MCN linked to two Business Insider re-prints (apparently agreed to by the authors) that continue to misunderstand the most significant part of the future of delivery for studios... there is no reason for a middleman. Simple, huh?

Netflix? It's been a great run that has offered a paradigm shift that was needed by consumers... just like Blockbuster. But this rather bizarre notion that NetFlix has a big future as a distributor of content (as suggested here).

The first studio owned business to launch into the space is EPIX, which is "Viacom, Paramount, Metro-Goldwyn-Mayer Studios and Lionsgate." Right now, they are teamed with Verizon FiOS, but that's just the starter program. And while I do think there will be some teaming of companies in the long run, my guess is that it will be less and less... because the nature of the delivery systems will not require a complex infrastructure.

For the next decade - The Experimental Era - there will be partnerships and exclusives and a lot of dancing around how to maximize the base of potential subscribers. But that is a short-term issue, really. You will get content on all hardware, from cells to iPhones (and iPhone knock-offs) to computers to your very own TV that is internet enabled. It will happen.

And when it does, NetFlix will struggle for its existence in very much the same way Blockbuster does now. In fact, NetFlix's extinction is even more pressing because its concept does, indeed, lead to the next step. And when that next step comes, why would anyone pay NetFlix to manage the funnel... at least after The Experimental Era, during which I would expect at least one studio - perhaps all studios - to use the NetFlix platform for their experimentation.

This brings me to the other wrongheaded piece in Business Insider... The Movie Industry Needs To Stop Whining About Piracy And Embrace Digital.

Now, admittedly, the idiot claim that the studio film business is not more rangy in its tastes is because of piracy is as laughable as Dan Rayburn suggests. But, so is the idea that the film industry would be well served by simply giving consumers what they want when they want it at the price the prefer.

The collapse of release windows IS the collapse of the studio movie business. Period. Exclamation point.

I just can't repeat this often enough or loudly enough.

Studios are not afraid of the digital future primarily because of piracy. Piracy is the public whipping boy. And make no mistake... it is real. It is a big brick wall in the way of the expansion of the business into massively populated countries that have been used to cultural piracy as the norm since the dawn of VHS.

But that is going to be almost impossible to turn around.

What the studios can keep in check - and yes, even turn around a bit - is the system of release windows.

And why should they?

Because the post-theatrical window is heading towards and, as noted elsewhere, cannot be stopped from being defined by the demands of consumers. The Long Tail, in film and tv, means a severe and fiscally painful blurring of all the delivery systems and with it, all of the pricing on those delivery systems.

Technology has destroyed the idea of time itself in how people get filmed entertainment at home. Television seasons start and end whenever. Films are available forever on DVD, whether purchased or rented, streamed or watched on cable/satellite networks.

There are only two moments in which price point can be maintained... and if the industry isn't careful, they will collapse too... theatrical release and first post-theatrical release. $10 per ticket and $15 per disc (approximately).

After that, we ARE heading to a Redbox future. If you want to see something, pay the $1 and see it. Done and done. Even more so, I expect that we will see studios package - as with Epix - unlimited post-theatrical content for a monthly flat rate... $10 - $15.

But getting people to buy tickets to go sit in the dark at $10 a pop or to buy the hard copy of the DVD for $15 a pop... that is still and forever will be the holy grail... as it will forever be the highest per unit sale in the game. Even if it isn't where the largest percentage of income is created, it is a unique kind of income creation, the significance of which is overlooked only at the peril of businesses.

After that, it is an easy business. Any moron can give away content for a price so low that there is no price resistance and people can "have what they want when they want it."

Let's do the math. 30 million families paying $12 a month for all of Studio X's content delivered in every way imaginable is $360 million a month, $4.32 billion a year. And from there, the big issue is how much original content has to be created each year in order to keep the subscription base satisfied.

But there is more...

There is still revenue to be derived from free, ad-driven television delivery. There is still theatrical release. There is still DVD sell-through if that window is maintained. And there is pay-per-view for television and theatrical product on a pay-per-view basis.

It will be a tricky soup, balancing out consumer value versus cost of production. If your post-theatrical company isn't delivering The Dark Knight or Up or Slumdog Millionaire, will your subscribers churn?

Flip side, if you own The Dark Knight and it is available only on WPPTC (Warner Bros Post Theatrical Channel), it leaves a very large audience that, in theory, will be motivated to either buy WBPTC on a monthly basis or to purchase the DVD (which will be Blu-ray, regular DVD, and a download), since they can't see the film in post-theatrical otherwise.

