TIME - Man of the Year/CompactPublishing-TimeMagazine-TimeManOfTheYear-Win31MSDOS.iso/moy/012092/0120460.000

Text File | 1992-10-19 | 5.5 KB | 115 lines

                                                                                SHOW BUSINESS, Page 59

Binge and Purge at the B.O.


Moviegoing zigzagged sharply in '91 as Hollywood waited out the
recession by talking cheap and spending big

By RICHARD CORLISS  -- Reported by Georgia Harbison/New York


    Movie moguls may see themselves as top-scale versions of
the Robin Williams character in Hook: middle-aged execs who are
Peter Pans at heart. But these days, they must feel more like
Steve Martin in Father of the Bride: footing the bill for an
endearing ritual whose costs have spun out of control. There's
just one difference. The moguls want everyone to come to the
reception.

    Last year not enough did. Most people waited for the home
video version. While Americans rented 4.1 billion cassettes (an
all-time high), they bought just under 1 billion tickets (the
lowest in 15 years). Audiences ventured out in spurts: last
winter, in early summer and then in a record-breaking Christmas
rush. Other times, they stayed home in droves.

    But if it was not the best of years, it was also not the
worst -- at least not in a time of recession. "I bet Silicon
Valley would happily trade years with Hollywood," says Martin
Grove, film columnist for The Hollywood Reporter. "So would
Detroit. So would the magazine industry."

    The industry's slump is cyclical, as is its minisurge.
"When times are good in Hollywood," notes Variety's Art Murphy,
"people get careless. They make films that shouldn't be made,
and these films turn off the audience. Then, when times are bad,
the belts get tightened, and that starts an upturn in quality.
It's binge and purge." Same with the moviegoer. A pinched
consumer is a picky consumer.

    But a pinched studio boss may not be a thrifty one. In
1991 box-office revenues dropped about 6.4% (to $4.7 billion),
but the average cost of making a picture increased 10% (to $27
million). And the hit films are often even pricier. "Hollywood,"
Grove says, "has lost sight of a basic economic equation:
box-office winners, which are few and far between, pay for
losers. Today a big-budget film is considered a success if it
simply breaks even. And that doesn't allow any way to pay for
the losers."

    Disney chief Jeffrey Katzenberg, who a year ago wrote a
memo urging more pinching of pennies and less coddling of
stars, is seen by some as a hero for pointing the way to
financing in hard times. (Variety called 1991 "the Year of the
Memo.") His approach seems to be vindicated by the Disney hits
Father of the Bride and Beauty and the Beast. "I wish there was
a mythical answer to why some movies do badly and others do
well," says Katzenberg. "Unfortunately, it all distills down to
one simple notion: when the movies are good, the audience will
come."

    Many movie analysts subscribe to this charming tautology.
(Moviegoers go to see good movies. What are good movies? Movies
that moviegoers go to see.) The Christmas hits answered a more
pertinent question: Who are the moviegoers? As usual, families
and the young. "In 1991," says Murphy, "a lot of films were
targeted to those over 25. But who've been losing their jobs
recently? The 25-and-ups. The danger is that the industry will
follow this yuppie generation right into the grave."

    The last of the Hollywood pashas -- making big-budget
films for the biggest audience -- is Peter Guber, grand pasha
of Sony Pictures Entertainment, which owns Columbia and Tri-Star
studios. Though Guber had the low-rent hit of the year, Boyz N
the Hood (which paid off its $5.9 million budget nearly
tenfold), his films are famous for their high price tags.
Terminator 2 cost nearly $100 million; Bruce Willis' Hudson Hawk
was a $55 million bomb.

    Tri-Star's Hook cost $70 million, with more still due, in
profit-participation deals, to director Steven Spielberg and the
film's four stars. On its opening weekend, the picture's grosses
were so lackluster that industry wags dubbed it "Hudson Hook."
But Hook has since flourished and may end up just behind
Terminator 2 and Robin Hood. That would make the average cost
of 1991's top three moneymakers a horrendous $72 million.

    So what's the moral? Guber would say spend what you have
to. "You have to look at it in a larger perspective," Guber
says. "This is a business; it isn't just called show. It's not
any film at any price at any time. It's the right film at the
right price -- and controlling those costs -- at the right time.
Obviously, you can't make Terminator 2 for the same price as
Boyz N the Hood. It would look like Term, not Terminator. And
it would star Arnold Schwartz, not Arnold Schwarzenegger." The
investment, in star lure and production values, paid off. "We'd
be foolish to apply a formula that says we can only make
pictures that cost $10 million," argues Guber. "No moviegoer
says, `I think I'll go down to the Criterion. I hear they have
a film that came in on budget.'"

    O.K., but we don't hear anyone saying, "Let's go see Billy
Bathgate. I hear it cost Disney a bundle." So why not just spend
less money? Partly because the movie industry is built on
dreams -- its makers' as well as the audience's -- and moguls
want to think like suzerains, not like CPAs. If they can have
fun spending way too much on a two-hour entertainment that will
cost the consumer only a few dollars, let them do it. And maybe
they'll get a few hundred million back. Moviemaking, after all,
is a show. It isn't just called business.