THE MOVIES : SUMMER HITS: THE SEEDS OF VIDEO’S SPRING : ‘You want to time it so your summer hits are on the video shelves when there is the greatest demand’

‘When the causes of the Decline of Western Civilization are finally writ,” wrote Daily Variety four years ago, “Hollywood will surely have to answer why it turned one of man’s most significant art forms over to the self-gratification of high-schoolers.”

Variety, the daily diary of the Hollywood dream, was essentially chastising its own readers for pandering to adolescent tastes with films that were low in protein and high in saturated fats. Movies, especially summer movies, were feeding young minds a diet of graphic gore, repetitious science fiction and voyeuristic sex comedies.

All in all, Hollywood seemed intent on disproving the notion that youngsters today are smarter than ever.

However, in making its doomsday prognosis, Variety made one questionable assumption--that commercial film-making is a significant art form--and overlooked a couple of related trends. Although Hollywood would be the last to know, American demographics were skewing older. The pool of easy-to-please teen-age consumers was shrinking while adults of all ages were returning en masse to movies via their handy videocassette recorders.

“Video renters have always been a little older (than moviegoers),” says Meir Hed, co-owner of the Videotheque chain of video stores in Los Angeles. “They would wait for movies to come out, and watch them at home. They rediscovered the pleasure of movies through video, watching films that weren’t chopped up and interrupted by commercials. That got them going back to movies.”

Teen-agers are still a dominant force in the market--witness the lineup of “no-brainer” sequels coming out this summer--but the video after-market has dramatically altered the makeup of the industry’s consumer base and has prompted a basic change in the quality and variety of films being made.

Five years ago, the major studios were almost exclusively the manufacturers of teen-age toys. Adult-theme movies were left to independent film makers and boutique distributors, and summers were virtually conceded to people who were still growing up.

Pick a summer early in this decade and you’ll have trouble finding a film that didn’t include lasers, slit throats or giddy shower scenes. In 1983, Avco-Embassy was modestly rewarded for releasing Ingmar Bergman’s “Fanny and Alexander” during the summer, and a year later, Universal dropped John Huston’s “Under the Volcano” off at a few theaters.

It wasn’t until 1985, however, when another Huston film proved to the industry that a good adult-theme movie could do good business during the summer. “Prizzi’s Honor,” a sophisticated gangster comedy that also beat the odds against early releases getting Oscar nominations, grossed nearly $25 million.

Hector Babenco’s “The Kiss of the Spider Woman” and John Boorman’s “The Emerald Forest” also did well that summer, and the onus on adult-oriented summer films was lifted. Last summer, there were more than a dozen certifiably “smart” pictures playing in theaters and a couple of them--”A Fish Called Wanda” and “Bull Durham”--did some smart business for their distributors.

Some of the other films released last summer, unthinkable choices three or four years earlier, were “Married to the Mob,” “Tucker,” “The Last Temptation of Christ,” “Eight Men Out,” “Clean and Sober,” “Crossing Delancey” and “Midnight Run.”

Most of those films were R-rated, and those that weren’t were clearly not meant to appeal to kids. The distributors, driven by market forces that didn’t exist 10 years ago, were supplying two essential demands. They were providing movies for adults who go to theaters year-round, and they were putting into the pipeline titles that would be released on video the following winter and spring, when demand is greatest in that market.

“We have to very careful in terms of scheduling (films for theatrical release),” says Robert Klingensmith, president of Paramount Pictures’ very successful video division. “The video market has strong and weak seasons, too, and you want to time it so your summer hits are on the video shelves when there is the greatest demand.”

Art Murphy, who watches industry trends for Variety, says that the film business remains a hits-driven business and that the year’s biggest hits still emerge during summer, when 40% of the $4-billion theatrical grosses are accounted for.

“The films that you read about as having huge video sales, most of them are summer releases,” Murphy says. “Films that are big in theaters are big in every other market.”

“E. T. the Extra-Terrestrial” proves the point. Steven Spielberg’s sentimental tale about a boy and his pal from outer space became the most popular film in history when it was released in the summer of 1982. Last Christmas, when it finally made it to the video stores, it claimed the crown in that arena, too. MCA-Universal pumped 15 million taped copies of the movie into the video market with a retail price tag of $29.95. (Universal and Spielberg’s Amblin Entertainment reportedly each got $5 per tape, or $75 million each from the sale.)