Of course, there are problems. $12 per studio is $72 a month in premium channels (expect HBO to be Warners' channel, Showtime Paramount's, Encore's Disney or Universal, etc). Perhaps that's too pricey.

The upside, however, could be that the next-era American Idol keeps people on FoxNet in spite of a bad year for theatrical movies... and that a great year for movies keeps people on when the TV shows are lagging.

Anyway...

The most dangerous thing that the industry could do is to listen to guys like Rayburn and to crawl along with small and constant responses to technological advances and "what people want." It's not about what people want. That's the kind of thinking that content creators have... but we are all punks, financially. Neither Microsoft or Apple have given people "what they want." They tell us what we want, how we want it, and when we can pay (again) for the next generation.

Yes... the on-demand future is coming. But if you give people "what they want," there will be little new content of value to demand, as the cost of new production will become increasingly illogical. New content competition will drop away. And then, slowly build again.

There is something we can all recognize in our busy adult lives. If we don't find a reason to focus on content, we forget to focus on content. There are only so many hours in a day. Some shows can survive this... like Law & Order. Others cannot... like Heroes. And we know from YouTube what people tend to watch most widely when given a world of choices... bad soft-core porn and cats falling in toilets.

The "generous offer" note above was made by Fishbowl in response to the Facebook post.

Added Note, 4:47p - Carina Chocano, who joined the group just weeks before being fired by LAT, has apparently given up her slot. Her replacement, Betsey Sharkey, is not on the group's web site list of members and I don't know whether she applied for membership this summer or not. But Carina adds another number to the roster of those in the group who have lost their jobs in the last 18 months.

Producer of the new NetFlix series, Splatter... and Honorary Oscar Winner 2009.

The Bill & Melinda Gates Foundation awards $1 million to The Spirit of Youth Association, the non-governmental organization profiled in Garbage Dreams.

At the International Sustainability Conference in Cairo from October 27-29, waste recyclers from all over the world worked with members from organizations such as the Center for Environment and Development for the Arab Region and Europe (CEDARE), the World Bank, United States Agency for International Development (USAID), and the Global Alliance for Incinerator Alternatives (GAIA) to discuss the sustainability issues we are facing in the 21st century.

The conference ended with a screening of the documentary Garbage Dreams, winner of multiple awards including the 2009 Al Gore REEL Current Award at the Nashville Film Festival. (http://www.garbagedreams.com/). This coming of age story follows three teenage boys involved with the Spirit of Youth Association, the community based organization of Zaballeen, (Arabic for “Garbage People”) as they embark on a journey to turn their century old recycling trade into a 21st century job. A heartwarming applause concluded the film when all three boys profiled in the film, Adham, Nabil, Osama and their teacher, Laila stood up with the film’s director, Mai Iskander, to greet the audience and to answer questions.

Melanie Walker, Senior Program Officer for Special Initiatives, Global Development Program of The Bill & Melinda Gates Foundation joined them at the front of the room and announced a new partnership between the Bill & Melinda Gates Foundation and the Spirit of Youth Association (SOY).

“I feel so strange stepping up here with all these amazing, amazing people. We never had a movie screening at the Gates Foundation. . . This year maybe a month and a half ago, we invited Mai [Iskander] to come screen the film [Garbage Dreams] for us at our foundation.” She went on to highlight Special Initiatives’ goal of empowering impoverished peoples of the world by helping to integrate their voices into the city planning process. When speaking of her own reaction to the film, Ms Walker said, “…as you mentioned, it [Garbage Dreams] is very eye opening. Because you can hear about it, but then you see it and it becomes very much more real and you start to think about ways to try to help and be involved. We are privileged to have had that opportunity . . . We have recently come up with a grant that will help support groups like the Zaballeen here in Egypt: a $1 million dollar grant… will help support the work here in Cairo.”

Ezzat Naem Guindy, the executive director of the Spirit of Youth Association responded, “We are honored by the Bill & Melinda Gates Foundation for honoring us as Zaballeen. . . We will use these funds to build the capacity of our team, the capacity of our people, and to spread income generating projects and awareness such as the source segregation campaign . . . So that Garbage Dreams becomes a reality.”

Okay... more drama...

