Summer Fading, Hollywood Sees Fizzle - New York Times

Summer Fading, Hollywood Sees Fizzle - New York Times
By SHARON WAXMAN
Published: August 24, 2005

LOS ANGELES, Aug. 23 - With the last of the summer blockbusters fading from the multiplex, Hollywood's box office slump has hardened into a reality that is setting the movie industry on edge. The drop in ticket sales from last summer to this summer, the most important moviegoing season, is projected to be 9 percent by Labor Day, and the drop in attendance is expected to be even deeper, 11.5 percent, according to Exhibitor Relations, which tracks the box office.

Multiples theories for the decline abound: a failure of studio marketing, the rising price of gas, the lure of alternate entertainment, even the prevalence of commercials and pesky cellphones inside once-sacrosanct theaters. But many movie executives and industry experts are beginning to conclude that something more fundamental is at work: Too many Hollywood movies these days, they say, just are not good enough.

"Part of this is the fact that the movies may not have lived up to the expectations of the audience, not just in this year, but in years prior," said Michael Lynton, chairman of Sony Pictures Entertainment, which had some flops this summer, including the science fiction action movie "Stealth" and the romantic comedy "Bewitched." "Audiences have gotten smart to the marketing, and they can smell the good ones from the bad ones at a distance."

Even Robert Shaye, the studio leader behind "The Wedding Crashers," one of the summer's runaway hits, shares the worry about the industry's ability to connect with audiences. "I believe it's a cumulative thing, a seismic evolution of people's habits," said Mr. Shaye, chairman of New Line Cinema.

In previous years, he said, "you could still count on enough people to come whether you failed at entertaining them or not, out of habit, or boredom, or a desire to get out of the house. You had a little bit of backstop."

With competition from video games, hundreds of television channels and DVD's, that's no longer the case, he said. The problem, these studio leaders and other industry experts seemed to say, was not only that a steady diet of formulaic plots, too-familiar special-effects vehicles and remakes of television shows has, over time, left the average moviegoer hungry for better entertainment.

Marc Shmuger, vice chairman of Universal, said Hollywood has been too focused on short-term box office payoff and not focused enough on what he called "the most elemental factor of all" - the satisfaction of the moviegoing experience.

"It wasn't like the last crop of summer movies were that much better than this summer," said Mr. Shmuger, whose studio's recent releases included the success "The 40-Year-Old Virgin" and several disappointments, including "Cinderella Man," "The Perfect Man" and "Kicking and Screaming." "This summer has been as deadening as it has been exciting, and there's a cumulative wearing down effect. We're beginning to witness the results of that. People are just beginning to wake up that what used to pass as summer excitement isn't that exciting, or that entertaining. This is vividly clear in terms of the other choices that consumers have."

The blockbuster hits of last summer, including "Spider-Man 2," "Shrek 2" and "Harry Potter and the Prisoner of Azkaban," performed more or less on the same level as this year's hits, including "Star Wars: Episode III - Revenge of the Sith," "Batman Begins" and "War of the Worlds." But too many big-budget movies, including "The Island" and "Stealth," flopped entirely, while other films, from "Bad News Bears" to "Herbie: Fully Loaded" to "The Great Raid," were disappointing.

The box office numbers have led to intense, broad-ranging conversations across Hollywood about the implications. Many studios have commissioned market research to investigate the causes of moviegoing behavior - or the lack thereof. At New Line, executives have been talking about the "sameness of everything" on movie schedules, one executive said. At 20th Century Fox this week, a half-dozen top executives held an impromptu brainstorming session at the commissary with a reporter, debating the effects of gas prices and marketing missteps.

Tom Rothman, co-chairman of 20th Century Fox, was one of the few to see no negative trend in the current numbers. "Everybody keeps saying it's the worst of times; it seems fine to me," said Mr. Rothman, whose studio has had some big-budget successes this summer, with "Mr. and Mrs. Smith" and "The Fantastic Four." He noted, for example, that the advent of DVD's has expanded the overall revenues of the movie industry. "For us the business is healthy, but it requires management," Mr. Rothman said.

Just about everywhere else, though, the concern is palpable - and understandable, not only because of the performance of this summer's movies, but also because a decline is discernible over time: overall movie attendance, a figure not affected by inflation, has slid to below where it stood in mid-August 2001. DVD sales, while still robust, are no longer rising exponentially, and some analysts say that a poor box office performance this summer will lead to poor DVD sales this winter.

With billions of dollars at stake, nerves are growing understandably frayed. Last week, John Fithian, the president of the National Association of Theatre Owners, accused Robert A. Iger , the incoming chief executive of Walt Disney, of leveling a "death threat" at theater owners for having suggested that the lesson to be drawn from the slump is that moviegoers want films to be accessible in theaters and on DVD simultaneously.

"The structure of the industry is sound," said Mr. Fithian, who believes in maintaining a distance between the theatrical release and the DVD. "We just need a few more good movies."

Mr. Iger had observed that studios ignored consumers at their peril. "We can't allow tradition to stand in the way of where the consumer can go, or wants to go," he told analysts this month, warning that "the music industry learned this the hard way."

Mr. Iger's conclusion - that consumers want the choice of seeing movies in their homes at the same time as in the theater - is being reached by others in the industry as well. But it remains contentious, resisted not only by the owners of theater chains. Mr. Lynton of Sony was adamant that the theatrical experience should be protected, while Mr. Shaye said he was still "on the fence" on the subject.

Warren Lieberfarb, a former Warner Brothers executive who was a main advocate of the DVD in the early 90's, warned that going to the movies had become too expensive over all, given the excellent quality of home theater. "It's not just the DVD. It's not just the DVD window," he said. "It's the flat-panel television and the sound system, with the DVD option, that has radically changed the quality of the in-home experience. The home theater has arrived." As a result, he said, "you have to change the business model of the movie business."

With the task so large, and so very complex, Hollywood is still grappling with how to broach solutions.

Mr. Lynton said he would focus on making "only movies we hope will be really good." At Fox, executives said they are looking to limit marketing costs. At Universal, Mr. Shmuger said he intends to reassert "time and care and passion" in movie production. Some of his own summer movies, he conceded, should never have been made.

He declined to name them.