Last summer’s flops headed to 200 million tent pole; Movie companies worry that films in China could trigger conflicting issues; Last summer’s blockbusters increases movie going expansion

 

Welcome to the summer movie recap edition of Gene Scallop’s entertainment report. Here’s what’s topping today.

 

With Fall sweeps underway, we go back to our summer movie recap to digest what’s happened before Labor Day weekend. In all, 11 films, made the top 10 in the box office and 8 them have flopped. As a result these box office losers could head into a big tent pole. Should these films come up with alternate strategies come next summer Danny?

 

Danny Angelfish (via The Hollywood Reporter)- Call it the summer of the redwood forest — too many giants planted closely together. The result? Very little sunlight in between. Now, after a season of major would-be franchises falling short — including Disney’s The Lone Ranger, Universal’s R.I.P.D. and Sony’s After Earth and White House Down — several industry players say the studios are debating whether to alter their summer strategies.

A source at Warner Bros., for example, says a topic at the studio’s annual review meetings is “a sense of budgets creeping up.” And producer Joe Roth says in his dealings with the studios, he is encountering new attempts to tighten coffers. “A year ago it was, ‘You can do it for $150 million, right?’ Today it’s, ‘You can do it for $125 million, right?’ [Everyone is] trying to get it down about 20 percent,” he says.

Although the full impact of the summer is not yet clear, a leading talent representative says a trend has emerged: When it comes to launching franchises, studios will pull back on spending.

“There’s an Iron Man template,” he says. “That initial budget [for the first film] was not crazy-crazy.” (The 2008 original was made for about $140 million.) As for sequels, he adds, studios will sharpen their focus on movies that merit big spends and look to save on those that don’t.

For example, though Thomas Tull’s Legendary Entertainment is committed to tentpoles, the company might have taken a hard lesson from Guillermo del Toro’s Pacific Rim. Legendary, which covered 75 percent of the film’s $200 million budget, struggled to crack $100 million domestic without major stars or recognizable branding. In the future, lacking such elements, says a knowledgeable source, Legendary likely would cap the budget at $175 million. Still, the film recovered enough from its poor bow July 12 to cross $400 million worldwide, including $110 million in China. A sequel is not out of the question, albeit at a downsized budget.

Similarly, Paramount is developing a sequel to the Brad Pitt zombie pic World War Z but hopes to hold costs to about $160 million. The original has grossed more than $532 million worldwide, but given its price tag of $250 million or more, it is hardly a profit engine.

Paramount also will look to save money on another Star Trek — a franchise, but not quite in the top tier. This summer’s $190 million production Star Trek Into Darkness has earned over $462 million worldwide; its international haul has exceeded expectations at $234 million, but domestically, its $228.5 million hasn’t matched the first film. Whereas the first two were shot in L.A., the next will be filmed in a more tax-friendly location. “We’re making it for what it should have been shot for last time if we had made it outside of L.A., which we would have done except that [director J.J. Abrams] didn’t want to,” says a studio source. “That was a $20 million issue.” (Abrams, busy with Star Wars, is unavailable for the third Trek.)

Also looking to save money, Warner’s will shoot its Superman/Batman pic in Michigan and reap $35 million in incentives. Man of Steel shot in Chicago, California and Vancouver and did not score comparable rebates. The movie has grossed about $657 million worldwide, but like other ventures this summer, its $225 million cost has hampered profitability.

Walt Disney Studios chairman Alan Horn acknowledges that the industry’s hard summer has led to “introspection and postpartum discussion.” But he says his company won’t make policy changes despite a potential $190 million loss imposed by Gore Verbinski’s $250 million Lone Ranger.

“We always look at everything,” says Horn, whose tenure began after Lone Ranger was greenlighted. “It’s ongoing and not particularly affected by whatever succeeds or fails in the marketplace. We do our best to do everything efficiently, [but] we’re not saying because of these failures, we’re taking $15 million out of the next three pictures or anything like that. I would say we are looking, as we always look, at every film from beginning to end.”

Horn declines to address Disney’s Pirates of the Caribbean 5, which has not yet been greenlighted. The studio took steps before this summer to control costs by hiring directors Joachim Ronning and Espen Sandberg, who made the adventure film Kon-Tiki on the water for only $15 million. And certainly Disney will look for major deal concessions from star Johnny Depp and producer Jerry Bruckheimer.