In the first 5 days, This Is It blew Hannah/Miley off the map to be the biggest concert film of all time worldwide. Finkebaugh and the others who foolishly bit deeply on the hype around this film - as though this hype was any different than the hype for every other film out there - are still busy trying to sell this as a disappointment.

Do people understand this... because it is not the first time I have brought it up. We are now responding to hype as though it is news and then attacking the news because "we" bought into the hype.

This Is It is now a lock to be the #2 documentary of all time, as it will pass March of The Penguins' $127m worldwide in the next few days. Only Fahrenheit 9/11 will stand in the way of it becoming the biggest documentary of all-time, with the $223 million cume likely too big a hurdle to overcome. Even so, when you start looking at DVD sales, much less record sales, this film is pretty much guaranteed to create more revenue than any documentary in history, probably tripling F/911's DVD sales at minimum.

How very disappointing!

Finkebaugh and others who have given themselves whiplash switching between ecstasy and mockery over the numbers for this film are still trying to cover their own asses. "CON ARTISTS!," is NIkki's headline, even though she and everyone else who covers this stuff had to know that an extension was inevitable... just as it was with the Miley Cyrus movie... and in that case, not very successfully. The domestic box office grew only 18.5% from the extension past the first 10 days.

"But it's not the biggest opening of all-time worldwide!" Waaaaa! "But the concert promoter selling this thing told us that it would have a $250m worldwide first weekend!" Waaaaaaa!

(ADDED 11:27a - A blog commenter smartly pointed out another hypocrisy. Isn't this a close relation to the winning scam that Paramount ran on Paranormal Activity... claiming that audience demand expanded the release when the theaters were booked months in advance? The big difference... the media felt like they were part of the win there and this time, they feel like suckers for having bought into AIG hype.)

And this is not just a single case. Bruno did about $140m worldwide... which was a lot less than Borat's $265m worldwide... but it still covered the $45 million that the movie was purchased for and put $32 million towards the publicity-heavy marketing campaign. A profitable film.

Does anyone talk about The Proposal grossing more and costing significantly less than Inglourious Basterds or Angels & Demons being the #5 worldwide film of the year or Up being touted as the movie that would mark the end of Pixar's hot run or that Confessions of a Shopaholic outgrossed Julie& julia worldwide?

The media isn't doing its job covering the box office, even if they are fighting like dogs in heat to get to the numbers FIRST.

And sadly, this is the canary in the media coal mine.

Anyone still pushing the idea of This Is It as a disappointment should be publicly ridiculed. Aggressively. You know, every movie gets greenlit with the hopes of it being a huge success. If studio executives took every producer/salesman on face value, then 99.9% of all movie are a disappointment. Transformers: Revenge of the Fallen hoped to get to the billion dollar mark. Disappointing. Ice Age: Dawn of the Dinosaurs is the highest grossing animated film in history internationally, but didn't even get to $200 million in America. Disappointing. X-Men Origins: Wolverine grossed $86 million less worldwide than X-Men: The Last Stand and cost about $70 million less. Still... disappointing. And of course, Harry Potter VI started a about 15% faster than any other Potter film but ended up being just the #3 grosser in the series. So very disappointing.

It is still true... hyping up the media sets studios up for harsh press if numbers are not as hyped. But the idea that the media is giving up responsibility for its reporting to publicists... not just accepting information, but choosing not to process the obviously-skewed information with any effort more aggressive than a rewrite of the facts or a little semantic pushback when we are somehow personally disappointed... it's horrible.

And let's not pretend it's innocent. "Projections by the studio were not met" is reporting a fact. "Disappointment" is claiming an emotion that reflects the intent to slap back at the feeling of having been set up for more. Plus, reporting what other studios are saying as though they are impartial observers is another remarkable break in trust with readers.

It is time for journalists - especially on the web, but hardly only online - to stop acting like publicists, so anxious about building audience that we don't act on our responsibility to readers to report and instead, try to serve them what we think they want. More hype.

