Studios Gunshy on Sequels as Franchises Fail to Wow

Sony Pictures isn’t quite ready to swear off “Charlie’s Angels 3.” Nor has Universal Pictures definitely decided to abandon its car chase series “The Fast and the Furious.”

But corporate Hollywood, stung by a run of huge budgets and softer-than-hoped-for showings in its peak summer season, has begun a palpable shift in attitude regarding yesterday’s sure thing: the sequel.

One telltale sign of the mood swing was a radio spot that 20th Century Fox used to promote the debut of “The League of Extraordinary Gentlemen” this weekend. Quoting a reviewer, the ad trumpets: “In a summer of sequels, finally a ride worth taking.”

Fox isn’t alone in sensing that the audience is changing gears. With near unanimity, top-level executives and filmmakers queried in the last week describe an industry that is suddenly less confident in the automatic success of its so-called franchises -- highly visible pictures that invite rapid-fire follow-ups.

No studio appears to be pulling the plug on major projects in the works, or to have articulated a radical shift in strategy based on what has so far shaped up as a disappointing summer. But the tightly wired film community, in a moment of rare introspection, is clearly searching for new ways to shore up a device that became its favorite moneymaker in the last few years.

“If there was any hubris or arrogance to the industry’s approach, it’s that we got accustomed to believing ‘build it and they’ll come,’ ” said Marc Shmuger, vice chairman of Universal Pictures. “What we’ve seen this summer is that movie audiences are declaring their independence of thought.”

The most troubling performance to date has been that of Sony’s “Charlie’s Angels: Full Throttle.” The picture, which cost $144 million to produce and tens of millions more to market, opened to just $37.6 million in ticket sales its first weekend, then rapidly fell off in the face of torrid competition.

Sony executives say the film’s strong foreign ticket sales are far outpacing its U.S. box-office receipts, and total revenue may well exceed that of the original. Those results might even justify another “Angels” installment. “It’s too early to tell. I’m watching closely and hoping it will make sense,” said Amy Pascal, chairman of Sony’s Columbia Pictures unit.

But Pascal agrees with her peers that the audience is talking. “You can’t rely on formula,” she said. “You have to look at what’s working and what’s working is stuff that’s fresh.”

Hollywood’s current case of nerves grew over the Fourth of July holiday with the big -- but perhaps not big enough -- opening of the hugely expensive “Terminator 3: Rise of the Machines.” The independently financed action saga, which cost about $175 million to make and more than $50 million to market, has taken in about $110.5 million since its release by Warner Bros. on July 2. This weekend, however, ticket sales dropped more than 55%, meaning the climb toward profitability for the picture’s various financiers will be tougher than hoped for.

Other softer-than-expected sequel performers include New Line Cinema’s “Dumb and Dumberer,” Paramount Pictures’ “Rugrats Go Wild,” MGM’s “Legally Blonde 2: Red, White & Blonde” and Universal’s “2 Fast 2 Furious,” which opened to an impressive $50.5 million in ticket sales, but fell off precipitously.

The economics of those pictures vary widely and all may ultimately turn out to be moneymakers. “Legally Blonde,” for instance, had a relatively modest budget for a star vehicle. “It’s going to be very profitable,” MGM Vice Chairman Chris McGurk said. But all the pictures have shown a worrisome degree of financial strain.

Perhaps that shouldn’t be surprising, given the unusually high number of sequels that hit the marketplace at once. According to a tally by Exhibitor Relations, this year will see the release of 23 sequels, a contemporary record, up from 19 last year and just nine the year before.

That count is likely to drop to as few as 15 next year -- a sign that Hollywood’s bout of “sequelitis” actually began to ease months ago, when production decisions for 2004 films already were being put into motion.

Any notion that studios will back completely away from serial films, with their tempting guarantee of instant identity, runs counter to history. “Beware of Blondie,” released by Columbia 53 years ago, was, after all, the 28th picture in a series that far outlasted the likely span of contemporary blockbuster franchises such as Lucasfilms’ Fox-released “Star Wars” cycle or Warner’s “Harry Potter” series.

Hollywood became sequel-crazed in recent years after the old rule of thumb -- that follow-ups usually do 60% of the original’s business -- flew out the window with such hits as “Austin Powers: The Spy Who Shagged Me,” “The Mummy Returns” and “Rush Hour 2.” And, the success of the “Star Wars,” “Harry Potter” and “Lord of the Ring” series have made the franchise business that much more alluring.

Several studios are already locked into expensive bets very much in the mold of this year’s crop of high-budget sequels. Those include Columbia’s “Spider-Man 2,” which is budgeted at $200 million and is set for release next July 2; DreamWorks’ “Shrek 2,” for which the studio is already running full-page ads though its release is still a year away; Paramount’s “Mission: Impossible 3”; and Warner’s “Harry Potter and the Prisoner of Azkaban” and “Scooby-Doo 2: Monsters Unleashed.”

Yet executives are clearly searching for ways to avoid the traps that snared so many of them this summer. “Audiences are very wise,” warned Fox movie Chairman Tom Rothman, whose “X2: X-Men United” was one of the clear winners among summer sequels.

In their next round of choices, studios appear far less likely to follow up on a hit unless they can beat the vicious cost spiral that has become typical of the sequel game. Major stars and filmmakers routinely demand major salary increases for repeat performances, while executives try to buy some “insurance” by ramping up costly special effects and stunts. The escalated spending requires that the second or third film in a series beat the performance of the first -- something that hasn’t happened so far, at least in U.S. theaters, with this year’s sequels such as “Charlie’s Angels” and “2 Fast 2 Furious,” among others.