But even though negotiations with Bruckheimer will be fierce given friction over Lone Ranger, the all-but-certain outcome is that a deal will be reached — probably with more generous terms than Disney would like. If franchises are split into two groups — the greater and lesser — then Pirates is in the first tier, with the most recent installment grossing more than $1 billion worldwide in 2011. (A report that Bruckheimer will lose final cut is false. He long has had that power on his Disney films but never has exercised it. On Lone Ranger, he and Verbinski lost final cut because of budget overruns, but Disney did not impose its will despite wanting to trim the film.)

Tightening budgets might help studios hedge their bets, but given an already full pipeline, another problem this summer — overcrowding — won’t be addressed for some time. “The summer season now starts in early May, and I think we have seen audience fatigue set in come July and August,” says Sony’s Doug Belgrad, whose late-summer The Smurfs 2 and Elysium have underperformed. (This Is the End and Grown Ups 2 have turned a profit.) “It requires us to be thoughtful about when we release our films.”

Budgets and competition are major challenges, but observers say the biggest issue is quality.

“This summer proved that scale and spectacle alone won’t suffice,” says Fox film chief Jim Gianopulos, who has committed to spending $150 million on next summer’s biblical epic Exodus, from Ridley Scott, and nearly $200 million on X-Men: Days of Future Past. “Movies need originality and compelling stories and characters. Pure tonnage of effects is not going to cut it.”

 

Some of our summer hits with dominated the box office have made China proud… except for the minions. With this resolved weeks later, movie companies are worried that the next summer blockbuster could be shown the door again. What’s wrong with the Chinese box office Johnny?

 

Johnny Trout (via The Hollywood Reporter)- For Hollywood animators, China’s booming box office is a major draw, but there are regulatory issues to contend with and cultural prejudices to be overcome, U.S. animation executives told a panel at Beijing Screenings.

While China’s animation industry is technologically advanced, domestic producers are struggling to compete with slick overseas films, and there are regular bouts of soul-searching about why domestically produced animation has such difficulty competing.

In 2012, 32 animated features had theatrical releases in China, generating box-office revenues of more than $220 million (1.35 billion Yuan). Twenty of those films, accounting for $65 million worth of revenue, were domestically produced. In all, animated movies accounted for around 8 percent of China’s box-office revenues last year.

Last month saw the release of two big animated movies, I Love Wolffy 2, part of the successful Chinese franchise, and Pleasant Goat and Big Big Wolf, which took in nearly $7 million in its first week.

However, other domestically produced animation hopefuls have failed to shine. There were high hopes for the 3D animated film Kunta, which had very high production values and used state-of-the-art cloud computing technology, but it took in just over $1 million dollars in the same week.

At an industry panel at the annual four-day showcase of movies made inside China’s state-run studio system, Jo Yan, The Walt Disney Co.’s senior VP studio distribution for greater China, said the prospect of China becoming the world’s No. 1 film market was a “very exciting trend.”

However, he said that the celebrity effect was missing from animation in China, making it difficult to promote animated films.

This, combined with the fact that there can be as few as eight weeks between when importers find out whether their film has been approved and the release date of the film, makes marketing difficult, he said. In the West, studios might have a year in which to sell a concept into a market.

Also working contra animation’s prospects is the prejudices of Chinese audiences, according to Yan. “They think animation is immature and for kids,” he said. Yan also thought that ticket prices, especially for 3D movies, were high relative to the income of the audience.

Joe Aguilar, chief creative officer at DreamWorks’ Asian unit, said his company was working on animated films, TV series and live-action movies.

Oriental DreamWorks has four projects in the works right now, two of which are co-productions and one of which is Kung Fu Panda 3, which will be produced in China in 2016 by Oriental DreamWorks Animation and its local partners — state-owned China Media Capital, Shanghai Media Group and Shanghai Alliance Investment.

Kung Fu Panda is particularly fascinating to the Chinese industry, as it is a Chinese story, told with cultural sensitivity and charm by Hollywood, achieving something that local studios seem unable to replicate.

Aguilar said that the Chinese animation business needed to learn that creativity is very important, and that every single person working on the project was important, not just the writer, producer and director.

“We want to introduce a lot of these kinds of concepts into this community,” said Aguilar. DreamWorks plans to release its first original Chinese-language film in 2017.

