The summer of 1997 looks OK on the face of it. Overall, Hollywood's domestic box office revenues were up a bit (around 2%), hitting a new record of $2.23 billion. Of all the big films released in the summer, only "Speed 2: Cruise Control" was an out-and-out flop, though there were plenty of small-to-medium budget films that flopped, too. So, few disasters occurred and some good things happened.
A slightly closer look is slightly more disturbing. There are three major problems. First, revenues went up 2%, but the costs of making and marketing a typical Hollywood film went up 17%. Thus, the extra revenue of this summer was more than offset by extra costs. One place you can see this effect show up was in the proliferation of $100 million budgets. A few years back, that was an obscenely high budget, indicative of a film out of control. This year, it's practically the cost of doing business, if your business is big action films. The increasing costs of making big films are necessarily matched by increasing costs of marketing them. Cost up 17%, revenues up 2%. Not a pretty picture.
The second problem is that more films were released this summer than last, meaning that the per-film revenue went down. Hollywood had to roll the dice more often to get that 2% rise, spending more for each roll.
The third problem is that ticket sales went down. The tickets were, on average, more expensive than last year, but 1% fewer were sold. A 1% decline could be a blip, but ticket sales have dropped for the past three summers. That's a trend, not a blip. That means that Hollywood is actually making less attractive films for audiences. Fewer people want to go. In a sense, this is the most disturbing number of all.
Of course, there are relative winners and losers. Sony turned things around big time this summer, putting up their first half-billion dollar summer ever. "Men in Black," "Air Force One," "My Best Friend's Wedding," and "The Fifth Element" lead the way for them. However, things aren't quite as wonderful for Sony as it looks at first glance. "Men in Black" is an Amblin film. Amblin grabs a huge gross percentage off the top, lessening Sony's profit. "Air Force One" was made by an outside company, and Sony doesn't have the foreign distribution rights. (The silver lining here is that Sony also didn't come up with anything like the full budget of this film, so the costs they need to offset are lower than usual.) "The Fifth Element" is the same story, with France's Gaumont owning foreign rights. (But, again, Sony had limited exposure, so they did very nicely.) Sony's biggest worry is that every one of these hits was put into production by the previous studio head, who got canned last year. So it's unlikely they'll repeat the trick next summer.
Disney had the second biggest share of the box office. They have more of this good-news/bad-news stuff. First, the bad news. Relatively speaking, "Hercules" tanked. "Hercules" was supposed to cure the problems that caused disappointing earnings for Disney's last two animated summer films. Hero, instead of heroine. Lighthearted, instead of dark. Well, I guess those weren't the problems. "Hercules," despite a big ad campaign and pretty good reviews, is not performing up to even the level of "The Hunchback of Notre Dame." Disney will need to drag it up the mountain to a $100 million gross.
On the live action side, though, Disney did very nicely. Disney has been trying to build up event live action films for children, in the same way their animated films used to be event films. Last year's "101 Dalmations" was the first attempt, and "George of the Jungle" was the second. So far, it's working. George outgrossed Hercules, at less cost. "Con Air," "Nothing To Lose," and "G.I. Jane" also made good contributions. Miramax helped out, with "Copland" likely to approach $50 million, and "Mimic" good for maybe $30 million. More traditional Miramax fare like "Shall We Dance" is doing the traditional Miramax business - making $2 or $3 million profit per film, on a lot of films. It does add up, provided you're clever enough to find 20-40 films that can perform that well.
Warner Bros. came in third, largely on the strength (if you can call it that) of "Batman and Robin." The revenues were disappointing, but they were more than large enough to offset its fabulous cost. "Contact" was WB's other winner, also bringing them good prestige from generally favorable reviews. The Bros. have to be worried about the weakening appeal of the Batman series, however, and its ballooning costs. They may be able to make the next one better, but they probably won't make it cheaper.