“Certainly a lesson to be learned is: Don’t make sequels that cost twice as much as the originals,” said Nina Jacobson, production president of Walt Disney Studios. “You’re basically betting double or nothing that twice as many people want to go see your movie.”

Industry veteran Joe Roth said his Revolution Studios still expects to make a sequel to its action hit “XXX,” but only if the picture costs no more than the original.

“It’s a fallacy to think that just because you had a big hit movie, that your audience is going to grow,” Roth said.

In a subtler twist, Rob Cohen -- who directed both “XXX” and “The Fast and the Furious” but isn’t the director of either sequel -- said he believes increasingly savvy fans are quick to reject perceived phoniness or mercenary considerations. “Today’s audiences, in my opinion, are so alert and so aware of the agenda behind the poster,” Cohen said.

Indeed, Hollywood’s toughest challenge is likely to be the difficult business of designing its franchises in a way that makes each film in a series feel new.

Pixar Animation Studios turned that trick in 1999 with its “Toy Story 2,” which created new characters and thrust Buzz Lightyear, Woody and the gang into an expanded world. Taking another tack, Warner’s “Harry Potter” and New Line’s “Lord of the Rings” series have stayed fresh by adhering to the evolving story lines of their underlying books, creating what Warner President Alan Horn calls “organically derived” sequels.

Sony was less successful when it tried to freshen “Charlie’s Angels 2” by pumping up the action and sex appeal in hopes of attracting young men to its girl empowerment movie. “We expanded the age group from teenagers well into young adults, but we didn’t necessarily skew more male,” acknowledged Sony Pictures Vice Chairman Jeff Blake.

One of the more intriguing conundrums in Hollywood’s development pipeline is a contemplated sequel to DreamWorks’ 2000 hit, “Gladiator.” To follow its own Academy Award winner, the studio would have to be particularly inventive, because the bar is high -- and because the first film’s hero, played by Russell Crowe, died in the end.

To chase a Best Picture with a highly original sequel isn’t without precedent: Francis Ford Coppola followed “The Godfather” two years later with “The Godfather 2,” and won the film industry’s top honors both times. But audience behavior of late has provided a sobering reminder to the makers of “Gladiator.” “You can’t will a hit,” said Doug Wick, the film’s producer.

Growing creative and fiscal discipline may revitalize Hollywood’s roster in seasons to come -- unless, of course, the next two or three sequels on the schedule happen to do blockbuster business, sending the current panic into reverse.

Coming out of the gate Friday is Sony’s “Bad Boys II,” the follow-up to a relatively low-budget 1995 film that grossed about $66 million in the U.S. If the far more expensive sequel does well, the future may yet look a great deal like the past.

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Encore! Encore!

Below is a list of sequels released this summer or due later in 2003 or in 2004.

SUMMER SEQUELS

(U.S. grosses to date)

Biggest winners:

“The Matrix Reloaded” (Warner Bros.): $274 million.

“X2: X-Men United” (Fox): $213 million.

Less impressive:

“2 Fast 2 Furious” (Universal Pictures): $122 million.

“Terminator 3: Rise of the Machines” (Warner Bros.): $110 million.

“Charlie’s Angels: Full Throttle” (Sony Pictures): $82 million.

“Legally Blonde 2: Red, White & Blonde” (MGM): $63 million.

“Rugrats Go Wild!” (Paramount Pictures): $37 million.

“Dumb and Dumberer: When Harry Met Lloyd” (New Line Cinema): $25 million.

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MORE TO COME

Sequels yet to be released this year:

“Bad Boys II” (Sony Pictures) -- July 18

“Lara Croft Tomb Raider: The Cradle of Life” (Paramount Pictures) -- July 25

“Spy Kids 3-D: Game Over” (Miramax/Dimension) -- July 25

“American Wedding” (Universal Pictures) -- Aug. 1

“Freddie Vs. Jason” (New Line Pictures) -- Aug. 15

“Jeepers Creepers 2” (MGM) -- Aug. 29

“Once Upon a Time in Mexico” (Sony) -- Sept. 12

“Scary Movie 3” (Miramax/Dimension) -- Oct. 3

“The Whole Ten Yards” (Warner Bros.) -- Oct. 17

“The Matrix Revolutions” (Warner Bros.) -- Nov. 5

“The Lord of the Rings: The Return of the King” (New Line) -- Dec.1

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Sequels already scheduled for 2004:

“Exorcist: The Beginning” (Warner Bros.) -- Feb. 6

“Dirty Dancing Havana Nights” (Artisan Entertainment) -- Feb. 13

“Scooby-Doo 2: Monsters Unleashed” (Warner Bros.) -- March 26

“Mission: Impossible 3” (Paramount Pictures) -- May 21

“Harry Potter and the Prisoner of Azkaban” (Warner Bros.) -- June 4

“Riddick” (Universal Pictures) -- June 11

“Shrek 2” (DreamWorks) -- June 18

“Spider-Man 2” (Sony) -- July 2

“Mad Max: Road Fury” (Fox) -- July 23

“Alien Vs. Predator” (Fox) -- Aug. 6

“Oceans 12” (Warner Bros.) -- Dec. 10

“Bridget Jones: Edge of Reason” (Miramax/Universal) -- Undated

“Agent Cody Banks 2” (MGM) -- First quarter, undated

“Barbershop 2” (MGM) -- First quarter, undated

“The Bourne Supremacy” (Universal Pictures) -- Summer/Fall

Source: Exhibitor Relations Co./ Los Angeles Times