), as well as Lincoln (reported $65 million budget).  Argo, which I saw on opening weekend and thought was terrific, also cost in the neighborhood of $50 million.  Here, I find myself in partial agreement with the studios: if a movie such as The Artist can only earn $45 million domestically after winning Best Picture, it makes little sense to invest heavily in specialty pictures whose budgets will likely exceed their grosses — that is, unless a studio chooses to take the long view, hoping that, by year’s end, the totality of the films they released will have turned a profit, and that some of the more commercial, junkier titles will have helped pay for the losses incurred by truly special ones.

But maybe that’s asking too much.  And, from a purely financial standpoint, why shouldn’t film studios make money off the films they produce?  And that, to me, is why the most exciting industry development in recent years has been the relative box office success of inexpensively produced movies.  I honestly don’t think we’ve experienced a period like this in the modern era.  Now, I know what some will say: there have always been less expensive movies that have tried to compete with major studios releases.  And, yes, to an extent, that has always been the case.  But that is not what we’re seeing right now.  Today, it’s the major studios themselves who are in the business of releasing low budget titles.  It’s the majors who have discovered that, for certain types of films, it makes no sense to overspend: no flood of Oscar nominations, critical acclaim, or film festival adoration will help a studio recoup its investment if the movie in question is intended for a niche audience.

And that, as far as I’m concerned, is the greatest thing to happen to the movie industry in 30 years.  Suddenly, the major studios are in the business of making relevant films again.  These are pictures that cost little to produce and, more often than not, end up turning a profit.

Can anyone honestly say that Warner Bros. would have released Magic Mike a decade ago?  A movie about male strippers?  But with its astonishingly low budget of $7 million — heck, it must have cost them twice that in marketing and advertising — Magic Mike went on to earn over $110 million domestically.

Speaking of Channing Tatum, can anyone really argue that a big screen version of 21 Jump Street would have been as funny, smart, and subversive had it been released ten years ago?  A 2002 version of that film would have cost $80 million to produce — twice the $40 million number that Sony actually spent — and would have been rewritten by 20 writers and watered down to the point of meaninglessness, with, on top of all of that, a much more predictable cast (i.e., no Jonah Hill).  Maybe Adam Sandler would have played Hill’s role, and the movie would have been designed around Sandler’s childish, aggressive on-screen persona.

Could a movie like Chronicle have existed as a heavily promoted studio release in a previous era?  I don’t want to spoil the movie for you if you haven’t seen it, but let’s just say the main protagonist takes a trip to the dark side.  It turns out the writer and director on that film were each only 27 years old.  This isn’t unprecedented by any means, but it is nonetheless risky.  And yet, Fox was more than happy to gamble on a deconstructed superhero premise with a shooting budget of only $12 million (the film went on to gross over $125 million worldwide).

Or take the example of Looper.  This film is a watershed moment in movie financing.  If you haven’t listened to The Business podcast discussion on U.S./Chinese co-productions, you really ought to.  Looper had a shooting budget of $30 million, much of it secured by its Chinese partners.  Since its release three weeks ago, the film has earned over $50 million domestically and at least that amount in China.   All this from a quirky time travel story written and directed by indie darling Rian Johnson (of Brick fame).

There were other more modest yet equally encouraging success stories throughout 2012 that deserve to be a part of this conversation, numerous titles with minuscule shooting budgets that had extremely respectable returns.  End of Watch had a $7 million budget.  Think Like a Man had a $12 million budget, as did Act of Valor and Project X.  The Possession was made for $14 million, The Woman in Black for $15 million, Moonrise Kingdom for $16 million, and Pitch Perfect for $17 million.  These eight films accounted for close to $450 million in domestic gross box office.  And I’m not even including the ultra cheap success stories such as The Devil Inside ($1 million budget) or Sinister ($3 million budget) that grossed over ten times what they cost to produce (in the case of The Devil Inside, upwards of 50 times).

And that brings us to two crucial points about today’s film industry:

1. Box office returns don’t matter the way they used to.  It’s always better to have a hit than a bomb, certainly, but, in general terms, a lot of risk can be mitigated in the movie business today by simply controlling production costs.  For instance, Richard Linklater’s Bernie, starring Jack Black, pulled in a relatively disappointing $9 million in domestic box office, but, on the other hand, it had a reported budget of only $6 million.  Should it have earned more?  Probably.  But should this provoke some kind of sky-is-falling conversation about the demise of American cinema?  No, not by a long shot.  First of all, the movie exists, which, trust me, is the single most important outcome as far as Richard Linklater is concerned.  But, beyond that, you don’t need to shed any tears for Bernie‘s investors.  The film will eventually break even.  If you make a good movie for $6 million, it will eventually break even.

Arbitrage, directed by noted documentary filmmaker Nicholas Jarecki and starring Richard Gere, also had a budget in the $6 million range.  It’s earned around $6.5 million after four weeks in release, but, it too will eventually break even.  And, even if it doesn’t, no one will lose their shirt.  And besides, the movie exists.  It’s good and it exists.

