THE BLOG
02/04/2013 12:10 pm ET | Updated Apr 06, 2013

What Are We Gonna Do Now?

What a difference a brand new day makes. Labor Day 2012: in a movie world where we were looking at the smallest summer audience in almost 20 years, beginning with the early crash landing of John Carter, followed by Battleship running aground. Today, things are looking up. But it's not Mr. Lincoln, Argo or Seal Team 6 that's leading the way, or the sing-a-long cast of Les Misérables (tell the truth: didn't they seem ready to break into "Be Our Guest" when you saw the movie?). Their success is important on a certain level, beyond the box office grosses perhaps more because the Oscar nominations for Best Picture seem to reflect movies that people actually are seeing, versus just what the Academy members saw in the comfort of their screenings or screeners. The bigger reason for hope, however, is Kevin Tsujihara's appointment as chief executive of Warner Bros. Studios, as on a macro level it may signal the dawn of a future where studios' content and how that content is viewed is more closely connected with the audience.

Let's step back for a moment. After a somewhat sketchy summer movie season of 2012, where revenue fell for the first time in seven years and estimated admissions of 532 million were substantially below the 563 million of Summer 2005, itself a low point, the year ended on more of a high note for the business. According to the Hollywood Reporter, 2012 Box Office was up 6 percent in North America over 2011 with ticket sales hitting an all time high of $10.8 Billion--thank you Avengers, Bond and the Batman. Unlike past years, increased box office wasn't merely driven by increased ticket prices, as attendance at 1.36 Billion was actually up 6%, while ticket prices remained flat over 2011. And as Congress avoided its fiscal cliff at year end, the movie business' fiscal Niagara Falls, home entertainment, stabilized after seven years in the wilderness. Of course, sales of DVD's continued falling, but according to the Digital Entertainment Group, purchases of Blu-Ray Discs were up 10% (including a 25% increase in spending on catalog titles--finally) and electronic sell-through rose by almost 35%.

So it's finally all good, right, and we can show our faces at Morton's. Well maybe not there but does the way 2012 ended up mean that the movie business is finally a safe place to be and the studios might just keep it all rolling along for another 100 years? And while the movie business might not be a growth business, it's not a we're not dead yet business either?

It depends on what you like to read.

Because in addition to some big movies --11 pictures earned $200 million at the domestic box office, 3 broke $400 million and on a worldwide basis 3 pictures exceeded $1 Billion -- 2012 also gave us a nice end of the movie business as we know it reading list. In the LA Times, Neal Gabler wrote of Disney's purchase of Lucasfilm, " long ago Joan Didion lamented that in Hollywood the art of the deal had replaced the art of the movies, but at least she was talking about deals to make movies. What the Lucasfilm acquisition suggests is that the deals are a thing unto themselves and that movie studios are no longer in the movie or even the entertainment business at all. They are in the branding business." Gabler goes on to note, "it used to be that the movie created the brand, which is exactly how George Lucas built his empire. Now the brand creates the movie."

But it was ever thus. The movies have always relied on underlying material, books, plays, comics. Now video games, theme park rides and...books, plays and comics. In The New Republic, David Denby asks whether Hollywood has murdered the movies. "For years, the tastes of young audiences have wielded an influence on what gets made way out of proportion to their numbers in the population. We now have a movie culture so bizarrely pulled out of shape that it makes one wonder what kind of future movies will have." Following off of Gabler, Denby adds that "in time--a very short time--the fantastic, not the illusion of reality, may become the default more of cinema." For, "it has come to this: a movie studio can no longer risk making good movies. Their business model depends on the assured audience and the blockbuster," and therefore it is impossible to tell the films of one studio from another as "all the studios are ruled by...conglomerate aesthetics."

The thing is, the movies have always been a mass medium distributed in a mass way. It's not that different from retail, from Wal-Mart. Specialty stores have a tougher time of it, not unlike individual theaters. But the difference with movies is that, some evidence to the contrary, they're an individual product marketed to individual or group taste, less a brand and less a product like detergent where "new and improved" is all you need to say to reach your intended audience. And here's where one of the biggest issues facing the movie business comes into play. Because if we look closely at who is running the studios we see a fundamental disconnect with the audience. And yet, this shouldn't be a surprise as those who frequently go to motion pictures are the same as those who actively came out in the recent presidential election.