Universal was next up, but their results have to be considered especially disheartening. They grossed around $271 million, but a full $228 million of that was from "The Lost World." Profit terms for that film weren't that great for Universal, what with gross points for Spielberg, Crichton, and Amblin. Worse, from now own Mr. Spielberg will be working mostly for Dreamworks. Universal has not proven recently that it can make a big hit that doesn't come from Spielberg (unless it stars Jim Carrey), and they don't have Spielberg any more. "Kull the Conqueror," "A Simple Wish," and "Leave It To Beaver" weren't exactly big time summer competitors.
Paramount did OK off the success of "Face/Off," and the cheap "Good Burger" will probably turn a profit. But the rest of their schedule pretty much tanked. However, at least most of the losers weren't expensive films.
Fox stank up the joint. "Speed 2," miraculously, made nearly $50 million domestic. Even more miraculously, it's made over $70 million so far outside the US. Unfortunately, that means it's grossed slightly less than its negative cost, with only limited further theatrical potential. That means Fox will take the red-ink bath on it. And that's about all there was for Fox this summer. "Picture Perfect" and "Out To Sea" did well enough to show small profits, but probably Fox's biggest success story of the season will be "The Full Monty," and, as an art house release, a big success would translate into a $5 million profit. Which would maybe cover the leech budget for "Speed 2."
MGM, for all practical purposes, did not compete. "Hoodlum," their only big summer release, was late and weak. Combined with MGM's recent revelation that they haven't made a profit in ten years, and probably won't for several more, it's not been a great summer for them. Here's a stock market tip - don't buy into MGM upcoming IPO.
New Line made a bit of money off "Spawn" and the lingering early summer success of "Austin Powers." "Money Talks" is doing OK for them, too.
In terms of more personal winners and losers, Spielberg wins again. He can turn out a gross of over $200 million on even a mediocre film and he continues to pick winners to produce. John Woo has established himself as a major action film director, and, encouragingly, is increasingly able to include the themes he really cares about in his films. Barry Sonnenfield earned the right to do whatever he wants next. Robert Zemeckis maintained his reputation as a reliable director of off-beat hits. Nicholas Cage solidified his credentials as a big-time action star. John Travolta continued to deliver the goods. Jodie Foster added to her reputation of being one of the leading serious actresses of her generation. Julia Roberts confirmed that she's the leading romantic comedienne of the present day, and a reasonably strong draw in suspense films. She just needs avoid playing any more Irish women.
The big loser is probably Jan de Bont, who spent nearly three times the domestic gross of "Speed 2" to make one of the worst reviewed films of the summer. Joel Schumacher did himself no good, practically torpedoing the Batman franchise. But his film will eventually show a profit, and Schumacher has lots of past successes, so he'll get another shot. Schwarzenegger continues to deliver the foreign audiences, but his turn as Mr. Freeze did not help his reputation in the US. Sandra Bullock is not looking so hot.
Audiences continue to love the large scale action films, but the stakes keep getting higher. The result is that a number of films that made around $100 million, while certainly profitable, are not exactly making their owners terribly excited. They laid out that much or more just to make some of these films, and they'll have to wait for the international returns to get their profit. Measured against their risk, that profit will not make them too happy.
The summer did offer some alternatives for success. "My Best Friend's Wedding" suggests that a moderately clever script, some snappy direction, and a well- liked star can still bring in the crowds. A few smaller films, like "Ulee's Gold" and "The Full Monty," showed that there are other ways to make money in films than opening huge movies on 4500 screens. Kids will turn out for high concept films, provided they're fairly stupid and have lots of fart jokes.
The summer's major phantom is actually a reasonable metaphor for the business atmosphere. Like the Titanic, Hollywood is cruising along with everyone decked out in elegant evening wear, while the band plays. But they're heading for an iceberg, and the ship isn't nearly as seaworthy as a cursory inspection would suggest. The metaphor breaks down when one examines the likely disaster - no sudden plunge to the bottom of the ocean is in sight. Rather, the ship will slowly take on water and sink further and further, and sooner or later the water will come up over the rails.