The American Film Market is under way in Santa Monica. Here are ten things Anthony D’Alessandro learned at AFM panels.
1. Theatrical remains king in the global marketplace, according to the panel “De-mystifying the Economic Implications of Electronic Delivery and the Recession on Film Performance”–with moderator P. John Burke Akin Gump Strauss Hauer & Feld LLP and panelists Harvey Weinstein and soon to be MGM co-head Gary Barber of Spyglass Entertainment–with an all time global box-office high of $29 billion in 2009, outstripping DVD sales, which have fallen 21% over the last two years. At the top of the talk, entertainment stat maestros Eric Briggs and Patrick Russo of the Salter Group presented a flurry of figures on the domination of theatrical and the reallocation of the home entertainment pie. “There is no greater experience than playing movies in theaters,” said Barber.
2. But you better score on opening weekend. Barber warned: “It’s like a parachute. If you don’t open, you’re dead.” Poor domestic runs can translate into dull ancillary revenues and overseas ticket sales.
3. 3-D is boosting theatrical revenues worldwide. “3-D is a big step to keeping people in the cinema,” said Weinstein. “You can’t replicate the experience of Avatar at home.” As to director James Cameron’s protest against the poor quality of Dimension’s summer release Piranha 3D, it was “good publicity,” insisted Weinstein.
4. The saving graces of the home entertainment revolution are Redbox, Netflix and video-on-demand. VOD, an ancillary that specialty players IFC and Magnolia are already tapping in sync with arthouse titles big-city bows, mushroomed by $3 billion in 2005 to $6 billion last year. Meanwhile, Redbox hit 1 billion rentals in its first five years versus Netflix which hit that mark in 10. All agree that digital delivery is poised to close the curtain on hard disc sales.
5. “The iPad for me has the greatest potential,” said Weinstein.
6. Weinstein disses U.S. broadcast networks: he wishes stateside TV networks would stop preferring “Jersey Shore” reruns over U.S. cinema product, which “overseas channels embrace.”
7. MGM’s chapter 11 bankruptcy is on schedule, said Spyglass’s Barber, who largely had to stay mum about his and partner Roger Birnbaum’s designs for MGM. They could take control of the Lion by mid December. “MGM couldn’t be in better hands than with Gary and Roger,” said Weinstein, who endured a strained distribution relationship with the Lion from 2006 to 2008, when TWC’s product fed MGM’s release slate, but crashed at the box office, except for the John Cusack thriller 1408 ($72 million).
8. Minimum guarantees are way down, said Weinstein, who stressed the need to capitalize on China, India and Russia’s growing markets.
9. Foreign presales, however, panelists agreed, are gaining over last year. (But they have a way to go to recover lost ground.)
10. Weinstein Co.’s fortunes are looking up. While Weinstein didn’t divulge details on how the Weinstein Co./Dimension has bucked the recession, a year ago the press was writing the company’s epitaph. In a dramatic turnaround, the mini-major ended 2009 with their second highest domestic haul, $205 million, since 2006. That figure came with some write-downs such as the $80 million Nine (luckily Relativity shared the cost) which grossed $53 million worldwide, and The Road, which barely made back its $25 million budget with a global take of $27 million. In the last year, the Weinstein Co. cleared its debt, tried and failed to reclaim the Miramax library and formed a co-production partnership with Icon UK. The Weinsteins’ ability to de-mystify the recession and live to see another award season is the story that should have been told to the salesmen at the Fairmont Miramar hotel yesterday.
[Photo of In Harvey Weinstein, Gary Barber, Salter Group’s Patrick Russo, P. John Burke, American Entertainment Investors’ Joseph Cohen, Salter’s Eric Briggs courtesy Getty Images.]