Hollywood’s Death Spiral
Slate’s Edward Jay Epstein has written a fascinating article about the “secret numbers” used within the film industry to track revenue from theatrical, DVD, and other releases.
Consider how earlier this year entertainment journalists rattled on for months about a slump in the American box office—“Box Office Slump In Its 19th Week”—as if it were a sporting event in which the Hollywood studios couldn’t get winning hits. The story would have been different if they had seen the data on Page 16 in the 2005 Three Month Revenue Report. (Click here for that page.) Instead of a box-office decline, the studios actually took in more from the U.S. box office in the first quarter of 2005 ($870.2 million) than they did in the similar period of 2004 ($797.1 million). So even though the total audience at movie theaters declined during this period, this came mainly at the expense of independent, foreign, and documentary movies. For the Hollywood studios (and their subsidaries), in fact, there was no slump at all.
If you want to understand the dynamic forces reshaping today’s film industry, this is required reading.