How painful was this summer for Hollywood?

Guardians of the Galaxy tops summer 2014 box office

Guardians of the Galaxy tops summer 2014 box office

With weak performances at the US box office over the course of the this summer, it’s not a surprise that the final box office total gross from May to August is only $4.1 billion. That is 15% down from summer 2013 ($4.75 billion) and the lowest total since 2006 ($3.37 billion). And if we adjust for higher ticket prices and estimate the number of tickets sold, we end up with the weakest summer since 1992, when we had 400 million admissions compared to this summer’s 500 million.

These grim figures have sent pundits scratching their heads this week, trying to figure out what went wrong, and some reaching  foreboding conclusions, predicting the end of the Hollywood as we know it and suggesting that kids are so preoccupied with video games and social networking in the comfort of their bedrooms that they have neither the time nor the energy to make the journey to cinema theatres. These gloomy predictions sound like a plot from a dark Hollywood movie, but do they match reality?

Numbers don’t lie, but let’s not forget that unlike last summer, when we witnessed the slaughter of gigantic blockbusters, such as White House Down, After Earth, Pacific Rim and The Lone Ranger, this summer was relatively bloodless. Bruised and wounded from last summer’s calamities, Hollywood studios have tightened their belts, eschewed originals and deluged the market with it box-office safe sequels. The strategy has paid off. There wasn’t one single tentpole flop this summer and all the sequels, except Expendables 3, which was a victim of piracy, made a profit. So where is the problem?

For a start, for the first time since 2001, none of these sequels grossed more than $300 million in the box office. Perhaps there is indeed a sequel fatigue, because audience flocked in droves to see an original blockbuster, The Guardian of The Galaxy, which topped the box office with $253 million and is predicted to pass the $300 million mark. Hence, it’s reasonable to suggest that had Pixar released its new originals, Inside Out or The Good Dinosaur, this summer, the box office would’ve fared better.

In fact, this summer didn’t offer any of Hollywood’s mega-franchises, with several studios pushing the release of their flagship movies to next year, such as Fast and the Furious 6, Avengers: Age of Ultron, Jurassic Park reboot and Fantastic Four. With titles like these, the box office is sure to rock and roll.

Of course, there could be other factors that kept the audiences away from theatres this summer. With football becoming popular in the US, millions of Americans were glued to their TV watching the World Cup in late June and early July, the hottest summer time for Hollywood movies. Furthermore, wars in the Middle East and Ukraine may also distracted moviegoers with the daily supplies of gruesome images that movies don’t dare show.

But the most pressing question is: Is the US box office still relevant with nearly 75% of the global box office intake coming from the international market? In fact, Hollywood is so reliant on overseas markets that it invest more in selling its movies there than in the US. Hence, a 15% fall in total gross is a small drop in a big ocean. With production cost down and expanding international market, Hollywood continues to be a profitable enterprise.

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China is on the path to take the lead from the US in the box office

Since its release 4 weeks ago, Transformers: Age of Extinction, has racked up over $850 million in the global box office, breaking the record in China where it grossed over $280 million – 65 million more than in the US, where it drew $215 million.

This is not the first time that the Chinese box office has beaten the North American one. Last year, The People’s Republic saved sci-fi Pacific Rim, which had cost $190 million to make, from a certain commercial failure, infusing its coffers with a much needed $111 million, after it had eked out only $101 million Stateside. Impressed by the movie’s triumph at the Chinese box office, Warner Bros, the producing studio, decided to make a sequel, with production due to commence next year. Evidently, the potential commercial success of a project in China and other foreign markets is increasingly becoming the impetus to greenlight it in Hollywood, regardless of its projected performance in the US market.

Indeed, in the last few years, international markets have surpassed the North American market, making up over 70% of the total global box office gross, according to the Motion Picture Association of America (MPAA). Consequently, this commercial reversal has precipitated a fundamental change in the movie-making business in Hollywood.

In the past, studio bosses relied on their gut feelings and the feedback of their development departments to greenlight a project. Recently, however, development executives have ceded their power and influence to the  international marketing and publicity departments, who have taken center stage in greenlighting a project, based, not on its creative or artistic merit, but on its potential commercial profitability in major international markets, such as China, Russia, Latin America and the rest of Asia.

This shift has lead to a surge in production of big-budget, special-effects driven blockbusters, that are filled with superheroes and waring monsters, and to a palpable decline in making dramas and comedies, prompting cinema critics and filmmakers to charge Hollywood with dumbing the masses with its superficial and inane movies that lack substance and artistic integrity.