A few other movies that were made for peanuts in 2012 and earned just enough money to one day break even (if they haven’t already): Safety Not Guaranteed, Celeste and Jesse Forever, and Sleepwalk with Me.  Keep in mind that I’m only focusing on theatrical box office returns: more and more, indie titles are relying on VOD revenue to turn a profit.  That means that even though Julie Delpy’s 2 Days in New York earned a modest $600,000 theatrically, it made quite a bit more than that through VOD, and cost next to nothing to produce.  And it exists.

A few years ago, when indie grosses began to crater, there was not yet an established VOD option to make up for the losses.  For the current generation of American independent filmmakers, this new revenue stream means that it is finally possible, assuming budgets remain low, to recoup production costs through a combination of theatrical distribution, VOD rentals, and disk and cable residuals.  This will hold true for the next several years, even if theatrical attendance continues to decline domestically.  What’s different about the state of the movie industry in 2012 is that it doesn’t take tens of millions of dollars to produce great looking movies anymore, and you don’t need a movie star in the lead role to get people interested.  Just ask Benh Zeitlin, director of Beasts of the Southern Wild.

This reconfiguration of the financial side of filmmaking will have an incalculable impact on the types of lower budgeted movies produced over the next several years.  It’s already having a huge impact.  If you’re politically liberal, chances are you weren’t paying attention, but, if you’re conservative, you may have already gone to see 2016 Obama’s America.  Either way, did you know the movie grossed $34 million?

Did you also know that Moonrise Kingdom outgrossed Rock of Ages, starring Tom Cruise, Abraham Lincoln: Vampire Hunter, a CGI-heavy action/horror movie, That’s My Boy, starring Adam Sandler, The Watch, with Ben Stiller, Vince Vaughn, and Jonah Hill, and Trouble with the Curve, starring Clint Eastwood?

But even if Moonrise Kingdom hadn’t done as well as it had, it still brought together a remarkable cast on a limited budget, and it would still have clawed its way back to eventual profitability.  And, yes, it would still exist.  The biggest difference between 2012 and 2002 is that, in 2012, there is now a cheaper way to shoot, a cheaper way to edit, and a cheaper way to distribute.  Box office returns may be in a state of precipitous decline, but budgets have gotten so low that filmmakers and studios can still find ways to make money.

2. Hollywood has embraced the philosophies of indie financing and lower returns.  This may prove to be problematic for filmmakers down the line, but, at least for the time being, it’s a welcome development.  I’ve written about this before, but one of the reasons that indie movies — “Sundance” movies, for lack of a better term — have had such a hard time reaching mainstream audiences of late is that the commercial film industry has been producing or distributing its own $5 million movies.  This puts the truly independent producers in a bit of a pickle: ordinarily, they would have had the lower budgeted market all to themselves, whereas now they must compete with the likes of Sony and Paramount.

Money has always flowed into Hollywood from unexpected places.  Today, we’re talking about Chinese financing.  Or Larry Ellison’s daughter.  Or Kickstarter.  But, the truth is, the movie industry has always relied on outside financing, whether it be from hedge funds or real estate tycoons or unhappy dentists.  What’s different now is that Hollywood is no longer thumbing its nose at movies with lower budgets.  It used to be conventional wisdom that the major studios would simply ignore any movie that didn’t cost over $50 million to produce, or didn’t earn back $100 million, or wasn’t developed in-house by one of their high-priced producers under contract.  But that is no longer the case.  The majors develop fewer and fewer of their own properties anymore, and the movies they do green light are of the blockbuster variety, intended for international audiences.  That leaves a massive void in each studio’s release schedule, which can only be filled by acquiring inexpensive, independently financed titles.  Depending on the project, studios are suddenly willing to overlook what were once perceived as deal-breaking shortcomings, such as poor production values or the lack of a name actor in the lead role.

It used to be that a $6 or $7 million return on opening weekend was perceived as a disaster.  Not anymore.  Paramount grossed a paltry $25 million on their heavily hyped Katy Perry movie, but it turns out that it was enough: the movie only cost $12 million to produce.  New kid on the block Open Road Films grossed a meager $14 million on Hit and Run, but you don’t hear them complaining, because that movie only cost them $2 million!  Fox knew exactly what it was doing when it budgeted The Three Stooges at $30 million: had they spent a nickel more, it wouldn’t have broken even.

This is the place where the film industry has been trying to move toward for decades.  Remember Jeffrey Katzenberg’s infamous leaked memo from 1991? Remember this line?

With success came bigger budgets and bigger names. We found ourselves attracting the caliber of talent with which “event” movies could be made. And, more and more, we began making them. The result: costs have escalated, profitability has slipped and our level of risk has compounded.

