Movies And The Economy

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Movies And The Economy: Courting Adults In A Time Of Declining Film Attendance 

There is a dilemma facing American theaters today.  In 2002 at it’s peak of admission of 1.57 billion movie goers to 15% less in the last decade.  American theaters are in the “recessionary era of shrinking paychecks” and dull Hollywood fare.  Think of what theaters have to compete with today.  With technology making it easier to watch movies from the comfort of your home to cable companies getting movies to you sooner and sooner, theaters are having trouble competing. 

In 1948, 67% of Americans went to the movies at least once a week, today that number is less then 10%.  Movie going is one of the cheapest forms of entertainment, cheaper then lets say sporting events or concerts.   

“If movies are to stay in the black,” they need to persuade adults to come.  How do they do that you ask?  Well, food is an important factor to the profit making.  Most theaters make up the difference by rising popcorn and pop prices.  If you think about it theaters are more in the snack business then they are in the movie business.  

Video on demand is threatening the “livelihood” of theaters.  The possibility is that, film lovers that like to stay home no matter how attractive the movie is will spend a few dollars more and rent it on demand, if it is offered at the same time. 
The days of hundreds of people amercing themselves all at once in a theater is vanishing.  Something needs to draw people back to the movies.  It needs to be a “special experience.”  In 2011 there were a lot of remakes and sequels, there has been little “originality and inspiration” to bring people to the big screen.  Something needs to happen to bring people back to the theaters.  The question is, what?

Six Things the Film Industry Doesn’t Want you to Know!

Six Things the Film Industry Doesn’t Want you to Know!

First is tricky Hollywood accounting.  This may sound ridiculous, but it happens quit often.  “A studio makes a movie,” and then distributes the movie, but however the distributor is basically a separate company and both belong to the same parent company.  And they also set whatever fee they want.  This is the interesting part if they want to charge themselves eleven “quintillion” dollars for distributing the movie they can.  It doesn’t stop there, even if they, in the box office, earn billions of dollars, they are still in debt, to themselves, and have not turned a profit. 

Take for example David Prowse, who was the guy in the Darth Vader costume in the original Star Wars trilogy, get this he has “never been paid for Return of the Jedi because it hasn’t turned a profit” in 30 years.  Think of all the home movies and theatrical re-releases that movie has had and he never got paid.  That is just one example of how Hollywood accounting has screwed someone over.

Next is extorting theaters.  We’ve all been there at the movies and spent $7 on a box of popcorn.  The truth is movies theaters had to look for ways to “increase revenue,” upping the prices on things like candy and adding ads to the start of films.  You may ask yourself why is this when new releases are continually breaking records and make “obscene amounts of money?”  It’s simple, film studios don’t want theaters getting a break.  

Third, fake reviews.  You’ve probably never seen a trailer for a movie that is dumb.  Think of one critic’s review of “Live Free or Die Hard” got cut from “hysterically overproduced and surprisingly entertaining” to “hysterically…entertaining.” 

Then there’s, copyright bullshit.  The thing is big companies use copyrights as a way to keep people from what they right. 

And strangling consumer choice, you see Hollywood studios don’t like companies like Netflix, Redbox or Hulu because they don’t want you to watch you what you want when you want at a reasonable price.  The reason is because it cuts into their profits of DVD’s and pay-per-view rentals. 

Last, stealing scripts.  It’s “almost commonplace.”  There are many examples of writers pitching an idea to Hollywood producers including a big name for the movie.  And then a few months later a similar movies with, that you guessed it, the big name actor, comes out.

How are Hollywood Blockbusters Financed?

How are Hollywood blockbusters financed?  That is a question that any independent filmmaker want’s to know.  There are lots of ways that Hollywood movies makes money, like when viewers go to the movies, rent it, when accessible by DVD, or they buy the soundtrack.  You can also get money from television, domestic and foreign, pay-per-view or cable.  But please keep in mind that a percentage of these revenues are split up to different parties, like the actors.

Another way that money can be made is by merchandising and licensing contracts.  Studios usually get a portion of this money.  Paying for a movie is more then just making the movie.  There is a lot of money that goes into marketing a movie.  This is why you can’t just depend on ticket sales from the movie you need to rely on other investing avenues.    

When you think of movies being made you think of them being made in Hollywood, but when it comes to financing “the shoot spread across the world.”  Take from example Germany’s tax code.  Investors looking to manipulate finances invest in a movie to get tax reductions “right away.”  What they do is buy a movie and then lease it back to the studio.  So we all need to look to the Germans to finance a movie.  

You can always try to get independent backers on your film, like doctors or dentist.  But that is easier said then done.  Another great way to cover costs is through product placement.  Now don’t be to in your face when it comes to product placement and remember to blend it into your movies plot it can help with cost.  Just “keep in mind that backing movies is always something of a gamble.”  So when trying to find a backer make sure you have a solid pitch, have a business plan for the movie.