The Summer Movie Season gets going

The summer movie season in the US used to start on the Memorial Day holiday, and the box office statistics used by the major studios until recently reflected this fact. However, ever since Twister was a big hit when released two weeks before Memorial Day in 1996, the studios have started rolling out their big summer movies starting from two weeks before Memorial Day. A couple of years ago, the box office statistics compiled by AC Nielsen EDI were adjusted to reflect this fact.

However, this year the first big summer movie was released three weeks before Memorial Day. (This may be a one off thing. Memorial Day is late in the month this year. Or perhaps the summer movie season is now always going to start three weeks before EDI tweaked the definition of summer again to take this into account. Perhaps in a few years “summer” will be statistically redefined to start in February). That first move was Universal’s Van Helsing. That was now three weeks ago, and we can start to see the first few indications of what the summer would be like.

The story of last summer has been told. Hollywood released lots of sequels, lots of high concept movies based on comic books, old television series, video games and theme parks. With one or two exceptions grosses were down from the summer before. There was lots of speculation as to whether the advent of DVDs meant that people were less likely to go and see movies in the cinema, or whether it just meant the year’s movies weren’t very good. Certainly, though, people were and are watching lots of movies on DVDs, and Hollywood was making unexpectedly immense amounts of money due to this, which sort of made up for the decline in box office revenues. (Of course, when the DVD format was introduced in the first place a few years back, a number of Hollywood studios waited a couple of years before releasing any movies on the new format. Studio people were frightened that the high quality digital nature of the new format meant that releasing films this way would make them more vulnerable to piracy, and they could not see any upside, as obviously all that would happen is that people would rent movies on DVD the way they had on VHS until then, and giving people a high quality digital experience at home would not cause them to rent or buy more movies. Obviously. Hollywood always runs away from new technology like this, and has an amazing inability to see upside in it. But the upside almost always seems to come).

Hollywood went into last summer believing that sequels were going to gross substantially more money than did the original films they were sequels to, but it didn’t happen and they get their noses bloodied a little. It takes two years for the lessons of a bad summer to sink in to Hollywood, but none the less this summer has fewer sequels and the like scheduled than last summer did. The lesson they should probably have learned is that sequels to good films can gross more than sequels to bad films, but the trouble with Hollywood being run by corporate types rather than people who genuinely love movies is that they are sometimes slow to see things like that.

One other thing that has been happening this year is what is often called “day and date” international programming. Traditionally, films were released in the US first, and would be rolled out throughout the rest of the world over a period of months. This is now happening less and less for big movies. Films are being released on the same weekend in most major markets. There are two reasons for this. The first is that Hollywood as always is afraid of piracy. Certainly they are losing some money to pirates. Once upon a time I was frequently offered illicit CD and VCDs and VHS tapes when walking down the streets of Asian cities, but if I wanted them in developed countries they would be harder to find. These days I cannot walk down Oxford Street in London without encountering someone selling illicit DVDs of movies current in the US that have probably not been released in the UK yet. Releasing movies in large swathes of Europe and Asia on the same weekend as in the US certainly reduces the window in which this activity is profitable, and this is the main reason given for the fact that there are now simultaneous worldwide releases.

But in reality this is more of a symptom than the cause. The fact is, the world is rapidly becoming one global media market. Legally the world is divided into countries, and copyright law and other media regulation goes to great trouble to segment the world into separate markets. This has strange consequences sometimes (a customer in France cannot buy a subscription to Rupert Murdoch’s (British) BSkyB satellite television business, even though the signal reaches France, BSkyB has only purchased British rights for the programming it shows and even though the producers of the programming would ultimately receive a share of the revenue, they are not allowed to. Hence also unencrypted satellite television causes legal tangles so complicated that it often just isn’t worth bothering with, even if a broadcaster wants to transmit it). Traditionally movie producers have managed to segment advertising campaigns and everything else into these national markets, but it is working less and less. Publicity campaigns now cross borders at high speed. Teenagers in Australia know by Friday afternoon whether a movie just released in the US is any good. People read reviews from foreign newspapers’ websites. If there is a delay between release in the US and release elsewhere, the media buzz may have died by the time the fim gets there. People on British websites such as this one might be writing for largely American audiences, and it is counterproductive if the movies they are talking about are two months old in American terms. All this means that segmented national releases no longer work. And Hollywood is learning to deal with that. (If simultaneous worldwide releases are going to happen, one of the chief problems is expense and logistics. It costs a lot to strike that many prints of celluloid, and getting them around the world is expensive and time consuming. Thus this trend is also an impetus for digital distribution and projection systems to come into being to facilitate this that is not really there for the domestic market. This is particularly so in rapidly developing countries where there are no large networks of existing conventional cinemas already. And indeed we are seeing this, particularly in China, where quite a large network of digital cinemas has been built in the last couple of years).

