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March 23, 2009

Why Does The NYT Keep Missing The Story?

Over the weekend, a Brooks Barnes story – “Who Threw the DVD From the Train?” – ran in the NY Times… and it keeps me wondering… where are the editors at the Paper of Record?

Firstly, that headline is not representative of the story. But that is the least of its problems.

My big problem with a lot of this kind of coverage, especially from The Times, is that it has facts that are true… and analysis that makes those facts into irrelevant falsehoods.

There are, of course, your occasional outright mistakes, like , “For over a decade, a motion picture’s caboose — DVD sales — has been the driver of its profitability.”

DVD wasn’t introduced until 1997. And in 1999, a decade ago, there were fewer than 15 million DVD players in the world and total DVD sales and rentals were under $750 million, about 10% of domestic theatrical alone. DVD gross revenues eclipsed domestic box office in 2002 and passed worldwide theatrical in 2006.

But the greater mistake in this piece and others is contextual.

There is popular error (repeated enough to be bordering on a lie) – that it was ever NOT the case that “the theatrical run of a film was actually important for more reasons than serving as a marketing platform for home video” – is unfortunate.

There was a period between 2004 and 2008 in which the caboose did drive the train. But again, the story doesn’t really understand how.

The premise of Barnes’ coverage is that movies were made with DVD interest ahead of theatrical. And that was just not the case. For movies that were intended for theatrical release, maximizing theatrical has always been an issue. DVD revenues and other ancillary markets have been financially tied to theatrical performance throughout the life of DVD. Some films have significantly outperformed the theatrical, in gross and/or in the perspective of industry norms. But that has been the rarity.

What did happen was that gross revenues increased for most product so quickly because of the new stream of DVD money that for a short period, everything that made it into the mainstream DVD market was virtually guaranteed to make money. Then the agents saw this and started making the productions pay enough of those revenues to eat the “found money.” In addition, agents, packaging films, were encouraging their talent to push for “bigger” films because the money was there to fund “bigger” films.

Plus, there was more loose money for marketing, so the bigger films started reaching further and further out… which meant that smaller films needed to spend more… which meant that bigger films needed to spend even more to overwhelm the market… MMAD… Movie Mutual Assured Destruction.

All of this led to a somewhat balanced system, though many knew it had gotten a little insane and said, “no.” But pressure was put on those who seemed frugal.

Then, the cash cow matured. The industry forgot that VHS also boomed and then slowed. The forgetfulness was aided by the launch of DVD, which kept the VHS bubble from fully bursting. But any sane market watcher had to know that DVD would eventually flatten.

Making it worse, the revenues for DVD were grossly exaggerated annually by the release of older television programs into the market. Because the industry didn’t really separate the revenues from movies and older TV library product, it was hard to know that while the long unexploited TV product was selling, the new feature film business was not ever as strong as it seemed. As DVD matured, new movie sales slowed first… and it would be another couple of years that old TV stopped selling as well – as the prime product was used up - and the papers like the NYT noticed that DVD was plummeting.

Which brings us back to this piece… which misses what really happened… that “the caboose” never drove the train, but that it was capable, for a short while, of saving almost any train. It was a safety net. But as studios expanded spending, the safety net was no longer big enough to assure safety. And as the safety net itself started shrinking, films started splattering against the ground.

Thing is, the pendulum isn’t swinging back to theatrical, except in the perspective of a few who really don’t get it. The pendulum never really swung away from theatrical. It has always been the biggest per-capita revenue opportunity for any movie. But for a moment, it was less than half of the overall revenue of a movie. But 40% is not nothing.

When the studios set up their new indie Dependents in the midst of this, they knew that revenues were not necessarily going to be huge. But DVD meant everything could be expected to make at least a little money. But that changed also. Of course, by shutting down those same arms, the parent studios made a different unpleasant statement. Even though these arms, if cautious, could still be profitable, there was some risk and the small profits were not worth the small risks.

But I digress…

“Most of all, it means a strong return by major studios to middle-of-the-road, genre pictures.”

When the hell was it ever not so?

“The sweat factor these days is pretty high for anything that isn’t a sure sell on screen.”

When the hell was it anything else?

(Note that the quote comes from the first-time director of a film made on a small budget that was released as awards bait and that the studio backed off of a bit, in marketing dollars, when it didn’t take off at the Toronto International Film Festival.)

“Miramax is about to release a teenage comedy called “Adventureland,” billed as a romp on par with “Superbad” from 2007. Fox Searchlight is rolling out “Miss March,” about a guy in search of his virginal high-school sweetheart, who has become a centerfold model.”

And has Mr. Barnes looked at the history of the Dependents and the many audience-friendly films they have all released for years? Does he recall Miramax, under The Weinsteins, having Dimension set up to meet this demand? Has he heard of Rogue and Fox Atomic and Lionsgate?

A great paper like the NYT needs to stay away from these trend pieces, because, at least in movies, they get it wrong almost every time.

And this comes from the guy who has been saying that theatrical would be seen as a more important piece of the puzzle for years, even when the NYT was selling the fake-o Slump of 2005. And it is. But not the way it was laid out here.

Posted by dpoland at March 23, 2009 01:54 PM

Comments

Posted by: brack at March 23, 2009 08:26 PM

Posted by: David Poland at March 23, 2009 08:44 PM

Posted by: brack at March 23, 2009 10:26 PM

Posted by: David Poland at March 24, 2009 03:22 AM

Posted by: hcat at March 24, 2009 06:47 AM

Posted by: Deathtongue_Groupie at March 24, 2009 11:53 AM

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