Food For Thought: Excellent Hollywood Reporter Article On How To Turn Hollywood’s Slump Around

There’s not a lot of commentary I need to make here other than to say that point #4 ought to be point #1. At least someone figured out it needed to be addressed :)

Resolutions to make ’06 happy year for Hollywood
The Hollywood Reporter
By Martin A. Grove
January 06, 2006

Recommended resolutions: After a year like 2005, Hollywood needs to make some New Year’s resolutions aimed at avoiding the mistakes that generated last year’s boxoffice tailspin.

Like all good resolutions, these will be hard to swallow, but Hollywood would benefit enormously from signing on to them. Here, in no particular order, are 10 resolutions Hollywood should give serious thought to making on the marketing, production and distribution fronts. If the major studios were to adopt even half of these, they’d dramatically improve their prospects for a happy and prosperous 2006.

1. Spend more not less on movie marketing. When ticket sales turn soft or the studios’ corporate parents find themselves confronting red ink in other divisions, the bean counters’ automatic response is to start slashing movie marketing budgets. It’s a tempting thing to do because there’s all this money that’s been allocated to be spent but hasn’t actually gone out the door yet. Unfortunately, what this actually does is extend a boxoffice slump — or help create one if the cutback is in response to losses at the studios’ corporate siblings — because it cuts the legs right out from under the films that are in the pipeline at the time.

While there’s no question that film marketing costs are high these days, it’s more than foolish to think you can market movies without spending competitively. In this age in which global media giants own the major studios, losses in one operation spell disaster for all operations. That’s really what the much-touted concept of “synergy” has come to mean to Hollywood. What smart managements should do is recognize that marketing movies properly costs big money in today’s crowded marketplace. With so much product out there year-round, marketers have to shout louder than ever and that means spending appropriately. Spending more may not guarantee success, but spending less is a great way to guarantee failure.

2. Readjust marketing budgets to buy fewer 30-second network TV spots and more non-traditional out-of-home media. Hollywood doesn’t make the most of its marketing budgets these days because it’s still spending the biggest share of that money on 30-second network television spots. It’s certainly no secret that the networks’ audience shares have been declining as the television audience is increasingly fragmented because of competition from cable, satellite, video-on-demand, DVDs and downloads of movies and other entertainment from the Internet.

Why Hollywood insists on plowing most of its marketing resources into network campaigns is difficult to explain. In part, it’s because doing so used to make sense. Ten years ago, the networks were a great place to sell movies. Even five years ago, you could justify spending big to be on network TV with your films. Today, however, it’s not a case I’d want to try to make. Another part of the problem is the close relationship between the movie business and the television networks through the global media giants that own both of those industries.

What studios need to do is cut back on their network TV campaigns, recognizing that not only are the networks not delivering the sizable audiences they once did, but the 30-second spot is no longer the most effective way to sell people on seeing a movie. With movie tickets and the overall moviegoing experience costing more than ever, people are thinking more like consumers when they consider seeing a film. They want to know more about it than a 30-second spot can tell them. People want to decide if the film is going to be worth the $100 or more that they know it’s going to cost them to get to the theater, park, buy tickets, buy concession stand food, go to dinner afterwards and pay the babysitter. The 30-second spot is just not a good way to deliver enough information to convince people that this is a film they’re going to enjoy enough to justify the expense.

The answer is to take a respectable chunk of the money that now gets poured into network TV campaigns and apply it to non-traditional media that reach people when they are out-of-home. Getting the message across to people when they are out and about — such as walking or driving around town talking on their cell phones, riding in elevators, waiting for buses, sitting on trains, flying on airplanes, walking through airports, attending sports events, listening to car radios, etc. — is what Hollywood should do to supplement advertising on the networks and on cable TV. Marketers will claim they’re doing that now. Yes, they are, but the point is they should be doing a lot more non-traditional advertising and making fewer traditional buys because the marketplace has changed.

People are no longer sitting home watching television the way they did a decade ago. They’re just as likely these days to be sitting in front of their computer screens surfing the Internet, which is another medium that Hollywood is using now but not to the extent that it should. Technology continues to move ahead at breathtaking speed and with the growth of broadband connections and the development of full screen high quality video on the Internet Hollywood should also be spending more of its marketing dollars in cyberspace.

3. Abandon the suicidal trend toward sky-high production budgets. As movie production budgets soar beyond the $100 million mark, it becomes increasingly clear that it’s way too dangerous now to bet the farm on the success of an ultra-expensive movie. Looking back at 2005, Hollywood seems to be comfortable with $100 million budgets as the accepted norm and budgets north of $125 million as an OK deviation from the norm. This, of course, is the road to disaster. What Hollywood needs to do is cut production costs rather than marketing costs. Holding the line on what studios are willing to spend for stars and filmmakers is a lot smarter than going into the marketplace to sell those movies with one hand financially tied behind your back.

