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Good article, thanks.

As a older male American, little at the video store interests me; chick flics bore, violence makes me squirm, political movies unreal and liberal.

Most movie scripts are puerile. Hint: Roger.

Americans have many other avenues of entertainment; DVDs, CDs, the Internet or dining with friends. Or, you wait for the DVDs and don’t rent it 3 months later because “the bloom is off the rose.”

So why go to the movies except for a foreign movie.

Don’t care. I’ll just buy video games. Cheaper per entertainment dollar per hour, respective of me as a consumer, characters that are totally into their work( they don’t live anywhere else ). As broadband continues to decrease, and bandwith expand, I look forward to new, blog like video from the great unwashed., without the overhead of the dinosaur movie studios. They, the studios, have had their day, time for them wander into tar pits of old industries. Destructive forces of high cost, low quality, unresponiveness to consumer tastes are doing their usual, soon releasing capital, labor, talent and immagination from this elderly media. The media is dead, long live the media!

Edward Jay Epstein the “Hollywood Economist” at Slate makes some different points:

1. Inevitably we will see theatrical release replaced by Video on Demand by Comcast and Direct TV; and direct releases to DVD through retail channels. People are not seeing movies in theaters anymore and Iger and others want to change the “window” system for DVD and Video on Demand release. Movie theaters are going away.

2. Attendance at movies declined continuously from 1948 to 2004; 4.68 billion in 1948 to 1.54 billion in ticket sales in 2004 even though population doubled during that period. From 1963 to 1973 weekly audience dropped from 43.5 million to 16 million (during a general economic expansion) despite films like the Graduate, the Godfather, 2001 a Space Odyssey, Bonnie and Clyde, Dr. Zhivago, American Graffiti, My Fair Lady, and others. “Quality” is not what the audience is looking for but broadly appealing films. People also want to see movies at home.

3. Studio revenue is UP year after year, mostly from TV sales, then DVD revenues. Box office only accounts for about 17% of revenue. However it’s the broadly appealing Spider-Man, LoTR, and Star Wars movies that cost a LOT to make and market but offer BIG returns. Indie studios like Lion’s Gate or Dreamworks mostly lose money; off-year for releases and they don’t have library sales to make money from and carry them through creative glitches.

4. “The Big Picture” blog has some interesting info that male 12-24 drive the big hits like Spider-Man etc; this audience demo will go out and spend for tickets, DVDs, ancillary games etc for characters and situations it really likes but will stay away from things it doesn’t like. TV by contrast is nearly totally female (sponsors want women because they do most of the purchasing). The male 12-24 demo and older is increasingly substituting gaming for movies and TV. Disquietiing trends: DVD sales are slowing dramatically, many movies are discounted (Bewitched went directly to Wal Mart’s $8 bin) and Wal Mart and Best Buy have due to channel domination critical input and control over movie content. In addition TV audience is fragmented and continually declining, particularly males who find little appealing on TV.

Based on all that I’d expect to see the various studio-less studios like Dreamworks (in the process of selling itself); Lion’s Gate etc be bought and folded into big studios as specialty divisions, and consolidation among studios from six to about three.

If all the money comes MOSTLY from big movies then the capital requirements along with the decline of the captive audience will bring about consolidation just like other over-capacity industries. Too many studios making too many movies that don’t make money due to chasing small and over-specialized audiences, not a good deal for investors.

The big problem is management. Unlike the old moguls who bridged both specialized knowledge of the creative process (they understood scripts, directors, stars, production) and general management skills, most of today’s execs are clueless about the creative process and so delegate key content decisions to people removed from incentives to make money. “Bewitched” being a case in point.

In short I don’t think this is political, but rather the extreme liberal viewpoints in movies like Dante’s “Zombies voting against Bush” movies reflect an industry wrongly focused on over-specialization and carried on easy TV sales money, unable to comprehend that the free ride is over.

Essentially, Detroit circa 1973.

I’ll just add a few remarks and keep this short.

I don’t think the “Prosumer” bit from Driscoll is on the money, I think it’s more Detroit circa 1973, being unable to respond to consumer needs.

People want in difficult times “fun entertainment” with real heroes and real villains. Hollywood is unable to see this demand or give the consumer what they want, so like Americans switching to higher-quality, more reliable Japanese cars in the 1970s onwards; people particularly men are substituting gaming (which itself requires lots of capital for development and marketing).

Look at the Medal of Honor series or SOCOM to see what guys want. Certainly not Syriana.

Also, check out Edward Jay Epstein’s “Why Hollywood makes Businessmen the villains” column.

http://www.slate.com/id/2131568/?nav=navoa

Karl Icahnn and others are pressing Warners and other big media companies to start showing better results; I would expect at some point the money is just going to stop in Hollywood. Not from the Long Tail extreme splintering or prosumer but simple substitution by folks like Electronic Arts who make better entertainment.

“1. Inevitably we will see theatrical release replaced by Video on Demand by Comcast and Direct TV; and direct releases to DVD through retail channels. People are not seeing movies in theaters anymore and Iger and others want to change the “window” system for DVD and Video on Demand release. Movie theaters are going away.”

I’m absolutely convinced that the end of theatrical will be the end of Hollywood. Why? Because at that point tv and movies will converge and all just become tv. Everything will be a made for tv movie. Also, I find Disney’s Iger drive to release dvds and theatrical simultaneously hilarious. After spending upwards of $40 at a movie theatre, who wants to spend another 20$ buying the movie? Anyway, what’ll happen is no one will go see the movie. A few people will buy the dvd but most will get ripped versions for 2$ from some guy on a street corner or your next door neighbor’s son. Or people will just pass around the dvd like a mix tape. It’s really wonderful. They complain about pirates filming movies from inside theaters, so they instead decide to give the pirates perfect versions of the movies! They cannibalize theatrical by shortening the window between theatrical and dvd then complain about the weakening of theatrical. Duh.