It Just Doesn’t Matter

What difference does it make to a Hollywood studio if one of their pictures is reviled by critics and rejected by American audiences, as long as it makes loads of money overseas?  Sure, studios are run by human beings (I think), who are capable of having their feelings hurt if a movie they championed turns out to be a turkey; but, as the saying goes, these execs are crying all the way to the bank.  Make no mistake: box office is booming — and not just internationally, but here at home as well.  This past May and June were the highest grossing on record.  This entire year could end up being the highest grossing of all time.  And that’s not even taking into account international returns, which just keep rising.

How is that possible?  One trend I’ve noticed this year is that the bombs are getting a lot more attention than the hits.  Star Trek Into Darkness has gotten almost zero press, as far as I can tell.  No one is writing or talking about it, and there is little momentum for another follow-up in a few years time.  But it will gross over $450 million in total box office, from a budget of around $200 million (typical for a modern blockbuster), resulting in a modest profit for Paramount once the theaters get their cut (approximately 50%).  A bigger success such as Iron Man 3 might grab all the headlines, but even a formulaic Star Trek sequel turns out to be an under-the-radar hit for Paramount, a quietly unassuming mini-blockbuster, if such a thing is even possible.  There are numerous examples of this phenomenon in 2013, from either side of the box office spectrum.  After Earth flopped — and everyone heard about it.  White House Down faltered — and similarly received the worst kind of attention.  This holiday weekend, The Lone Ranger is projected to crash and burn as well (even as Despicable Me 2 cruises to superhero-sized numbers), and so a narrative forms in the public’s mind that big budget movies are losing money.  Other notable losers: Oblivion, Jack the Giant Slayer, A Good Day to Die Hard, Gangster Squad, The Internship, and The Incredible Burt Wonderstone.  If you’re trying to argue that Hollywood is having a difficult time connecting with today’s movie audiences, these films would be your cases in point.

Well, sort of.

78% of the total box office take of A Good Day to Die Hard came from overseas, and that film ended up grossing over $300 million.  Oblivion had a similar outcome: 69% of its box office came from outside the U.S., and it grossed a respectable $285 million when all was said and done.  Not bad for a couple of perceived duds.  Jack the Giant Slayer and After Earth, while they have legitimately lost tens of millions of dollars for their respective distributors, underscored this new box office trend when over 67% of their returns came from overseas.  Again and again this story is being repeated.  Warm Bodies, Evil Dead, and Hansel and Gretel: Witch Hunters, three movies in the horror genre that were received indifferently here at home, all benefited from healthy international returns (especially Hansel and Gretel).

In America, the threshold of success for a typical big budget studio release is $100 million in domestic gross.  This is an entirely arbitrary number, but we fall for it each and every time.  Regardless of overseas performance, if a big budget movie earns more than $100 million here at home, it’s a hit.  If it earns less, it’s not.  In either case — whether a movie finishes its domestic run north or south of that $100 million number — no pricey studio release can expect to earn a profit without doing gang-buster business overseas.  Epic may not have been your child’s favorite movie of the year, but it crossed the $100 million mark at home, which entitles it to hit status.  But it turns out that Epic only broke even because 55% of its grosses came from overseas.  The Hangover Part III was critically panned in the U.S., but still gets to call itself a hit after taking in over $110 million domestically.  But if not for the additional $230 million The Hangover Part III grossed overseas, that sequel to a sequel would never have earned a dime (it cost $100 million).  But make no mistake: Warner Bros. is thrilled with these numbers, and couldn’t care less if the American media dinged The Hangover Part III for under-performing, or if audiences came away feeling ripped off.

G.I. Joe: Retaliation was another film that suffered from bad PR, but cleared that magic $100 million hurdle at home and scored huge numbers internationally.  Notice a trend here?  Does it concern Paramount that G.I. Joe only managed an unimpressive $120 million domestically, while grossing an additional $250 million overseas?  What do you think?

Between the actual flops, many of which eventually break even thanks to international receipts, and the perceived hits that cash in overseas, it’s no wonder the public has come to believe that Hollywood is in real trouble.  Lynda Obst all but wrote an obituary. Even Spielberg and Lucas are predicting that the major studios are “imploding.”  And, let’s face it, audiences don’t like feeling taken advantage of.  No one begrudges the studios for trying to make a buck, as long as their ultimate goal remains the development and distribution of quality entertainment.

At the risk of stating the obvious, studios no longer operate under that playbook anymore, but can you blame them?  It would be one thing if Man of Steel got bad reviews and no one went to see it, but it’s the second highest grossing film of the year!  Oz The Great and Powerful got even worse reviews, and audiences still turned out.  Yet another Fast & Furious movie once again scored at home, and we all know about the monster business that series enjoys internationally.  Speaking of monsters, Monsters University isn’t going to win any awards, but it sure is popular with kids (my eight-year old loved it).  The Great Gatsby divided critics, but grossed over $300 million anyway, thanks in large part to its popularity overseas.  Identity Thief was one of the worst reviewed movies of the year, but out-grossed The Hangover Part III domestically.  Now You See Me, 42, and Olympus Has Fallen defied the odds and have been dubbed hits by simply exceeding the modest expectations placed on them.