This release will be updated within the next 90 minutes with international highlights:

“MICHAEL JACKSON’S THIS IS IT” MAKES MOTION PICTURE HISTORY AS THE HIGHEST-GROSSING CONCERT FILM OF ALL-TIME WORLDWIDE

BEHIND-THE-SCENES LOOK AT LEGENDARY KING OF POP TAKES $101 MILLION IN FIVE DAYS, BREAKING ALL-TIME RECORD FOR THE GENRE

--Release Extended Through Thanksgiving in the United States; Canada and Most Territories Around the World to Announce Extensions--

CULVER CITY, Calif., November 1, 2009 – Since Michael Jackson’s THIS IS IT was released October 28 in theaters worldwide, the late performer’s fans everywhere have responded, already making it the highest-grossing concert film of all-time with a worldwide total of $101 million and counting, it was announced today by Jeff Blake, chairman, Sony Pictures Entertainment Worldwide Marketing & Distribution. With an estimated gross of $32.5 million domestically and $68.5 internationally, the film’s worldwide take in just five days of release has surpassed the record previously established by Hannah Montana/Miley Cyrus: Best of Both Worlds (which had a lifetime worldwide gross of $71.3 million). Michael Jackson's THIS IS IT is directed by Kenny Ortega.

In response to the tremendous interest and desire to see the film around the world, the studio has also announced that it is extending its limited engagement. In the United States, the film will play through Thanksgiving weekend. Canada and most international territories will be announcing extensions of various lengths soon.

Also Debuting
The Boondock Saints II - Apparition - 0.27 - 68
London Dreams - Studio 18 - 39,700 - 51
Aladin - Eros - 17,500 - 56
The House of the Devil - Magnolia - 9,400 - 3
Skin - JDF - 6,300 - 4
Gentlemen Broncos - Searchlight - 5,200 - 2
Storm - Film Movement - 2,850 - 2
Looking for Palladin - Wildcat - 1,300 - 1

==========

"it is certainly not the posthumous blockbuster that the Jackson estate had anticipated."

Oy.

"My $90M all-in number looks like a pipe dream," one rival studio exec told me after the pic's weak bow.

Are you f-ing kidding me????

Are we going to start judging sporting events based on what Don King or Vince McMahon tell us they anticipate?

What delusional planet do people come from when they think that this movie was going to be so much bigger than it is? Instead of looking at the facts of what is, there is this crazy need to make it all about some people's wild fantasy of what it could be.

It is, by this hour, the second biggest first-run concert film of ALL TIME. Concert films - and almost every other one involves the actual concert experience and not bits and pieces slickly thrown together to offer an incomplete glimpse at what might have been - are not a huge box office business. Never have been. The reason I included the phrase "first run" is that Woodstock is thought to have grossed over $50 million after a decade plus of playing around the world in revival house after revival house. Of course, in this era, most of that gross is replaced by DVD sales and rentals, which will dwarf the $50 million figure, even in this DVD economy. If you want to use the other crazy stat of the week - the one that makes Paranormal Activity the most profitable movie ever - Woodstock is easy the most profitable concert film against costs in history.

Anyway...

This Is it is benefiting from a market that is afraid to release a movie over Halloween weekend, so there is no other wide release. (And indeed, it will pay a price tonight, as most other films will.) It is also being slowed a bit by not being able to expand its event feel with more IMAX screens, as only limited screens have been released to the film and in most cases, only after 9pm. And, of course, it is fighting the biggest problem there is for a film like this... everyone knows the DVD is coming and coming soon and that there is very little new material in this film... one song... which is already on the radio.

My guess is that this movie stops at $40m/$50m domestic... and that is a massive success. But then again, listen to Disney, which did $19m with the Jonas Bros phenomenon, or Paramount, which did less than $19 million domestic with U2 (back in the day), The Rolling Stones by Scorsese, and Neil Young COMBINED, or listen to The Weinsteins, who can tell you about doing less than $19 million with Madonna at the height of her music career and controversy career.

Yeah... This Is It is soooooo disappointing!

And this is from someone who, I'll remind, would not have seen the film were I not overnighted tickets from IMAX, thought the film was modestly enjoyable, and wouldn't push anyone to spend the time and money to go see the thing when there are quality small films out there to see in any major city.

I just hate the lie - and it is a lie, whether intentionally so or not... repeating someone else's falsehoods is not a form of truth telling - that this film is disappointing at the box office. It is going to do about twice what was a reasonable expectation. It will be the biggest documentary of the year by 3 or 4 times and the #3 doc of all time worldwide behind F/911 and March of The Penguins, having crushed Miley Cyrus' total international gross in its very first day.

This is truly a sickness. It is right along side, for me, attacking Obama less than a month after he got into office for failing to change the economy and now, less than a year into his presidency, trying to paint him as a failure for not already passing the most significant American legislation - health care - since LBJ.