In any event, this makes writing about the summer movie season much easier for me, since I can now see most of the movies at the same times the Americans do. Of the first five big summer releases this year, four of them have or will be released in the UK within two days of the release in the US. The exception is an exception for a reason, which I get to in a while.

But on to the movies. The first movie out of the blocks was Van Helsing, which was actually the second movie inside a year that features a number of characters from the genre fiction of various Victorian authors all blended into one story. The first such film was last year’s The League of Extraordinary Gentlemen, in which Alan Moore’s brilliant and delicately conceived graphic novels were turned into a horrendous incoherent mish-mash of special effects. I found that film really offensive due to the way in which the contempt for the audience of the studio and filmmakers (“they won’t understand the literary references anyway”) was allowed to wreck the original material (The graphic novels worked precisely because the audience was literate and educated enough to get the references). Van Helsing was probably just as bad a film as The League of Extraordinary Gentlemen, but I found it less offensive, perhaps because it just went straight to the source material, rather than screwing up a pastiche that somebody else got right. The movie was an absurd mixture of Dracula, Frankenstein, Dr Jekyll and Mr Hyde, British actors doing absurd eastern European accents, James Bond spoofs and lord only knows what else, mixed in with the idea that the supernatural must now have Ridley Scott Alien style ickiness. This movie really sucked, and after three weeks it has limped to $103 million in North America. This is not perceived as especially good, given that the film cost at least $160m to make, but the studios are making so much money from DVDs these days that the film will probably make money. It’s a break even proposition though.

That film was followed this weekend by Wolfgang Peterson’s Troy, which has managed a slightly better but similarly middling $93 million after two weeks. Historical Greek and Roman epics were once a mainstay of Hollywood, but they fell into obscurity when casts that large became too expensive. Special effects have made them at least somewhat affordable again, and after the success of Gladiator three or four years ago it was inevitable we would see a couple more. We have now had Troy and an assortment of Alexander the Great movies are in production, so things will go on for a little while yet. (And indeed, we have a new King Arthur adaptation from überproducer Jerry Bruckheimer coming very soon that fits in the genre too – this film appears to be making an effort to be as historically accurate as possible, and is set in around 500AD when Britain was clearly Roman-Celtic in culture, whereas many adaptations of the story have been given quasi-medieval settings).

To be honest I rather enjoyed Troy. The screenplay was a bit of a mess and it was a bit hard to tell who was the hero, Homer was messed with a bit too much and the events of ten years seemingly went by in a couple of weeks, but I enjoyed the spectacle. And hey, it had Peter O’Toole in it. Yes, I should probably just go and watch Lawrence of Arabia one more time, but they don’t make actors like that any more. (On the other hand, how do you cast the part of Helen of Troy without disappointing the audience?). Warner Bros are admitting to a $150m budget for this film, but it is rumoured to be much higher. I have heard $250m mentioned, and although I don’t think I believe this that would make it the most expensive film of all time, in nominal dollars at least. On that budget the gross so far is quite disappointing, although the DVD factor again comes into play and the film will make money in the end. Once again not a huge return on the investment, but not a train wreck either

And that was where we were a week ago. The summer had started in a rather lackluster fashion. Rather worse than last year in fact, when the summer started really well with the X-Men sequel. Perhaps it was true that people were about to stop going to the cinema, and the days of DVD and other home viewing in preference to cinema were upon us.

Still, however, there was one more week before Memorial Day. The film scheduled for that weekend was Dreamworks’ Shrek 2, the sequel to the hugely successful animated film of 2001. This was a Wednesday release last week.

It is usual for films in the US to be released on a Friday. This is surprisingly non-uniform across the world. In my native Australia new films are released on Thursdays, and in France they are released on Wednesdays. In Japan they are released on Saturdays. These differences have never been a problem in the past, but it causes occasional problems now that Hollywood is releasing more and more films on the same weekend throughout the world, as it sometimes means (for instance) that the French release would thus be two days before the American release.