The problem, Hollywood executives say, is that dramas and comedies rely heavily on dialogue, which doesn’t translate well in non-English speaking markets, hence their feeble box office performance often fails to cover their production cost. In contrast, the stories of the big blockbusters are told with extravagant action and digital effects, which transcend the boundaries of language, nationality and culture.

In its pursuit of luring the the broadest audience overseas, Hollywood also endeavors to feature foreign characters, played by international actors. Hence, these days, we often see Chinese, Indian, Russian and other Asian characters in major roles that don’t conform to the negative stereotypes of the past, when the good guys were invariably white and foreigners filled in for the bad guys. In fact, Hollywood has become so sensitive to Chinese sentiment that it doesn’t dare show Chinese characters in negative light and responds swiftly to Chinese concerns, even if that entails changing the film’s story. Last year, the antagonists in Red Dawn were digitally altered from Chinese to Northern Korean following a protest in the Chinese media.

In addition, blockbusters are increasingly being speckled with further Chinese elements, such as merchandise and story subplots, even when they are completely irrelevant to the movie, in order to pique the interest of the Chinese audience. Last year,  a Chinese space station was featured in the Oscar-winning Gravity. And the Chinese version of Iron Man 3 received an extra subplot featuring a Chinese doctor treating Iron Man with acupuncture. Needless to say, both films swept the box office there.

Speaking at San Francisco International Film Festival last year, director Steven Soderbergh argued that Hollywood was not making cinema anymore but producing commercial movies for public consumption, because “cinema is a specificity of vision, and isn’t made by a committee, by a company or by the audience.

Granted, but one should not overlook the positives in this new development, because it’s evident that Hollywood is no longer a centre for promoting the virtues of the white American and vilifying everybody else, but rather has become an international hub where all nations, races and cultures are respectfully and fairly presented and where negative stereotypes of the “others” are fading away, thanks to the producers’ efforts to study and understand the cultures featured in their movies before they embark on making them, lest they hurt anyone’s feelings and consequently lose their box office tickets. Hence one could counter-argue that Hollywood is actually being enlightened rather than dumbed down.

In spite of these noble efforts, Hollywood is still struggling to penetrate a fiercely protectionist market such as China, which often takes steps to safeguard its local productions by the permitting only 32 foreign movies to be exhibited there in one year and by giving them unpalatable release slots. Hence Hollywood studios have resorted to forming partnerships with local companies and filming in China itself, as the director of Transformers, Michael Bay, did, shooting parts of the picture in Hong Kong, casting Chinese star Li Bingbing in a key role and partnering with the country’s largest distributor and film promoter, China Movie Media Group.

One studio, DreamWorks animation, was able to pave its way into the Chinese market, thanks to its business savvy and politically-connected chairman, Jeffrey Katzenberg, who announced three months ago the opening of DreamWorks Oriental in Shanghai. Having been monitoring the explosion of the Chinese market in the last decade, Katzenberg is confident that it will overtake the US market in the very near future. “It’s obvious,” he enthuses. “They have $1.5 billion consumers, which is $1.2 billion more than the US, so you can’t take these figures lightly. Of course, we want to be there. The Chinese people love Hollywood movies and we will cater to their need.”

In fact, there is a broad agreement in Hollywood that China will take the lead in the global market within less than 5 years, which should not be a surprise, considering that 13 cinemas are being opened every day there. Hence, it’s not inconceivable that we could see a Chinese superhero in a Hollywood blockbusters in the near future.

Paranormal Activity 4 scares off competition at the US box office

Paranormal Activity 4

Horror sequel Paranormal Activity 4 shot to the top of the box office in the US and abroad with ease, scoring $30.2 million and $26.5 million respectively for a worldwide debut of $56.7 million. The low budget film has failed to match up to its predecessor Paranormal 3, which opened to $52.6 million in the US last year, but it ‘s still an enormous profit generator considering it cost only $5 million to make.

Critical darling, Ben Affleck’s political thriller Argo held to the second place, drawing $16.6 million for a domestic total of $43.2 million. It was followed by the 3D animation Hotel Transylvania, which took $13.5 million. The film was ranked 4 in the international market with $14.5 million for a total of $68.3 million.

In the meantime, Liam Neeson’s starrer Taken 2 dropped to the 4th place in the US and second overseas, earning $13.4 million and $23.6 million respectively. The thriller has grossed $301 million worldwide.

A new thriller Alex Cross, starring Tyler Perry as the fabled Washington D.C. detective popularized in James Patterson’s book series, landed in the 5th spot with $11 million debut.

Animation movie Madagascar 3: Europe’s Most Wanted, which has been playing overseas for 20 weeks, scored 3rd, eliciting $14.9 million, lifting its international total cume to $482.9 million.