When a mainstream studio release turns out to be legitimately entertaining, such as Iron Man 3, The Croods, This is the End, The Heat, or World War Z, audiences are often caught off guard.  Amid protestations of disappointment that other, less worthy titles have been finding success despite their shortcomings, the films that are actually most deserving of their profits are approached by the culture at large with the same degree of skepticism with which we treat the rest of the movie business.  The stink from one picture is transferred onto another.  Audiences who felt manipulated by Man of Steel extend their cynicism to World War Z, which turns out to be a fast-paced nail-biter in the style of the original Bourne movies.  This doesn’t necessarily translate into lower box office returns for World War Z, just a general sense that all blockbusters are terrible.  If The Lone Ranger is as bad as everyone is saying it is (and Mike Ryan at Huff Post seems to have put his finger on what is specifically wrong with it), and if Pacific Rim is a dud — along with Grown Ups 2, R.I.P.D., Red 2, The Wolverine, 2 Guns, Percy Jackson: Sea of Monsters, and The Mortal Instruments: City of Bones — but those titles still manage to break even or turn a profit at the box office, the cumulative effect of all this unending mediocrity will be increased cynicism about the crassness of every studio release.

The problem with this response is that there are other movies in the mix this summer as well.  The Way, Way Back, Fruitvale Station, and The Spectacular Now are vying for indie cred.  The Conjuring is getting terrific buzz.  Woody Allen’s latest, Blue Jasmine, looks promising (if worrisomely un-comedic).  Elysium, Neill Blomkamp’s ambitious follow-up to District 9, could really get caught in the crossfire of blockbuster fatigue.  If there is only one legitimately entertaining summer release for every three of four bad ones, it will become increasingly difficult for audiences to tell the quality apart from the crap.  And if the overseas box office bonanza can turn just about any heavily-marketed release into a winner, can you blame audiences for feeling frustrated?

What’s a movie fan supposed to do?  I saw Before Midnight, and loved it — but should I delude myself into thinking this third collaboration between Linklater, Delpy, and Hawke is enjoying any cultural relevance whatsoever?  Should I pretend that movies such as Mud and Before Midnight are the only “true” American motion pictures, while everything else that comes out week after week is not even a part of the conversation?

Perhaps the sanest approach would be to hold out for the hotly anticipated fall releases, such as the new Coen Brothers and Scorcese pictures that everyone is salivating over.  Is that the trick, to step away from movies altogether for the first nine months of the year, only to return as the awards season heats up?  That might be the only remaining coping mechanism: treat movies as you would a season of your favorite professional sport.  Each September, at about the same time the NFL regular season is about to begin, the Toronto International Film Festival kicks off the awards season, establishing the front-runners for Best Picture.  The regular season — for both the NFL and any film contending for Oscars, ends after the holidays, with playoffs beginning in January.  By February, a winner is crowned and the season is over.

Not only may this be the most effective way for discerning movie fans to adapt to a seemingly permanent change in distribution patterns, but it may be in the best interests of the studios themselves to stick with this model.   They’ve determined that by the time October rolls around, you’ll be in the mood for better movies.  It’s a feature of the current state of film scheduling, not a bug.  Studios are counting on you being so sufficiently pissed off about all the garbage you’ve waded through in the first tens months of the year that you’ll need to watch a better movie.  And by the time the abbreviated awards season wraps up, these same studios have already programmed next year’s schedule around an inverse assumption: they’re counting on us feeling over-saturated by good movies!  “Boy, am I sick and tired of all those great films by Alexander Payne,  David O. Russell, The Coen Brothers, and Martin Scorsese,” they’re hoping we’ll be thinking by around March of next year.  Bring on the blockbusters!

2 responses to “It Just Doesn’t Matter

  1. Well the movies you listed as not getting enough talk about their successes are busts. Star Trek Into Darkness is not an overwhelming success by any stretch. A movie that costs 200 million making 450 worldwide isn’t going to make the studio the kind of money it needs. Oblivion is a straight up failure B.O wise. 285 on a 200 million dollar budget? Nope. White House Down and After Earth both heading to the flop bin as well. This is problematic for studios that put most of their eggs in the blockbuster basket and when those fail to deliver it puts the studios in very precarious positions financially. Until they figure out how to monetize their product in this digital era we will be slaves to International tastes (Damn China for their love of 3D).

    I don’t exactly understand your argument or stance though. I don’t know what you want them to do.

    • Thanks for your comment! I think we’re almost saying the same thing. You’re right that Star Trek isn’t a huge success for Paramount, but it’s still profitable. Oblivion only cost about $120 million (http://www.boxofficemojo.com/movies/?id=oblivion.htm), so it too ended up doing okay. Not every movie can be The Avengers, and the studios can live with net profits in the tens of millions, especially since they can still make money later on from VOD/disk sales/cable. I think my point is that foreign B.O. revenue is making up for any losses they may accrue from the movies that bomb in the short term, and so their summer blockbuster strategy will continue unabated.

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