However, it has become common in recent years for films expected to do very big business to be released earlier in the week, usually but not always on a Wednesday. That way there can be more tickets sold before the first Sunday (when the first widely publicised box office numbers are published), the studios can go into the first weekend promoting box office records broken on the Wednesday (if that indeed happened) and entertainment news programs can show people in long queues waiting for tickets a couple of days before the main release. (Also, if means that the French and Australian and other releases can go out on their normal days and not pre-empt the American release). And if the film is genuinely good, positive word of mouth can boost Friday to Sunday grosses.

In any event, Dreamworks released Shrek 2 this way last week. The film went out on Wednesday, and grossed $11.8 millon on Wednesday and $9.2 million on Thursday. For a heavily promoted Wednesday release that is good but not great. Dreamworks could only talk about relatively feeble box office records like “Biggest opening day gross by an animated movie opening on a Wednesday”. Expectations (including mine) were that the film would gross about $65m over the weekend – “weekend” in Hollywood speak meaning Friday to Sunday.

And what happened? Well, everybody was surprised when the film’s grosses went completely off the charts on the weekend. It grossed $28.4 million on Friday, an estimated $44.8 million on Saturday, and a projected $31.1 million on Sunday. Box office results released on Sunday evening don’t have any actual Sunday data, but feature a projected Sunday gross based on how previous films with similar box office patterns on Friday and Saturday have done. They are particularly uncertain for films with unusual grossing patterns, and for films with especially high grosses, due to the fact that there are relatively few films with high grosses, and because a 5% margin of error is obviously a larger number of actual dollars if the gross is $50m than if it is $10m. (They are also uncertain if other unusual events happen on Sunday, from the Superbowl to bad weather to a big news story breaking). If a film has particularly good word of mouth, then the actual Sunday gross released on Monday will often turn out to be better than the projection released on Sunday. This is often a good sign that a film is going to be a big hit by the time its theatrical run has finished. And this indeed happened. The actual data released on Monday showed the Sunday number revised upwards from $31.1 million to $34.9 million, which is a stunning result.

So why did the film do so well over the weekend, when it looked like it would not do so during the week? One possibility is simply that word of mouth was extremely good. (Reviews were good but not spectacular, on the other hand. Personally I did not really care for the original film’s not very funny Michael Eisner jokes and advance word on this one suggested that it was more of the same). Another is that anticipation was very high, but Dreamworks did a bad job of promoting the fact that the film opened on a Wednesday. Another is that the “animated film” record did mean something, and that parents waited until the weekend before taking their children to see the film. (However, the film did not skew towards family audiences to the extent that some might expect – apparently over the weekend about 60% of the audience was in groups that included children, whereas 80% is more typical for animated films on their first weekend). I can’t say just yet. I haven’t seem the film. Animated films are one genre that Hollywood is not applying the “day and date” mantra to yet, as they tend to release them during school holidays. (Possibly also they are less concerned with children or parents buying pirated DVDs than they are for young single adults).

In any event, the $108 million that Shrek 2 grossed over the weekend is the second largest three day gross of any film, and only the second time a film has grossed over $100m over a weekend. (The first time was Spiderman‘s $114.8 million two years ago).

Shrek 2 now stands a real chance of being the highest grossing film of the summer. This would actually be the second year in succession that an animated film had been the highest grossing film of the summer (after Finding Nemo last year). It would also be only the second time ever that an animated film was the highest grossing film of the summer (although The Lion King‘s grosses would have made it the highest grossing summer film of almost any year of the 1990s other than the year in which it was released (1994), when it grossed very slightly less than Forrest Gump). Shrek 2 is clearly going to gross at least $300m, substantially more than the original. (Finding Nemo‘s record gross for an animated film of $339.7 m is clearly vulnerable, and $400m is a possibility. Animated films traditionally last at the box office longer than live action films, due to the fact that parents are less likely to feel as concerned with taking their children to see a film on the opening night than are teens and twentysomethings, and due to the fact that children are much more likely than adults to want to see a film more than once. And of course, back in the days of VHS, animated films were a gold mine for Disney especially due to the fact that this was the only segment where VHS tapes were bought rather than rented (as children like to watch the same thing more than once….). This is still true, and animated films still sell stunningly well (although now mostly on DVD). (Possibly the most interesting trend of recent years in Hollywood economics is that most other classes of films have switched from rental to sell through being dominant with the switch from VHS to DVDs, and Hollywood’s revenues have risen accordingly).

Given that Shrek 2 had a budget ($70m) that was probably about a third of that of Troy this is going to be one of the most profitable films in living memory.