Other panelists included Sun Lijun, director of the animation school of the Beijing Film Academy; Qian Jianping, director of the Shanghai Animation Studio; Samuel Choy, general manager of Bliss Concepts in Hong Kong; and Mandy Lau, chief operating officer of Guangdong Creative Power Entertaining.

 

During our summer coverage, animated movies have pulled in with the best records this season. Movie goers were destined to expand audience reaction. Did it work this week Angie?

 

Angie Angelfish (via New York Times Entertainment)- Here in Hollywood, the land of false-front movie sets and business-has-never-been-better studio spin doctors, summer ticket sales are being summed up with a single word: blockbuster.

Ticket revenue in North America for the period between the first weekend in May and Labor Day totaled $4.71 billion, a 10.2 percent increase over the same period last year, according to analyst projections. Attendance rose 6.6 percent, to about 573 million. Higher ticket prices contributed to the rest of the growth.

But behind that rosy picture lurk some darker realities.

Ticket sales rose in part because Hollywood crammed an unusually large number of big-budget movies into the summer, a period that typically accounts for 40 percent of box office revenue. Studios released 23 films that cost $75 million and up (sometimes way up), 53 percent more than in the same period last year.

The audience fragmented as a result, leaving films like “The Wolverine” and “The Hangover Part III” wobbling when they should have been slam dunks.

“Turbo” the animated snail was squished, taking in $80 million at North American theaters — one of the smallest totals in DreamWorks Animation history. (Only the unfortunately titled “Flushed Away” from 2006 did worse.)

“We’re very pleased with the overall strength of the summer,” said John Fithian, president of the National Association of Theater Owners, “but there was almost too much product. Some of these individual movies would have made more money if studios had spread them out a little more.”

Mr. Fithian noted that the $4.71 billion in total summer ticket sales represents a new high-water mark for the industry, not accounting for inflation, and the growth comes after several years of largely flat sales or declines.

It is not surprising that more films sold more overall tickets, but the total does demonstrate a resilience for cinema as competition for consumer attention continues to spike.

“To keep the exhibition business alive, we have to give people a darn good reason to put down all their electronics and get in their cars and get into theaters, and this summer we did it,” said Nikki Rocco, president of distribution at Universal Pictures, which printed money with “Despicable Me 2” and “Fast & Furious 6,” both of which took in roughly $800 million worldwide.

Still, appearances can be deceiving. “Pacific Rim,” for instance, has taken in more than $400 million worldwide — no small feat. The picture’s price tag, however, made it an everyone-or-nothing enterprise. Legendary Entertainment and Warner Brothers spent about $330 million to make and market the film, which could end its run in the red since theater owners take roughly 50 percent of ticket revenue.

With the notable exception of Paramount, which released just two films, “Star Trek Into Darkness” and the surprisingly successful “World War Z,” every studio suffered at least one major dud. In many cases, big hits were offset by big flops.

Disney, for instance, had the summer’s No. 1 movie in “Iron Man 3,” which took in $408.6 million in North America, for a global total of $1.2 billion. Disney’s Pixar also scored with “Monsters University,” a prequel that generated more than $700 million in global ticket sales.

But Disney also had the summer’s No. 1 box office bomb: “The Lone Ranger,” which cost at least $375 million to make and market, and has taken in about $232 million worldwide. After theater owners take their cut, Disney is looking at a write-down of $160 million to $190 million on the film.

Higher-priced 3-D tickets took another tumble, at least in the United States and Canada, as more consumers decided the visual gimmick was not worth paying a $2 to $5 premium per ticket. Family films fared the worst — those glasses don’t fit little faces very well — with “Turbo” setting a new industry low for the format, according to analysts: 3-D screenings accounted for only 25 percent of its opening-weekend results. (Last summer’s low was 35 percent.)

Over the weekend, the 3-D concert documentary “One Direction: This Is Us” took in $17 million at domestic theaters, enough for first place, according to Hollywood.com, which compiles box office data. Sony, which has had a particularly rough summer, spent $10 million to make the film. A Sony spokesman on Saturday wrote in an e-mail, “We are off to a fantastic start!”

“Instructions Not Included,” a Spanish-language comedy from Pantelion and Lionsgate, came out of nowhere over the weekend to take in $7.5 million at only 347 locations, an indication of the growing power of Hispanic moviegoers. “Getaway,” the only other new release of note, drove into a ditch, taking in just $4.5 million. The thriller, which was released by Warner, cost about $18 million to make and stars Ethan Hawke and Selena Gomez. It was the worst-reviewed wide-release film of the summer, according to the review-aggregation site RottenTomatoes.com.

