December 22, 2024

Common Sense: As Hollywood Leans on Blockbusters, the Flop Looms

With a record number of big-budget action- and special effect-laden blockbusters opening between the beginning of this month and the end of August, competition for the spectacle-craving young male and surging international audience has never been more intense.

Steven Soderbergh, the much-admired filmmaker, delivered a blistering critique of the phenomenon at the San Francisco International Film Festival a few weeks ago, bemoaning studio executives’ lack of imagination and their fixation on big-budget franchise films. “Cinema as I define it, and as something that inspired me, is under assault by the studios,” he said. He likened the big studios to “Detroit before the bailout” and worried that the hegemony of the blockbuster is “a trajectory that I think is pretty difficult to reverse.”

But his warning may have come too late for this summer, when the studios seem to be headed over a blockbuster cliff. The numbers are pretty stark. According to Doug Creutz, the senior media and entertainment analyst for Cowen Company: “Of the expensive action and animated movies, we’ve never had a summer where more than nine did well, and often it’s fewer. This summer you’ve got 17 blockbusters coming out between May and July, 19 if you add August,” which he said is the most crowded release slate in recent memory. “Is this going to be by far the biggest summer box office in history? Maybe, if they’re all great movies, but it’s not likely.”

Studios have been shifting their resources toward what are variously called blockbuster, event, or tent pole movies for years — the big-budget movies intended to help studios make up for their less profitable films. By and large, the strategy seems to have paid off. “We haven’t seen many tent poles blow up,” Michael Nathanson, a media analyst and managing director at Nomura. “But this summer could be the breaking point. There may be some big write-offs on some of these films.”

The dominance of the blockbuster may have many directors, writers and producers wringing their hands, but it has been warmly welcomed by moviegoing audiences and Wall Street. Of the 15 movies that have grossed more than $1 billion, all were big-budget and all but three (“Avatar,” “Titanic” and “Alice in Wonderland”) were franchise films. And only “Avatar” could be considered original material. Disney’s “Iron Man 3,” the quintessential franchise blockbuster, opened two weeks ago and on Thursday joined the billion-dollar ranks.

(Curiously, once the figures are adjusted for inflation, none of the Top 10 grossing films of all time were part of a franchise, though all were big-budget event films at the time. The top grossing movie, adjusted for inflation, is “Gone with the Wind.”)

Mr. Soderbergh readily conceded that blockbuster films, despite often scathing reviews from critics, seem to have “the full support of the audience.” While waiting at Kennedy Airport, he said, he saw “a guy on the other side of the aisle in front of me and he pulls out his iPad to start watching stuff.” Mr. Soderbergh went on: “I’m curious to see what he’s going to watch — he’s a white guy in his mid-30s. And I begin to realize what he’s done is he’s loaded in half a dozen action sort of extravaganzas and he’s watching each of the action sequences. He’s skipping over all the dialogue and the narrative. This guy’s flight is going to be five and a half hours of just mayhem porn.”

The blockbuster phenomenon is also pleasing Wall Street and investors because it means that the big studios are making fewer movies, yet commanding a larger share of total box-office revenue. “It’s been a smart strategy,” Mr. Nathanson said. “They’re making fewer films and controlling costs and they’ve stabilized the industry. This is appealing to Wall Street. It’s a coherent strategy that can be articulated to investors. The studios may not be growing much, but they’re not the declining problem children they were after the DVD bubble popped.”

Article source: http://www.nytimes.com/2013/05/18/business/as-hollywood-leans-on-blockbusters-the-flop-looms.html?partner=rss&emc=rss

Media Decoder: With Sale Of MySpace, Some Relief

DESCRIPTIONJin Lee/Bloomberg

8:14 p.m. | Updated MySpace, the long-suffering Web site that the News Corporation bought six years ago for $580 million, was sold Wednesday to the advertising network Specific Media for roughly $35 million.

The News Corporation, which is controlled by Rupert Murdoch, had been trying since last winter to rid itself of the unprofitable unit, which was a casualty of changing tastes and may be a cautionary tale for social companies like Zynga and LinkedIn that are currently enjoying sky-high valuations.