Meanwhile...

We all must continue to applaud Paranormal Activity, which continues to outperform my expectations week after week.

I am still frustrated by the overhype, but in this case, it has pushed the ball up the hill to remarkable results. Does this kind of surprise success make it harder form something like This Is It? Obviously so. And as Drew McWeeny points out in SMF 7, Paramount did a great job of selling their marketing hook, that the film was driven by demand... when in fact, it was planned to go wide with theaters booked and ads bought, from the beginning.

But PA is not a new paradigm for marketing. It is a classic paradigm... well, "classic" when it works. And it has worked here, well executed, well timed, and kept far away from its true birthing room as an idea, Steven Spielberg's screening room.

Both of these films are remarkable successes based on high quality hype. But one has hyped its hype better than the other. The biggest difference in perception of the bottom line is that, not reality.

Part 1 | Part 2 | Part 3

There are sixty-seven $500m worldwide grossers in history and only Ghost, The Day After Tomorrow, Forrest Gump, Armageddon, Night At The Museum, I Am Legend, Hancock, The Sixth Sense, Star Wars, ET, and Jurassic Park qualify in that rarified grouping. Five of the eleven were Best Picture nominated. Only one won. But still…

The full column...

The chart...

I don't know. The New Disney is really, really not going to be The Old Disney... not even The New Old Disney.

It as though Bob Iger, who for years has seemed to be playing a very, very smart game of chess in reestablishing what Eisner and Katzenberg had built after they had allowed it to overmature and ripen into too many personal vendettas and self-reflections, has suddenly gotten God and is going to try to turn Disney 3.0 into a hard-driving future-focused leader instead of being a solid, sleepy, history-considering village.

There is something honorable about Iger and his new right-hand, Rich Ross, knowing their intent well enough to not bother keeping Miramax alive as anything much more than a non-theatrical brand. (That's what Battsek's exit suggests... and it also suggests more to come.) But there is also something a little bit scary about a company like this galloping so intensely and almost without any restraint towards an uncertain future.

I've been watching the well-curated, tremendous 4-disc Blu-ray packages of Up and Monsters. Inc. and it struck me yesterday just how different the Disney brand may be soon... how many more icons will be placed in the background of The Castle in years to come.

The only good thing about this news is that it will create an even greater vacuum in the art house distribution world... and no matter how tough things are, nature abhors a vacuum. But as small as a Miramax business should be at a company like D3.0, not having one is just not smart. The future of the film business is the ability to play to ALL fields, as the revenues for all filmed entertainment gets smaller. Studios that throw away $10 million a year here and $10 million a year there are setting themselves up for dangerous waters ahead. Take a look at the history of the 1960s in the business. Those who forget the past are condemned to repeat it.

But the idiocy around anyone calling This Is It "disappointing" is a classic and epic form of insider masturbation... all insiders... most journalists.

On Tuesday night - Thursday, the film will come close to matching the 3-day weekend opening of The Jonas Brothers: The 3D Concert Experience. Before this weekend is over, it will be the second highest grossing concert film in movie history with only the $65 million run of the Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour ahead of it domestically.

A $30 million domestic gross for this piece of kitsch history will be a massive success. It likely means $70m+ worldwide, which puts the film about $45 million away from profitability. The big question for Sony, in terms of profitability, will be DVD sales and record sales. And that DVD is more likely than most to sell strongly... at least in the 6 or 7 million range, which would put Sony well into the black before the record sales.

Who set this up to be a perceived failure? An overzealous press - which yes, includes Rush Finkebaugh - hyping this thing into the stratosphere... overconsidering the information offered by the electronic ticker sellers... trying to draw eyeballs to their various blogs instead of thinking.

And to be fair to Darling Nikki, it is not she who needs to be smacked for listening to Sony insiders who were mouth breathing about this film last week... even if she needs to go back to Journalism 101: Don't Be A Laydown, Use Your Brain. It is whoever at Sony told her that they were expecting the film to do better than the tracking and pre-sale based estimates. Dumb.

This is the opposite number to Paranormal Activities, where the media has tripped over its own feet to praise the grosses of the film. And indeed, a $15,00 production plus another minimum of $500,000 in finishing costs, millions spent to make prints, etc, is more impressive against a gross of over $50 million than this $60m investment in a concert film, album, and DVD. But it will still work out to be a good piece of business for Sony.

I guess that's not enough.