So what, if anything can we draw from this? There has been lots of discussion lately as to whether the rise of DVDs and the drop in cinema admissions in 2003 were related. Or was it just that the movies weren’t very good? At this point in the summer, we don’t have much in the way of definite answers. We have two not very good action films, both or which have done only so-so at the box office. And we have one huge box office hit, but an animated movie. After the success of Finding Nemo and now Shrek 2, one theory is that box office is indeed in decline, but that this does not apply to animated films.(Perhaps the late teen early twenties audience of action films has gone away, but the younger (and parent) audiences of animated film have not. The demographics of the Finding Nemo or Shrek 2 audiences doesn’t really support this theory though, as it includes the teens and twentysomethings as well as the other demographics). Or it could be just that there have been a couple of exceptionally good animated films released lately, and other films have been less good.

As it happens, we should have a better picture within about ten days. There are two more big summer releases between now and then. Tomorrow we get The Day After Tomorrow, Roland Emmerich’s utterly absurd “Global Warming is going to flood most of the United States, and then an Ice Age will start, and all by next Wednesday” disaster movie. However, the film is saiid to be spectacular looking. I actually rather like disaster movies, and I think this may be one of my guilty pleasures of the summer. In any event, it has the exact sort of trailer and publicity campaign that appeals to the late teen male demographic that has been missing later. If this film is a big hit, we can pretty much say that audiences are not departing the cinema in a big way, at least not yet. If it is not, well things are harder to figure out. We can just contine concluding that action films haven’t been very good lately, and can continue waiting for a better one, which might be Sam Raini’s Spiderman sequel over the fourth of July weekend, or perhaps the aforementioned King Arthur a week later, or perhaps the amazing looking Sky Captain and the World of Tomorrow will finally turn Jude Law into the huge star he has looked like he might become for some time. Or perhaps some other film will be a more unexpected big hit. (If Pixar’s The Incredibles over Thanksgiving is the other big hit of the year and the live action relatively fails, then the “animation exception” theory would be picking up more evidence).

My gut feeling is that The Day After Tomorrow will be a big hit – certainly bigger than Van Helsing and Troy but not as big as Emmerich’s previous Independence Day. The jury will to some extent still be out.

However, there will be a very big hit the week after. Perhaps the biggest thing that the exhibition industry (ie cinema owners) complained about last year was that there was no Harry Potter movie, for the previous two years the end of the year had featured huge numbers of younger filmgoers coming to see the previous two movies, and spending large amounts of money on drinks, popcorm, and merchandising. The third film was delayed six months due to the production schedule being a bit too tight, and it is finally to be released next week. Director Chris Columbus, who made the first two films, either stood or was pushed aside for the third, and Mexican director Alfonso Cuaron directed the third film. Columbus is basically a hack. He is a competent director who was never going to screw up, but he made rather obvious, very literal films of the first two books. (The second grossed somewhat less than the first, possibly because the audiences had seen everything the first time). Cuaron is a much finer film-maker, probably most famous for Y Tu Mama Tambien, although it was probably his superb (but not greatly watched) 1995 adaptation of A Little Princess that got him the job. (There are certain qualities in his interesting but not entirely successful modern day version of Great Expectations (1998) that may have suggested he was right for the job, too). In any event, all evidence is that he as done a fantastic job of adapting Harry Potter and the Prisoner of Azkaban. Advance word is that the film is just great, and I expect it will be a huge hit, probably bigger than either of the first two Harry Potter films. Just the same, this film also skews younger than your typical action movie, and its success still won’t tell us if those late teens and early twenties males are still going to the movies.

So what does this mean? Well, it means that in two weeks time the film studios and the cinema owners are likely to be happy, and Variety will be full of articles saying that we are headed for a record summer. That doesn’t necessary mean we are going to have a record summer as the demographics of the successful films will not have been those of the general filmgoing audience. And in any event, Hollywood almost always does badly in Olympic years. Once the games start, audiences drop considerably. It didn’t really happen in 2000 because the Olympics were later in the year as they were in the southern hemisphere, but it did in 1996 and 1992. And it likely will this year. And in addition, European grosses are also likely to be dampened by the European football championships, which are starting soon. (Ideally, the film studios would prefer the Olympics to be called off because the stadium isn’t finished, and for England, Germany, France, Italy and Spain to be eliminated from the football in the first round).

So, inevitably, Hollywood will have found something to complain about by September. It always does.