Relief over the sale was palpable on Wednesday, and not just at the News Corporation. Wall Street “just wanted it done, because it’s been a real drag on growth,” said Michael Nathanson, a media sector analyst for Nomura Securities.

Terms of the deal were not disclosed, but the News Corporation said that it would retain a minority stake. Specific Media said it had brought on board the artist Justin Timberlake as a part owner and an active player in MySpace’s future, but said little else about how the site would change.

The sale closes a complex chapter in the history of the Internet and of the News Corporation, which was widely envied by other media companies when it acquired MySpace in 2005. At that time, MySpace was the world’s fastest-growing social network, with 20 million unique visitors each month in the United States. That figure soon soared to 70 million, but the network could not keep pace with Facebook, which overtook MySpace two years ago.

As users fled MySpace, so, too, did advertisers. The market research firm eMarketer estimates that the site will earn about $183 million in worldwide ad revenue this year, down from $605 million at its peak, when the site introduced many Web users and many advertisers to the concept of social networking.

“It’s a shame that MySpace’s value has diminished so severely since the acquisition; MySpace’s pioneering of social networking (now referred to as social media) will always be revered as igniting a new medium,” Richard Rosenblatt, the chairman of MySpace at the time of the sale to the News Corporation, said in an e-mail.

Instead of envy, the News Corporation’s bet on MySpace now provokes punch lines. Tom Freston, who was fired as the chief executive of Viacom in part for failing to buy MySpace, joked in an interview with CNBC earlier this year that “I’m still waiting for a thank-you note” from the Viacom chairman, Sumner M. Redstone.

Mr. Freston, who was in Iceland on Wednesday and said he was smiling at the news of an impending MySpace sale, declined to comment.

News Corporation executives declined interview requests on Wednesday.

It is not clear whether MySpace itself was profitable for the company. The division that houses MySpace and other digital properties has turned a profit only once in the last six years. An advertising deal with Google helped the company to recoup what it spent on MySpace in the first place, but the site became a burden on the company’s earnings; by last year executives were calling the losses unacceptable. Mr. Nathanson called the site a “headache.”

What doomed the site? Lee Brenner, the former director of MySpace’s Impact section who is now the publisher of HyperVocal, wrote in a blog post Tuesday, “I’m sure most employees (former or current) will argue that it was poor management, or a need to hit revenue targets once News Corp. took over, or a bottleneck in the technology department, or lack of resources given to their division, or a poor public relations effort, etc., that set the course of MySpace’s downfall.

“Any number of these could be true,” he continued. “I suppose we’ll never know for sure. It is most likely a combination of these factors, along with a ‘low attention span’ public. It probably didn’t help to be doing business, and trying to grow, along with all of these issues, in the midst of a global economic crisis.”

MySpace has tried to reboot itself several times, most recently as a social destination for music, movies and other media. It has not been abandoned altogether: it still has 35 million visitors a month in the United States, according to the measurement company comScore. Facebook has 157 million visitors a month in the United States.

“It’s still one of the biggest pockets of traffic on the Internet, for the price,” said a former MySpace executive who insisted on anonymity to maintain friendships and business relationships with the News Corporation.

Mr. Timberlake said in a statement about the sale that MySpace still had the potential to be the place on the Web where “fans can go to interact with their favorite entertainers, listen to music, watch videos, share and discover cool stuff and just connect.”

Many of the current and former MySpace users who reacted to Wednesday’s sale thought differently. Many compared MySpace to Friendster, a social network that was left for dead years ago.

In preparation for the change in ownership, many of MySpace’s roughly 400 employees were dismissed on Wednesday. Mike Jones, the Web site’s chief executive, said in an internal memorandum that he would depart in the next two months.

“Today should be a day,” Sean Percival, a vice president at MySpace, wrote on Twitter Wednesday morning, before the sale announcement.

He followed up later in the day, telling his online followers that Wednesday would be his last day at the company. Seemingly referring to the site’s rise and fall, he wrote: “It was a unique moment in time and an impossible problem to solve. Was proud to be a part of it.”

Article source: http://feeds.nytimes.com/click.phdo?i=111d5a2194791b1872769652fe7ff9d7