Slip Sliding Away: The Loss Of An American Movie Audience

Business is down. No matter what NATO proclaims, the box office globally is on a downward slope. This week I spoke to a couple of operators, both large and small. They all told me that the box office was hovering at a 9 percent drop since last year. This, of course, is not good, but at the same time not unexpected. The die is being cast and the worm is turning…and unless we move fast the fat lady is being picked up at her hotel so she can sing on stage.

This week Netflix announces that 40.7 million households watched Stranger Things in the first four days of release. A household in American equates to 2.57 people, so there is a high chance that 104 million viewers saw Stranger Things. Okay just for fun lets say these number were box office. Our good friend at NATO who take far too many surveys says that the average ticket price is $9.01. So we pull out our calculator and the number arrived at is $937 million. $937 million. Now in order to be fair, Stranger Things in total was around 8 hours in length, or 4 feature-length movies, or a box office opening of $237 (roughly) million opening each. Avengers saw a global opening of $1.22 billion.

If I look at the numbers needed by the studio and the circuits in order to sustain themselves and as well see the incredible financial brinkmanship that is taking place, I cannot see a way forward. Stick to the present financial model of ridiculously high budgeted motion pictures coupled with immense spending by Netflix and other streamers, thinking about the future, well it just gives me chills. The rules of the games have been drastically changed by the likes of talent agent packager industrial complex to a point where there is little chance that a model of sustainability and profit could ever be put in play.

Hollywood played footsie with the German Tax Shelters and then moved on the new money flowing out of China. Both did not do very well. The Chinese government issued a series of scoldings to would be emerging Asian movie moguls. In the summer of 2016, journals and newspapers were trumpeting the news that the Chinese were coming to Hollywood and bringing with them bag fulls of cash. By December 2016, The Financial Times hosted a headline that blurted out China’s Hollywood romance turns sour. China thought it could shape the perception of China by investing in Hollywood, but they soon found out that that dog bites and bites hard and often. Hollywood now is embracing streaming with a gusto that betrays a hint of desperation and the loss of the easy Chinese money.

Things have to change.

Binge-watching really took hold when the Steven Van Zandt helm-ed and the Norwegian produced Lillyhammer was unveiled to the world. The first season premiered on Norwegian NRK1 on January 25th, 2012 with a record audience of 998,000 viewers (one-fifth of Norway’s population), and then two weeks later, premiered on Netflix in North America on February 6th, 2012 with all eight episodes available in full for streaming on the service.

The series was scripted combining the use of both the Norwegian and English language. It ran for three years then Netflix canceled it, it’s eye is now a more attractive product. What was interesting is Netflix’s partnering with a Norwegian company on its first outing.

Norway has a population of 6 million, it is not a member of the European Union, is fiercely independent with a huge GDP in relation to its rather small population base. Norway is home to a booming film and TV industry. It produces a wide range of movies including the Monster movie Trollhunter (2010), to various art-house offerings. The thriller genre is well catered for, with Headhunters (2011) proving to be an international hit in the vein of other Nordic Noir epics. Last year 50% of Norwegians went and saw Norwegian produced movies. Now keep in mind the dominance of American productions globally, but if this number was transferred to the American market, the number would be reduced to 30%. The sad fact is that the Norwegian movie studios make movies for the Norwegian audience, at the same time Hollywood, that quintessential American dream factory has stopped making movies for America.

Hollywood has forgotten about it base and has advised its loyal audience that too bad so sad your perspective no longer factors into our storytelling. In many ways, the movies of today are distant and foreign and hold little context. In the 1980s, a golden time for both movie making and movie-going, the middle class was always somewhere in the center of the story. Marty McFly, Axel Foley, Ferris Bueller, and the gang from The Goonies all had backgrounds as well as personality traits that most of us could identify with. These were empathetic characters who allowed us to identify more closely to the story.

Tony Stark is described as a wealthy American business magnate, playboy, and ingenious scientist. Around Tony Stark is built the foundation of the Marvel Universe. I am sorry but I cannot identify with Thor, The Hulk, Black Widow or Dr. Strange. These people have on-screen lives that are completely foreign to me. The marriage between Hollywood is eroding, eroding because for the most part, Hollywood as a result of the need for a massive box office return, has forgotten its roots. Unfortunately for Hollywood, it’s American customer base seems to be returning the favor.

My strong suggestion is that theaters looking commission lower budget feature-length movies that speak directly to the America experience and with a 150-day window. These movies may not do great in New York or Los Angeles, but most of America does not live there. Go back to Stranger Things, it is connecting with its audience, its America audiences and theaters should take notice.

It’s time to re-invent the movie business (again). As an aside The Avengers: Endgame did $357 million first-week domestically. Better check those Stranger Things numbers again. The budget for all 8 hours of Stranger Things was $8 million and episodes or $64 million for 8 hours of fine entertainment. The budget of the Avengers: Endgame was reported as being $356 million.