We’ve come a long way from the days, not all that long ago, when the American studios released films in theaters here and abroad, milked them in second-run houses and drive-ins, then waited seven years for a handsome payoff for network airings on TV. The formula now is American and foreign theatrical releases, followed from six to nine months later by a video release, followed a few months later by a pay-cable release, followed a year or so later--if anybody cares--by release on commercial TV.

The Video Revolution has happened so fast that even those in the eye of the storm have had trouble predicting its course.

Klingensmith, who has been involved in video from its inception in the late ‘70s, says the most optimistic video analyst didn’t dream that video would be where it is today.

“Ten years ago, someone asked me where I thought it was headed,” Klingensmith recalls, “and I said that by 1985, there will be nine or 10 million VCR homes, and a film may do $10 million in sales. At Paramount, we’ve had 25 movies do better than that.”

The fact sheet on video, 1989:

--There are 50 million households with VCRs.

--The video industry now buys about $3 billion worth of videos from distributors each year and grosses an estimated $8 billion to $10 billion from rentals and retail sales.

--The film industry makes more money from its sales of films on videocassette than it does from domestic box-office rentals (about $2 billion a year).

--There are more video stores in America than theater screens (about 30,000 to about 23,000), and when you include supermarkets, bookstores and other businesses dabbling in video rentals, there are more than 50,000 outlets.

With most of those stores stocking more than 1,000 titles and carrying virtually every new major studio release, profitable sales are assured for all but the most stupendous flops. And even those find their way onto video shelves in some number (you’ll note there is always a copy of “Ishtar” and “Leonard Part VI” available).

Industry analysts say the surest trend ahead is the demise of the mom-and-pop video stores. Eventually, they predict, the video business--sales and rentals--will be dominated by five or six super chains, which themselves may become the targets of conglomerate entertainment takeovers.

In the meantime, the video market is having a major say in the kinds of movies the film industry turns out. It is true, as Art Murphy said, that the biggest hits in theaters become the biggest hits on video, but the ratio of their success, compared to less popular theatrical releases, is not as great. A hit movie that grosses $150 million at the box office will return about half that amount to the distributor in film rentals, and guarantee the distributor of a video sale that may net a third as much, or $25 million. Meanwhile, many films that gross less than $20 million in theaters ($10 million or less in film rentals) go on to earn much more in video.

That is why certain adult-theme films that would have been persona non grata from the summer schedule a few years ago are now routinely included.

Paramount, the studio with perhaps the best summer batting average of the last decade, released two films last summer--”Presidio” and “Tucker”--that made more money from video sales than from ticket sales.

“These films did not light up box office magic,” Klingensmith concedes, “but they are going to be terrific for us on video. ‘Tucker’ got exceptional reviews and some Academy Award nominations and the want-to-see on it is tremendous.”

Klingensmith estimated that Paramount would sell more than a quarter of a million “Tucker” tapes. The film brought in film-rental receipts of about $12 million, Klingensmith said, while the tape sale figured to bring in close to $15 million. He said “Presidio” will net about $13 million from video, compared to the $9 million it is estimated to have earned from rentals to theaters.

“Blockbusters in theaters are never as big in video,” Klingensmith said. “They’re strong, and they’re the leaders, but it is those 50 to 70 mid-range theatrical films that do exceptionally well in video.”

Even small films now have a chance of being a reasonably big hit on video. Movies like “Blue Velvet” and “The Last Temptation of Christ” with controversial themes that made them newsworthy far beyond their commercial successes are bound to be hot in video stores going one-on-one with the consumers who didn’t have the time or the opportunity to see them in theaters.

According to video-industry analysts, the video appetite for films is six times as great as that for first-run features. A person who sees one first-run feature a month is considered a frequent moviegoer. The average video consumer rents six movies a month.

“There is an appetite for every family that owns a VCR,” says one video distributor. “It’s like the plant in ‘Little Shop of Horrors,’ saying, ‘Feed me.’ We’re trying to make sure it’s fed.”