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2013 Box Office

After a slow start to 2013, it turns out that the sky isn’t falling for the box office. This summer has proven to be one of the biggest on record despite an unprecedented number of big budget flops earlier on in the year. Thanks to more hits than misses, summer 2013 is running ahead of last year’s by just over ten percent and is the highest it’s ever been at this point in the season according to BoxOfficeMojo.

Highest-Grossing-Movies-Summer-2013-Bravo-Design

By definition, the summer seasons runs from the first Friday in May through Labor Day, so there are five weekends left to beat 2011’s total gross of $4.4B. Listed below are the remaining movies for the summer 2013 slate.

What’re you most excited to see?

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The State of Entertainment: Part 2

The State of Entertainment (Bravo Design, Inc.)TV vs. Movies, Star Power and Alternative Content: The second in a two-part series on the state of entertainment in the current market where we examine the many challenges a film faces including the revival of television as well as digital content. If you missed part-one, click here.

Because of time constraints, a film must pack as much information and texture into each scene as possible while keeping the tempo of the piece brisk enough to retain the audience’s interest without overwhelming them. With the growing demand for elaborate plots and character development, television is quickly becoming a writer’s medium and not a director’s.

Alan Ball, director of True Blood, says, “It’s because you have hours and hours to tell a story whereas in a movie you just have two hours, and you have to simplify everything down to its pure essentials. I also feel that in America, at least, movies are all targeted at 15-year-olds, and there’s nothing wrong with that. They’re the ones that are buying tickets, but, as an adult, I feel that TV is a much more welcoming place for complicated adult writing.”

To mock television even a decade ago might have been fair. The networks offered low-quality content that were less than well received and syndicated the same programming formula year after year. But with the emergence of video-on-demand, upstart cable programming and a slew of various content offerings, the medium not only fuels instant gratification but is able to provide something for everyone.

A key difference lies in cost and feedback. If a consumer doesn’t like television program, he or she can change the channel at little expense outside of time invested. If that same consumer commits to a movie they don’t enjoy, they’re out the time and the price of admission with little chance of receiving the latter back.

Television shows carry storylines across seasons and develop complex plots and characters with histories that can evolve through time, and programming is agile. Shows adapt to changes in the real world, instead of languishing in studios for years after a project gets the green light, making play on current events taken straight from the newspaper.

Star Power:
As the average number of viewers per release is falling, studios have become increasingly dependent on tentpoles, movies that receive the most attention, the highest production and marketing budgets as well as the most favorable release dates. These serve as the primary means of support and compensate for less successful releases. Studios have also opted for rebooting film franchises, to hedge against failure and capitalize on established success, rather than produce entirely original work.

Indeed, inside Hollywood, stars are defined largely in terms of their bankability- that is, their ability to attract money to a project from outside investors. The studios know that stars cannot guarantee box office success (Unless you’re Angelina Jolie), but they can safeguard against the downside risk in the form of insurance.

The Expendables, a film directed by Sylvester Stallone that paid tribute to the blockbuster action movies of the 1980s and early 1990s, starred a dizzying array of veteran action stars from those decades and was a wild success. It made $103,068,524 in the US and $171,401,870 in the international box office, bringing its worldwide gross to $274,470,394. Its sequel is to be released later this year.

2011’s top ten grossing films consisted of eight sequels, a series revamped and one original computer animated movie. All of which are heavy in the special effects department. While the average moviegoer is quick to say that they value plot more than special effects, the latter typically yields significantly higher returns at the box office which the top ten list confirms.

Walt Disney Animation Studio’s Chief Technical Officer, Andy Hendrickson, says that visual spectacle drives attendance in a film’s first few weekends. In the past, a movie would stay in theaters for as long as a year. Today, the window is much shorter. “People say ‘It’s all about the story,'” Hendrickson said. “When you’re making tentpole films, bullsh–.” Hendrickson showed a chart of the top 12 all-time domestic grossers and noted every one is a spectacle film. Of his own studio’s Alice in Wonderland, which is on the list, he said, “The story isn’t very good, but visual spectacle brought people in droves and [casting] Johnny Depp didn’t hurt.”

Alternative Content:
When a consumer can legally stream movies on laptops or order them from video-on-demand services or even pirate them with high-speed Internet connections, soon after their release when they are still in theaters, it makes them less likely to pay for content. Technology is changing the rules of the film industry just as it did for the music industry.

Legislation like SOPA and PIPA have been tabled for the moment, but both sides of the argument will have to come together at some point in finding a resolution that protects copyright holders from online piracy. With growing interest from consumers to get movies and video content in different ways with different options and tickets on the rise, consumers are opting to enjoy movies at home without the cost and hassle of going to a theater.

Netflix is a prime example of innovation as it pertains to alternative content. Launched in 1997, the company started as a movie-by-mail service and now offers digital streaming. Within a short time after its start, the company began to eat into Blockbuster’s sales. Rather than charging per movie like its main competitor, Netflix used, and still uses, a monthly subscription model which allows for customers to rent, and hold onto, multiple movies simultaneously choosing from its 100,000 films via the website without late fees. Send one back, and Netflix sends the next from a queue of the consumer’s choosing.

Conceptually, from a studio’s point of view, buying a film should seem more appealing than renting it or downloading it illegally as purchases provide margins for the studios that are typically three times greater than rentals. The rise of Netflix, Redbox and video-on-demand rental services have severely cut into purchases, and the down economy has taken its toll.