The Motion Picture Association of America defines a frequent moviegoer as one who attends a movie at least once a month (that doesn't seem that frequent, but we're talking about a business of perception). In 2011 in the US and Canada, frequent moviegoers bought 50% of tickets sold. Of this group, the largest number is in the 25-39 age group. Based on ethnicity, frequent moviegoers look like this: 10% are African-Americans (who represent 12% of the US population), 65% are Caucasians (56% of the population) and 24% are Latinos, representing 16% of the population. And if we take a look at who elected Obama, young people under 30, African Americans, Latinos, Gays and Asians all over-indexed in frequency of voting. Leaving white people over 50 voting for Mitt Romney. And our 113th Congress also reflects this electorate, with a record number of women, Latinos and Asians, the first openly gay senator, a Hindu representative, a Buddhist and the first openly bi-sexual person in the House.

Now, looking at the people who run studios, they look at lot like Mitt Romney voters, (even though in liberal Hollywood we know most didn't). And while our Oscar nominated pictures look more like the pictures the audience is seeing, the pictures and the people deciding which pictures get made don't really look like the audience. As Richard Brody noted in The New Yorker, "...the Oscars, more than ever, feel like reruns of the Presidential campaigns, with leading candidates and favorite sons (and daughters) and dark horses. It isn't the image or self-image of the industry that seems to be in play, but that of the country".

Which is why the lack of diversity in studio executive ranks is all the more curious. But this has long been an unresolved issue at studios. And it probably explains why we get pictures like "This is 40" that seem so divorced from the majority of the frequent movie going audience. Maybe its rather middling performance for a Judd Apatow movie suggests that the reign of the angst of the middle aged white guy is over. Adam Sandler (please refer to "Spanglish"), or the latest Apatow doppelganger (since we're talking about movies could we use doppelganger, schadenfraude and zeitgeist in the same sentence?) and their perfect homes with perfect kitchens, two dishwashers (in movie real estate we call this Nancy Meyers adjacent)--done. The fact is, but for ceding the African American film to Tyler Perry, the major studios are not making movies that reflect either the frequent movie going audience or for that matter the electorate.

Television is really much more democratic than the movies, "Girls" notwitstanding. And at times it's much more penetrating--10.4 Million people watched the premiere of "The Following" with Kevin Bacon. Translate that into box office and you've got a huge opening weekend. With its faster production cycle and viewing intimacy TV can address its audience more directly. Especially with the advent of DVR's, TV Everywhere and the erosion of appointment viewing. TV programing, and the executives behind it, are a lot more diverse than those at movie studios. All of the networks have very active diversity programs and significant numbers of executives with minority backgrounds in decision-making positions.

According to Robert Lloyd in the LA Times, "TV is the new rock. First it wasn't cool to like Neil Diamond, and now it is." Well okay, maybe not. But Lloyd is correct in noting that "once a fairly monolithic medium, in its subdivided formats and niche-directed multiplicity, [TV] caters now to myriad smaller but often more intensely dedicated audiences, inspiring a sense of ownership and of community reminiscent of the way pop music works." And if ever there was a business built on diversity, it's rock n'roll.

Structurally, TV is more in touch because it has to be. Movies are better at Magical Thinking and Wish Fulfillment. If you put Tom in it, they will come (in theaters, or in the downstream media afterlife), but if they don't well by then it's too late and you're on to the next weekend, until the music stops and they take the Chair away from your title. In television, if the show doesn't deliver it's usually quickly cancelled, and the promise of a better afterlife does not exist. And in this, TV can cut its losses and move on, whereas with movies you're always all in and there are no losses to cut. (As a side note, does "House of Cards" signal a movement in that direction, because by guaranteeing two seasons and $100 Million, Netflix has gone all in like a big studio feature, just so that viewers can binge on a whole season (where do people find the time))?

So now, why does Kevin Tsujihara's appointment as head of Warner Bros. mean something? It's not because it's revolutionary; after all, he's been an executive at the company 19 years. But as we ask ourselves if movies still matter, as "the momentum shift(s) towards television" (Michael Cieply, New York Times), Warner's selection of Tsujihara, the first Asian American studio head and someone who comes from running home entertainment, online distribution and video games, signals an acknowledgement of a changing world where the power lies less in those who control the production of motion pictures or television programing and more in those who can take the diversity of a studio's programming and deliver it to a diverse audience. In 2012 the new electorate spoke. Movies shouldn't be too far behind.

Kick over the wall 'cause government's to fall.
How can you refuse it?