My favorite movie watching season

I always love the Fall, not for the changing leaves, not for the weather, and not for the chance to show off my sweater collection.  I love the Fall because it's the best movie season of the year.  The months from September to December is when all the distributors bring out their smart, adult, critically favored, award season films.  The summer is left to the kids and the action blockbusters, but over the next few months is when all the Oscar contenders will be released.  UP IN THE AIR, WHERE THE WILD THINGS ARE, MEN WHO STARE AT GOATS, THE IMAGINARIUM OF DR PARNASSUS are just a very few of the smart, cool, quality looking pictures that I'm looking forward to seeing over the next few weeks.

I have always assumed, and I believe it's conventional wisdom in the industry, that these kinds of films come out at the tail end of the year in order to remain in voters minds come Oscar ballot time, which is immediately in the new year.  The thinking is that any film that comes out in the early part of the year will be forgotten and overlooked compared to the more recent offering, regardless of it's artistic merit.  Aside from it being a sad commentary on the shortness of our memories I'm wondering if this is entirley true.  I'm taking a leap here and turning to the educted readers of MR for their feedback, but I wonder if like the proven business observation that when a second carpet shop opens beside the first it's competition, when a third opens it becomes the carpet district and is good for all of them.  Is there something about a grouping of similarly aimed films coming out all at once, even from competing distributors, that increases the box office for all as opposed to having them spread out evenly throughout the year?  I know I'm drawing a parellel between geography and the calendar, and perhaps that's a classic apples and orange mix, but I can't help but wonder if creating a film 'season' is not conferring a benefit to all the films that are released in this period.

the unusual economics of the film industry part II

Another aspect of the economics of the film business that I don't believe is common elsewhere is that you often find vast price difference for the same commodity.  In fact, if I'm not mistaken in most industries it's illegal to sell the same product at different prices to different buyers.  Yet actor salaries can vary drastically between productions, and I'm talking about prices for the same actor.  For example Jim Carrey routinely gets paid $20M to act in a big studio comedy, but will take a fraction of that amount for a edgy, thoughtful, smaller indie like "The Eternal Sunshine of the Spotless Mind".  I use Carrey as one example, but almost all of the major film stars routinely engage in the same practice.

What has always surprised me about this is not that motivation of the stars which I completely understand.  They want to stretch, do something more daring, take creative risks, put themselves in a film that could be an award winner, etc.  They don't need the money, so they are motivated by other factors.  What surprises me is that the studios accept the price differential so easily.  I have never heard of a studio executive saying, 'Wait a minute Mr Sandler, you say you want $20M for 'You Don't Mess with the Zohan' yet the entire budget of 'Spanglish' was less than that, how does that work?"  To be sure, there are constant negotiations between the studios and agents over star salaries, and this current recession has shown that even the top stars as are susceptible to the general economy as the rest of us.  However those negotiations are aways centered around how big the star's last picture 'opened', and previous pay scale precedents do not come into play.  A star taking a much reduced payday to appear in a smaller indie production doesn't seem to weaken their bargaining power.  There appears to be no risk to their next 8 figure pay check by very publicily taking a huge pay cut in the interim.  I think this is a good thing, especially for the indie filmmaker community, but it's curiosity to me nontheless.

“Friends” in Hollywood

You know the old saying about wanting a friend in Washington?  Buy a dog.  Well, it's entirely the opposite in Los Angeles.  Here, everybody has lots of friends.  It seems everyone is your friend.  Of course, I'm being somewhat facetious. The city is no more (or, in fairness, probably no less) friendly than any other big North American city.  My point is about the vernacular.  In Los Angeles 'friend' can mean business associate, someone you know, someone you met once, a guy you've had a couple of email exchanges with….Truly, people never say "I know someone over at Warner Brothers" it's always "I have a friend at Warner Brothers".  It's never "I know that director" it's "that director is a friend of mine".  Upon my first brush with this practice it irked me as I saw it as fake and disingenuous.  I assumed that people were bragging about who they knew and embellishing the truth.  However over time I came to realize that that wasn't actually the case, at least not entirely.  The word really has a different meaning here.  When people talk about 'friends' they often aren't really claiming to know that person socially, or that they see them on the weekends, or have their home number.  They would even be surprised if you made that assumption.  To them, when they say 'friend' they mean it and expect it to be understood by the listener as 'someone I know'.  It's taken on a more nuanced meaning in this context.  (Recently, I was mediating a disagreement between two parties and each of them said to me of the other, "Well, he's a good friend but…" when it was clear from their interaction that they were anything but.  In contexts like these it can be a very curious affectation that pushes the boundries of any normal understanding of the word.) 

We all know that different part of the country use different words ('soda' vs 'pop') and many industries have their own specific vocabulary.  I'm not sure which one of those two possibilities is at work here.  I'm curious if entertainment workers in New York use the work 'friend' in the same way it's done in LA or if people in LA who are not in the entertainment business (I hear there are a few of such people) use the term as I describe above?  Is it geographic or industry specific?

the unusual economics of the film industry

Per Alex's kind introduction yesterday, I'm his brother Nicholas and I'm guest blogging for the week.

I'm not an economist but if I have learned anything from my brother (and i have learned lots) it's that economics affects us all.   And i don't mean that in the obvious way that the economy affects us all.  I mean that the academic and esoteric economic theories that are studied in graduate university courses have a very real world and every day practical application.

One interesting thing that I've always found about the film business from an economic point of view is that unlike in any other business I can think of, the cost of manufacturing the product has no affect on the purchase cost to the consumer.  For example Honda can make a cheaper car with less features and cheaper finishes than BMW without losing all of their customers to the superior car because they sell their product for less.  You spend less to make something, you charge less for it.  Makes complete and obvious sense.  Not so in the film business.  I am an independent film producer and I make films that typically cost somewhere between $5M and $10M.  But when I make, say, an $8M film it has to compete at the same price level as the studios' $80M or $100M film.  It costs the consumer the same $12 at the multiplex (and whatever it costs to rent a DVD from Blockbuster these days) for either film.   There is no price advantage to the consumer for choosing to see a less expensive film.  This naturally makes it terribly difficult for smaller films to find an audience.  I find this quite fascinating and I can't readily think of another industry like it. 

A few years ago Edgar Bronfman Jr, during the time his family briefly owned the Universal film studio, suggested that theaters actually charge different admission prices for different pictures so those films that cost less to make had correspondingly lower ticket prices than the mega-budget studio pictures.   He was roundly ridiculed by the industry.  But truth be told I actually think the less-the-warm reception his proposal received had more to do with the fact he was an 'outsider' who had bought his way into Hollywood than on the actual merit of the idea itself.  Sound like good economic practice to me.