Moving Forward:
The industry has gone through box-office slumps before but has always recovered. Hollywood’s highly anticipated 2012 slate includes: Men in Black III (May 25), Prometheus (June 8), The Amazing Spiderman (July 3), Ice Age: Continental Drift (July 13), The Dark Knight Rises (July 20), Skyfall (November 9) and The Hobbit (December 14) which will each look to beat the success of last year’s highest grossing movies: the final installment in the Harry Potter series, Transformers and Twilight franchises.

Movies have enchanted audiences for over 100 years now, and it’s no doubt that they’ll continue to in the future in its current distribution model or the next. If anything can draw people back to theaters, it’s the experience of being part of a captive audience of hundreds of people collectively submitting themselves to a totally immersive experience.

And while expanded content delivery and portable video options won’t necessarily keep crowds out of the theater indefinitely, what’s more likely to is a shortage of compelling content in theaters in favor of remake after remake. Ultimately, a truly original film of substance will be more memorable than the countless number of those filled with car chases and stitched together with explosions and/or attractive people, although the last certainly helps.

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The State of Entertainment: Part 1

The State of Entertainment (Bravo Design, Inc.)Entertainment – Movies and Their Role in America: The first in a two-part series on the state of entertainment that addresses the development of cinema in the United States amidst a global recession.

In the second century, Ptolemy discovered an imperfection in human perception. When viewing an image, once changed or removed, the retina retains the image for a fraction of a second. This is better known as the “persistence of vision.” In 1896, Thomas Edison presented the United States’ first motion picture screening in New York City using the rapid succession of individual images to form what people perceive as continuous motion.

Less than a quarter century later, Hollywood had become the world’s film capital. During the Great Depression, when a third of the nation’s theatres went out of business, Americans went to the movies to forget about their troubles. During World War II, the film industry contributed to the war effort by boosting morale and reminding Americans that they were united and committed to one singular purpose, the fight of tyranny. After veterans returned home from Vietnam, and even today, it addressed their difficulty in a soldier’s reintegration into society and empathized with the loss of idealism in combat.

For over one century, the movie industry has been one of the nation’s most important mediums for culture and entertainment. And from 1896 until now, the US has been at the forefront as the most prolific movie producers in the world.

Film is rooted in narrative and dramatic tradition in which the art of storytelling is a central concern. It’s a reflection of society that shows where it is presently as well as where it has been. While movies are different things to different people, it serves as a vehicle of sorts. To many, movies are about escapism. People want to get away. They want to be able to feel different even if that just means going to a theatre and watching a story unfold. Movies make us laugh and, sometimes, cry. They also educate. They tell us things we might not know or never could have known. They create controversy and tell difficult stories that inspire, heal, inform and empower us to deal with the unexpected and to imagine other possibilities.

But have they lost their appeal?

Consumer behavior has shifted as consumers attempt to rebound from the global recession and the onslaught of inflation. Higher food and gasoline costs combined with shrinking disposable incomes may be drawing people away from theatres towards less expensive and readily available forms of entertainment such as video-on-demand, the Internet’s user generated content and/or other digital media.

2011 saw yet another small decline for Hollywood. With ticket sales half a billion dollars behind 2010, research shows that 1.28 billion tickets were sold to North American moviegoers down 4.7%. Currently, the national average ticket price is at $7.96, and, as ticket prices continue to rise, filmmakers have been challenged in producing satisfying exhibitions that demonstrate that the price of admission is on par with utility gained despite the numerous other forms of entertainment made available.

Patrick Corcoran, spokesperson for the National Association of Theatre Owners, noted that the increase is “not way out of line,” and that prices are still below what they were in 1970 when inflation is factored in. Then, the average ticket price was $1.55 or $8.71 when adjusted for inflation. In reference to the drop in attendance Corcoran said, “People aren’t staying away because of ticket prices, they are staying away because of the movies.”

The Life of a Movie
Films open on big screens but have historically made the lion’s share of their money on small ones. After a four-month run in theatres, movies are made available on DVD, blu-ray, via video-on-demand and as digital downloads. Another window opens about six months later when films are sold to cable and satellite television companies. Sometimes, they’re sold to broadcast channels at around two to three years after the initial theatrical release.

In 2010, Americans spent $18.5 billion on all of the aforementioned, somewhere around 78% of its peak level, but only $10.6 billion of that was spent on cinema tickets. Social networking has sped up the word of mouth, turning teenagers and young adults into more discerning moviegoers, a phenomenon pushed along by rising prices, and the industry is battling a generational quirk.

In many developed countries, people have begun switching from buying to borrowing. Since 2007, the number of films rented in America has grown by 10% even as aggregate spending on home entertainment steadily declines. The steep decline in DVD sales has more than cancelled out growth in high-definition blu-ray discs and digital downloads. As a result, studios have pruned their output in favor of allocating resources to big budget blockbusters that draw moviegoers to theatres around the world. With movie output falling, truly independent filmmakers, who have lost not just home-entertainment revenues but also outside financing, are struggling even more than usual.

“It all boils down to the quality of the movies,” says Gerry Lopez, chief executive of AMC Entertainment, the nation’s second-largest theatre chain. “We just haven’t had those kind of movies that cut across all quadrants of age, race and income.”

Michael Lynton, Chief Executive of Sony Pictures Entertainment, agreed, “So far there is just nothing terribly compelling about what we’re delivering as an industry.” It’s an unexpected concurrence between two camps that have been at odds over changes in the business.

A positive sign can be taken from the fact that film may once again reign as the most popular form of entertainment around the world if the present decline lies in content quality rather than the medium or distribution model.

To read part-two, click here.