As usual, Hollywood paraded out a cavalcade of stars over the warm-weather months; as usual, only a very few emerged with their star power undiminished.

Brad Pitt pulled off “World War Z,” which took in more than $527 million worldwide and proved that studios can surmount negative advance chatter if they work hard enough. Sandra Bullock and Melissa McCarthy had the No. 1 comedy with “The Heat,” which took in $210 million worldwide for 20th Century Fox — not quite “Bridesmaids” money, but not chump change, either.

At the same time, Will Smith, Johnny Depp, Ryan Reynolds, Owen Wilson, Vince Vaughn, Jamie Foxx, Channing Tatum and Matt Damon, among others, failed to turn out ticket buyers, at least to the degree that studios needed. In particular, a box office era ended when Mr. Smith’s “After Earth,” which cost Sony $135 million to produce and roughly $100 million to market worldwide, opened to $27.5 million in ticket sales, by far the worst summer showing of the once-infallible actor’s career. Its global sales were $244 million.

Movie companies continued to make most of their profits with sequels; eight of this summer’s top 12 films came from continuing franchises. And at least one major new series was born in “Man of Steel.” Warner has already announced casting for a sequel to that movie, which returned Superman to theaters and took in more than $290 million in North America, for a global total of about $650 million.

But audiences also revolted against more of the same, especially if quality came up short. “The Smurfs 2,” “Kick-Ass 2,” “Red 2,” “The Hangover Part III” and “Percy Jackson: Sea of Monsters” all struggled and all received largely negative reviews.

In many ways, the summer belonged to smaller original movies, at least when it came to turning out larger-than-expected audiences.

Lionsgate’s “Now You See Me,” an old-fashioned midrange thriller, took in almost $300 million worldwide; it cost about $75 million to make. “This Is the End,” an R-rated apocalypse comedy from Sony, cost an estimated $32 million to produce and took in $114 million. With a budget of just $3 million, “The Purge,” a thriller starring Mr. Hawke, sold about $85 million in tickets for Universal.

And “The Conjuring,” a horror movie that cost New Line Cinema about $20 million to make, is closing in on ticket sales of $240 million worldwide.

“Films from other genres did exceptionally well this summer, proving that counterprogramming can work,” wrote Doug Creutz, an analyst at Cowen and Company, in a research note released on Thursday.

Still, Mr. Creutz did not seem to hold out much hope that Hollywood paid attention. “Looking ahead to next summer,” he wrote, “it already appears as if we are likely to have another sizable batch of money-losing blockbusters.”

 

Checking the Penguins tally, 369 fans sign in as Team Skipper’s for a possible 4th season continue. Meanwhile, the team awaits for very important news for the month.

 

We got the list for September as today’s summer blockbusters cool off after a scorching summer movie season. Feel free to look at it to buy this month:

 

9/3/2013
 
Arthur Newman
Now You See Me
Blancanieves
From Up on Poppy Hill
Petunia
Top Cat: The Movie
I Do
Évocateur: The Morton Downey Jr. Movie

 
9/10/2013
 
The Black Waters of Echo’s Pond
Peeples
Star Trek Into Darkness
Hammer of the Gods
We Steal Secrets: The Story of WikiLeaks
Frankenstein’s Army
Love Is All You Need
Wish You Were Here
Blood

9/17/2013
 
Java Heat
The East
Simon Killer
The War of the Buttons
Gimme the Loot
World War Z
Disconnect
The We and the I
The Bling Ring
In the Fog
Greetings From Tim Buckley
Somebody Up There Likes Me
And Now a Word From Our Sponsor
You Don’t Need Feet to Dance
Augustine
Scenic Route
Bless Me, Ultima
A Fierce Green Fire
1st Night
Drift

9/24/2013
 
Something in the Air
Iron Man 3
Unfinished Song
Redemption
Savannah
He’s Way More Famous Than You
V/H/S/2
My Brother the Devil
The Kings of Summer
Fill the Void
Room 237

We start our Fall coverage as your favorite shows make their triumphant return with new surprises and changes ahead. Don’t worry folks, once we start to cool down, you’ll be relieved after our big scorcher. We’ll give you this month’s news in our next edition. See you later!

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