What’s Going On at the Box Office?

More and more, I’m less interested in movies. But I don’t think that my choices are causing a Hollywood apocalypse.

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More and more, I’m less interested in big budget movies. There’s nothing playing in the theaters that’s motivating me to risk a buttered popcorn spill in the dark. So I’m watching television reruns and older movies when I stream. Nothing is new. Or, instead, I read books.

But I don’t think that my choices are causing a Hollywood apocalypse. YouTube channels seem to think so and there’s lot of speculation about lackluster box office ticket sales. The channels seem to equate box office sales with complete movie success or failure. I have my own opinion about what may be going on.

Now, if you’ll stick with me, I’ll explain. Let’s back this up a bit and start with movie budgets.

Big Budget Movies

Big budget movies are big budget movies for a reason–the announced movie budget is a marketing tool. The bigger the announced budget, the more you and I perceive the movie to be of greater value. If I’m told that a movie cost 300 million to make, I may be willing to part with $12 for a seat. Or buy the DVD. Or pay extra to stream it. Lately, this hasn’t impressed me.

The reality is, a movie probably only costs about half of the announced budget. The real costs are what movie producers call, “negative costs.” Before a movie shoot actually begins, the producer and executive producer are scrambling to raise cash to cover the estimated negative cost. And part of this cash scramble means going to other revenue streams that are not box office. (Remember, this movie hasn’t even been through 3+ weeks of shoot time.)

Now that we know a little bit about negative costs, a big budget movie still isn’t exactly cheap to make. So how does a producer cover the costs to make the movie?

Distribution Channels Play a Key Role

To make a big budge movie, a producer needs distribution channels (a.k.a revenue streams.)  I’m using the word, “distribution,” loosely. Think of them as streaming services, DVD manufacturing, cable television and so on. I’m sure that banks would also be a source of funding. This would be a type of gap funding for shortfalls.

Whether you agree with all of this or not, movies are entertainment. And entertainment is a business. And producers and executive producers are constantly scrambling to raise cash so as to eventually get the movie finished and see a return.

This brings me back to the point.

The big budget frontend deals probably mean offering exclusivities to distributors for some length of time. Producers hope to eventually receive some revenue from those sources. But it probably won’t be box office ticket sales. They are grossed–split with theater owners. And any earned ticket sales may only be enough to pay back an upfront print-and-advertising budget from a distributor.

So unless there’s a box office smash hit, most box office sales really aren’t where the money is at, anyway.

Searching for Other Sources

For at least a decade, Hollywood has considered the US market to be saturated. The US revenue-earning channels, such as streaming, may not be enough for one reason or another. So more and more, international movie sales and distribution look attractive to producers and studios. These other markets may now account for 50% or more of additional incoming revenue.

That’s a big number and it has a big impact on the types of movies produced. I’ve noticed that big budget movies have become more visual, focusing on super heroes and other themes that promise spectacle. And there’s a reason for that–English language nuance may not translate well in the international markets.

So does all of this mean a decline in domestic movie sales? Well, I can’t say that I really know. But for my part, the focus on spectacle and visuals in movies has fatigued me. I’m watching less and reading more. But I don’t think that my interests have impacted the market.

To tell the truth, I’ve grown tired of super heroes. For two decades, these type of movies have seemingly hit the screen nonstop. For a while, it was great fun. But I’m now expecting more from my entertainment. I would like some nuance and depth. I’m turning away from the screen. And if that means reading books in the English language, so be it. And I’ll certainly read something translated to English, as well. I just need to find a story that appeals to me.

But I don’t think that the YouTube channels have it right about movies and box office sales. And with so many of them out there saying the same thing on the internet. that type of entertainment is becoming fatiguing as well. 

So what could be entertaining? Like the movie producers, I have options too.

I’ve got an older technology that works great. It won’t strain your hand to lift it. I can choose to put this device into a wide assortment of reads. It’s called a bookmark.

And with a cup of coffee, I can be entertained for hours. And I never get tired of reading books.

-Michael Duda

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