4. Shift the emphasis from making event films to making entertaining films. One of Hollywood’s major errors last year was its emphasis on event films that weren’t really event films. The public smells non-event perfume on such movies and runs in the opposite direction. A smarter approach is to stop trying to pitch tentpoles all over the marketplace and go back to the concept of making movies that deliver good entertainment to a broad audience. By spending less to make films, the result can be films that don’t have to appeal to all four demographic quadrants in order to stand a chance of recouping their money. Films that are perceived as good entertainment by one or two demos and that haven’t cost $100 million or more to make can perform on the basis of more limited demographic appeal.

5. Greenlight more original material and say no to projects that are remakes, inspired-bys, TV series spinoffs or sequels to old movies. If you look at last year’s disasters, you’ll find a long list of projects that never should have seen green light. In many cases, these are what the media calls “retreads.” The concept has been that these familiar titles are marketable because they’re brand names that people instantly recognize. What we saw last year was that if, indeed, the public did recognize these so-called classics from television or from Hollywood’s movie vaults they didn’t care to spend money to see them again at today’s ticket prices. Original material, on the other hand, tended to blossom when it was planted in the marketplace and marketed well.

6. Stand up to stars who behave badly. 2005 was a year in which more than a few Hollywood stars ran wild, promoting themselves and their pet causes more than their movies. It was a year in which bad behavior in public by stars and other celebrities got in the way of getting the real message out about the movies these people were paid well to make and promote. When movie stars make headlines for their bad behavior not only in tabloids that typically thrive on such coverage, but in mainstream media, too, you know it’s time to insist that they clean up their act.

Promoting movies is no longer an incidental contribution that stars make to keep distributors happy. Getting out there on the media circuit to promote your film is now an essential part of being a movie star. The days when stars could say their jobs ended when the cameras stopped rolling are over. Hollywood needs its stars to be out their working on the publicity front. The trouble is that they’re not as valuable with the media when the public starts thinking they’re obsessed with their own political or personal agendas or are acting badly in real life.

7. Refuse to let filmmakers realize their childhood dream unless it’s one that moviegoers clearly share. It’s great to embrace the dreams that filmmakers have, but not when these dreams aren’t necessarily shared by the ticket buying public. Hollywood has been losing track of the fact that just because a filmmaker is dying to do a project doesn’t mean that the audience is going to be dying to see it.

8. Say no to three-hour films. The problem with three-hour films is not that they lose a showing per night the way they did years ago when there were fewer screens available in the U.S. and Canada. The real problem is that people don’t really have three hours or more in which to see movies these days.

In fact, it’s really four hours or more of time that’s required to see a long film because you’ve got to get there and you’ve got to get home. If you see a three-hour film at 6 p.m. that means you’d probably get out of the theater at 9:30 p.m. or even 9:45 p.m., depending on how much pre-show advertising was shown. For many people, particularly those not living in New York or L.A., getting home on a weeknight at 10:30 p.m. is just too late. That’s why lengthy films do especially well on Sundays — when people have more time to devote to seeing them. It’s really not a question of whether a film merits three hours in which to tell its story, it’s a question of whether the audience has the time to watch it.

Yes, there always are exceptions. Yes, “Titanic” was long and, yes, it’s the ultimate Hollywood blockbuster. Yes, lightning sometimes strikes again, but do you want to depend on that happening? Hollywood should think long and hard about letting any film run three hours or longer.

9. Recognize that certain times of the year just aren’t good timing for the release of certain types of movies. Hollywood likes to say that this is a 52 week a year business and the only thing that matters it he quality of the movies. As good as that sounds, it just doesn’t seem to be the case these days. In the summer, for instance, looking back at ’05, it’s pretty clear that audiences weren’t in the mood for serious adult-appeal product in early June. That’s popcorn movie time, like it or not. Hot weather has a way of making people crave lighter entertainment, which is why sci-fi fantasies, action-adventures, animated features and youth appeal comedies do so well in the prime weeks of summer. Hollywood should slot its serious dramas in the fall or winter months, not only because the audience is wide open to such product then but also because of very helpful proximity to the awards season.

10. Pressure exhibitors to cut back on or, better yet, eliminate in-theater commercials. As difficult to undertake as all of the above resolutions would be, this one is the real killer. The self-interests of exhibitors and distributors are quite different and, yet, very similar. After all, they both want people to buy movie tickets. Without ticket sales, there’s no revenue to split, no matter how you’re splitting it. In the case of in-theater commercials, however, there is no split. So it’s an important revenue source for exhibitors, but an irritation to distributors because the public keeps complaining about it.

Hollywood should do its utmost to convince exhibition that it’s not in anyone’s interest to alienate the moviegoing public by hammering them over the head with commercials, particularly so many that they’ve already been exposed to on television. If there must be commercials in theaters, they should at least be more creative and less obnoxious than the commercials people are zapping their way through at home thanks to TiVo. Of all the negative aspects of the moviegoing experience today, people cite the proliferation of commercials as one of the very worst. Improving this situation should be a key goal for Hollywood in the year ahead.

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