Hooray For Hollywood.THE line stretched well down the street -- kids and their parents waiting to get into the Crest Theater on Westwood Boulevard Westwood Boulevard is a street in Los Angeles that runs through the heart of Westwood Village and further south in West Los Angeles. Westwood Blvd begins south of Sunset Boulevard in the campus of UCLA as Westwood Plaza. to see a Sunday afternoon showing of the new animation hit, "Monsters, Inc." The stragglers were running to buy tickets (another line), and the real dawdlers hadn't even made it into the parking lot (another line). No wonder the well-reviewed "Monsters" broke the box-office record for an animated film debut with a jaw dropping $63.5 million during its opening weekend. I thought about that crazy scene at the Crest last week when I was at a Milken Institute forum on the entertainment industry. Predictably, much of the discussion focused on all that is wrong with Hollywood -- how the studios are creatively brain-dead and how places like Holland and India are choosing to come up with their own movies and TV shows rather than buy American. It's the Hollywood-on-the-ropes refrain -- again. Trouble is, it just isn't true, as borne out by "Monsters, Inc.", which was produced in the USA by the ever-creative Pixar Animation Studios Animation studio can refer to:
Hollywood is neither thriving nor dying. It's a mature business that's been forced to shift priorities in the interest of making more money for the conglomerates A Conglomerate is the term used to describe a large corporation that consists of diverse divisions. Conglomerate companies tend to be large multinational corporations with operations in multiple regions of the world. that now own all the major studios. So what's wrong with that? Movies are probably the best example of what's going on What's Going On is a record by American soul singer Marvin Gaye. Released on May 21, 1971 (see 1971 in music), What's Going On reflected the beginning of a new trend in soul music. . Up until a few years ago, studios were called upon to spend tens of millions of dollars a dozen or more times a year on features that wound up losing money. They counted on the occasional blockbuster block·bust·er n. 1. Something, such as a film or book, that sustains widespread popularity and achieves enormous sales. 2. A high-explosive bomb used for demolition purposes. 3. to recoup recoup To sell an asset at a price sufficient to recover the original outlay or to offset a previous loss. all those losses, a ridiculous business model since there's never any way to know which films hit and which miss. And yet, making movies represents an important component in a media giant's arsenal because films are valuable in ways not always measured at the box office. That means video sales, cable and network broadcasts, foreign distribution and merchandise licensing. The trick is to get enough folks to buy tickets during the first few weeks of release and also meet those ancillary revenue Ancillary Revenue Revenue generated from goods or services that differ from or enhance the main services or product lines of a company. By introducing new products and services or using existing products to branch into new markets, companies create additional opportunities for needs. The model is not risk-free for the studios, but it is risk averse Risk Averse Describes an investor who, when faced with two investments with a similar expected return (but different risks), will prefer the one with the lower risk. Notes: A risk averse person dislikes risk. . It makes the movie business behave more like a regular business. Those are fightin' words for the art house crowd, of course, which has come to believe that studios are unwilling to green light anything that would pass their creative muster TO MUSTER, mar. law. By this term is understood to collect together and exhibit soldiers and their arms; it also signifies to employ recruits and put their names down in a book to enroll them. . But as much as those art house types hate to admit it, a lot of people enjoyed "Rush Hour 2" ($224.7 million at the box office as of last week), "American Pie 2" ($144.4 million) and "Shrek" ($267.2 million). "Monster's, Inc." should do at least as well. It's always cool to beat up on the studios and goodness knows there usually is plenty of material to work with. But self-proclaimed creative types who wouldn't know a business model if it hit them in the rear can afford to whine about artistic integrity; a studio executive can't. Amid all the pressures and calculations, it's remarkable that more than occasionally Hollywood manages to entertain audiences for a couple of hours. Maybe that's why box office grosses are approaching $8 billion -- and have steadily risen each year since 1991. For all the griping, this is one industry that's not going anywhere. Mark Lacter is editor of the Business Journal. |
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