The Bottom Line Is Uncertain

Roughly halfway through the summer season, when the film industry records 40% of its ticket sales, the “how are we doing?” scorecard varies from studio to studio. But the one thought on every executive’s mind in Hollywood--regardless of how their films are doing--is “where are the profits?”

“The summer has had plenty of surprises and business has been incredible,” observes one major film company executive. “But no one’s really made any money yet.”

“It’s the same old problem: too many movies in the marketplace,” says Tom Rothman, production president at 20th Century Fox. “That forces excessive spending on marketing with not enough time for pictures to play out.”

By midsummer, attendance was slightly lower than last summer, but because 1998 ticket prices were slightly higher, it generated almost 10% more revenue. By Labor Day, the record $2.2 billion for the season set last year is likely to be toppled. It’s been a season more of solid hits than blockbusters and one that’s seen the return of popular family fare.

On the plus side: The victorious include a lucky comet that beat an asteroid to Earth (“Deep Impact”), a man who lives a life on television (“The Truman Show”), a combative young Chinese woman who goes off to war (“Mulan”) and a vet who holds conversations with animals (“Dr. Dolittle”).

All four films are $100-million-plus performers (“Mulan” and “Dolittle” will top $100 million this weekend) and will be big moneymakers in the U.S. Foreign runs, video and television sales will handsomely pad the bottom line.

Other good news: There has been no “Speed 2” or “Batman & Robin” so far--high-budget films that hemorrhaged money last summer.

On the down side: There has been no runaway hit this summer, no must-see film for all audiences like “Independence Day” or “Men in Black.” And barring a major surprise, there’s not likely to be one in the second half of the season.

(The well-reviewed swashbuckler “The Mask of Zorro” and the guilty pleasures of “There’s Something About Mary,” both of which opened this week, offered some promise, and Steven Spielberg’s upcoming “Saving Private Ryan” and Warner Bros.’ “The Negotiator” are both generating some buzz.)

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What’s ironic is that three of this summer’s biggest grossers will show only modest profits because of their excessive cost. They include a giant reptile who lays eggs in Madison Square Garden (“Godzilla”), oil riggers doubling as astronauts (“Armageddon”) and two aging policemen trying to outrun explosions (“Lethal Weapon 4”).

“Godzilla” is a genuine disappointment. The hoped-for-franchise will gross less than the surprise hit “Deep Impact.” (“Deep Impact” is expected to gross about $140 million, “Godzilla” slightly less than that.) “Lethal Weapon 4’s” production costs were north of $130 million, with at least $50 million additional from worldwide marketing expenses.

“Armageddon” will fare much better, since Disney won’t be sharing its profits on the film with talent as is the case with both “Godzilla” and “Lethal Weapon.” The Bruce Willis outer space action adventure could be the highest-grossing film of the summer with domestic box office that could be as high as $175 million.

What prevents it from being a certifiable blockbuster is the $200-million-plus price tag for the effects-laden film and a pricey marketing campaign.

“The thing about this summer’s business is that it showed that big, expensive movies better attract more than one segment of the audience,” says Amy Pascal, president of Columbia Pictures, which produced “Godzilla.” “There hasn’t been a movie so far that’s tapped into every quadrant of the population the way ‘Men in Black’ and ‘Independence Day’ did.”

With studios spending $30 million to $50 million to usher in the bigger summer movies into theaters (accompanied by even larger TV promotional tie-ins with major fast-food chains), there has been some notable backlash against overpowering sales campaigns. Naturally, the studios are blaming the media for paying too much attention to their selling efforts.

“The way the public is perceiving the market is changing,” cautions Paramount senior executive Rob Friedman. “What we did last year, we can’t do this year. What we did this year won’t work next year. We have to be sensitive to how much we can and can’t hit the public about product.”

Paramount and DreamWorks certainly spent money to raise awareness of their underdog disaster movie, “Deep Impact,” which got a jump start on summer with an early May release.

“It’s not that we were so subtle,” Friedman says. “But we chose our media mix differently so that people didn’t feel they’d been inundated.”

Disney, in sharp contrast to its “Armageddon” push, chose a below-the-radar approach to “Mulan” and with similar results to the “Deep Impact” selling campaign.

Though both Sony Pictures and Disney spun their box-office figures from “Godzilla” and “Armageddon” into a fury--before the films opened and afterward as well--the fact remains that summer (and year-end) spectaculars have gotten too expensive. These films are designed to be cash cows, not profit skimmers. Otherwise, how will the studios pay for the movies they release at quieter times of year, many of which never achieve break-even?

The biggest moneymakers of the summer so far are “Mulan” and “Dr. Dolittle,” which have played strongly with a wide audience. Even “The X-Files” movie, which largely preached to the choir at the box office, will undoubtedly be a keeper when it goes on sale on video. “X-Files” should also be popular overseas, especially Japan, says Rothman, who add confidently that it’s only the first of a number of “X-Files” features.

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A number of films did solid, if not spectacular, business this summer. About a dozen of the early summer releases are expected to gross $70 million or more, half of them topping $100 million. Films that did not reach $100 million but were significant attractions included “X-Files,” Robert Redford’s “The Horse Whisperer” and Harrison Ford’s “Six Days, Seven Nights.” The usual summer dictum that only mindless entertainment draws flies in summer was disproved by “Horse Whisperer,” and especially, “The Truman Show,” starring Jim Carrey.

There were some miscalculations. “Out of Sight,” Steven Soderbergh’s adaptation of the Elmore Leonard novel starring George Clooney and Jennifer Lopez, might have done better in the fall since it didn’t have the star-caliber power to withstand the grueling summer competition. It’s done only modest business despite reviews that were stronger than for any film this year except “The Truman Show.”

Family films have rebounded this summer. Audiences embraced “Mulan,” “Dolittle” (despite some questionable bathroom humor) and apparently to a lesser degree the recently opened “Small Soldiers” and “Madeline.”

General audience films had fallen into neglect recently, says David Vogel, who heads Disney’s three film production divisions. “Because they are concept-driven and not star-driven, family films get a bad rap,” Vogel says. “For a while they were a hot ticket and then they got to a point where they were disappointing.”

One big question this summer is, where are all the comedies? Other than the disastrous “Dirty Work” and Sony’s inconsequential teen effort “Can’t Hardly Wait,” comedy was largely absent from the screen (as were movies aimed at the teen market). “Everyone seems to have forgotten counter-programming,” Vogel observes.

There’s been such a paucity of broad-target funny stuff in theaters in recent summers that such wacky upcoming efforts as Disney’s “Mafia” and Universal’s “BASEketball” are virtually guaranteed to do some business in the coming weeks.