What Katzenberg wrote 20 plus years ago still holds true today with regard to blockbusters.  Hollywood continues to risk hundreds of millions of dollars on each pre-branded property aimed at international audiences.  It’s a huge source of anxiety for studio executives, but it shouldn’t really matter to the rest of us.  To the extent that a movie such as The Avengers, with its nonstop assault on our senses, numbs us to the more nuanced pleasures of smarter, more complex filmmaking — yes, it’s a problem.  But, more and more, American audiences have begun to turn away from derivative, formulaic pictures.  Don’t believe me?  The new Judge Dredd movie, this one simply called Dredd, bombed.  Here Comes the Boom, starring Kevin James and once trumpeted by Sony as a centerpiece of their summer schedule (before its release date shifted), also tanked.  And the list of expensive movies bailed out by overseas box office is growing all the time: Wrath of the Titans, Dark Shadows, Mirror Mirror, Battleship, Total Recall, This Means War, Ghost Rider: Spirit of Vengeance, MIB 3, Snow White and the Huntsman, Prometheus, The Bourne Legacy, John Carter, American Reunion, Resident Evil: Retribution.  By now I think most American audiences are aware that the cynical and substandard movies on that list were not in any way designed to appeal to domestic tastes.

But, honestly, so what?  Skip those movies.  That’s what I did.  That’s what everyone did.

Now, it may sound like I’m not in favor of expensive movie making under any circumstances, but that’s not the case.  I enjoy the occasional blockbuster (my son loves just about all of them, so I end up watching them anyway) and I view an expertly crafted $50 million movie such as Argo aimed at grown-ups as a gift from movie heaven.  The more expensive the project, the greater the risk and exposure for the studio, but when a movie with a hefty budget works, it can lead to stunning results.  But it can sometimes feel like the industry is facing wildly conflicting messages about what defines an appropriate film budget.  I had a really hard time getting my head around this recent article on Megan Ellison by Sharon Waxman in TheWrap.  The gist of the article is that Ms. Ellison’s investments in three new films — Killing Them Softly, The Master, and Zero Dark Thirty — may end up having an unintentionally detrimental effect on the entire movie industry.  Why?  Because, well…I’m not sure.  I think it’s because The Master cost around $35 million to produce and may not make all its money back.

Here I think any argument about keeping budgets low runs into a brick wall.  First of all, $35 million is not a fortune in the movie business.  Beyond that, not every movie will make its money back.  But given that reality, shouldn’t investors be encouraged to bet on projects that have the best chance to be great?   Instead of celebrating the fact that a deep pocketed investor was willing to bankroll three highly ambitious and well regarded motion pictures in a single year — something most investors fail to do during their entire lifetimes — Ms. Ellison, according to this article, has opened herself up to criticism because The Master had a budget that was too high.  This might be a valid criticism if The Master were the only movie Megan Ellison invested in, but there are two others yet to come, both of which have box office potential.  Killing Them Softly stars Brad Pitt and James Gandolfini, and looks pretty darn good.

And what of Zero Dark Thirty, Kathryn Bigelow’s follow up to The Hurt Locker, about the mission to kill bin Laden?

Is Ms. Waxman arguing that it won’t be a hit?  I’m not sure I would bet against that movie.  Once these three movies have completed their theatrical runs, and all their grosses have been tabulated, and their award nominations counted, that seems to me the appropriate time to write a piece about how some young untested investor threw her money around Hollywood and tried to mess with the natural order of things (assuming that, when all is said and done, the three films that Ms. Ellison produced will have collectively lost money).

But, listen, I don’t want to end this post on a sour note.  See Argo.  I should probably mention that much of the story has been fictionalized; I’d have preferred knowing that before going in.  But even after reading the original Wired article that adhered more closely to the facts (don’t read it until after you’ve seen the movie!), I still consider Argo to be the best film I’ve seen so far this year.

A couple of interesting podcasts and articles I wanted to mention in brief:

– One of the ways that indie film will continue to expand its audience is by broadening its thematic canvas.  We shouldn’t automatically associate indie cinema with a certain kind of storytelling style — the darker, more depressed side of everyday human existence.  That’s not to say that indie filmmakers should abandon those themes, just that there might be some way to combine more traditionally dramatic screenwriting techniques with a rebellious, oftentimes comic, independent sensibility.  Bottom line: indie cinema could afford to be a bit more entertaining.  With that in mind, have a listen to another The Business podcast, this one an interview with Derek Cianfrance, director of Blue Valentine, about his new film, The Place Beyond the Pines.  After Blue Valentine, I wasn’t sure what to make of Cianfrance — it took me a couple of sittings to get through that film — but now I’m thinking that, just as Rian Johnson has reinvented himself with Looper, so too has Derek Cianfrance moved his career in a new and unexpected direction.

– I don’t ordinarily blog about screenwriters, but I actually wrote a whole bunch of scripts in a past life (okay, after college) and continue to take a crack at the format every three or four years.  The British Academy of Film and Television Arts (BAFTA) consistently makes available truly wonderful lectures from invited actors, directors, and writers, and this latest one from Scott Frank may be one of their best of the screenwriters series (The Charlie Kaufman lecture was hilarious and riveting, but in my opinion not as useful to the fledgling writer). One of the points I took away from Frank’s lecture is that it may not do a person any good to make creative decisions out of an impulse to please the people he or she is working for.  Easier said than done, I know, but when a writer with the professional clout of Scott Frank tells you that he regrets not taking more risks with his own writing, that seems like the kind of advice worth taking to heart.

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