Curious case of film economics
Paramount Pictures Chairman Brad Grey is elated that his pet movie “The Curious Case of Benjamin Button” topped the Academy Award nominations Thursday with 13 nods, including best picture. But such elation could be tempered by a sobering reality.
Although Oscar honors can lead to an increase in ticket sales as moviegoers flock to theaters to see what all the hoopla is about, the boost may not be enough to help make “Button” a financial home run for Paramount.
The hurdles facing “Button” underscore how risky so-called “prestige pictures,” even ones showered with accolades, have become for the major Hollywood studios. Those movies, which aim to marry critical acclaim with mainstream commercial success, have long been a cornerstone in the film industry. Now, as the recession pounds Hollywood and DVD sales dramatically cool, such costly adult dramas are under harsh scrutiny.
“Against the backdrop of flat-to-negative box-office and DVD sales, these are the kind of indulgences the studio can’t afford to take on,” said Larry Gerbrandt, a principal in the media research firm Media Valuation Partners.
“Button” stars Brad Pitt and Cate Blanchett in an adaptation of the F. Scott Fitzgerald story about a man who ages in reverse. Not only did Paramount and co-financing partner Warner Bros. spend $150 million to make it, but the companies will also be laying out an additional $135 million to market and distribute the picture worldwide, according to a person familiar with the situation. Since the movie opened Dec. 25, Paramount has spent lavishly to promote “Button,” particularly on its Oscar campaign, which some industry executives estimate could exceed $10 million.
And with more than a dozen nominations to brag about, Paramount’s spending on “Button” will shoot up in the weeks ahead before the Oscars are awarded Feb. 22 -- especially as it goes toe-to-toe against front-runner “Slumdog Millionaire,” a small-budget film from Fox Searchlight without any Hollywood stars.
In the run-up to the Academy Awards, “Button” probably will benefit from an “Oscar bump” in ticket sales. At the same time it presents Paramount with a major challenge: For every dollar it spends on advertising, “Button” needs to earn $2 at the box office, because theaters keep half the ticket proceeds.
To date, “Button” has grossed $104 million at the U.S. box office and generated an additional $16.2 million in Australia and a handful of markets overseas. Warner Bros., which is releasing the film abroad, will roll out “Button” over the next few weeks in Germany, France, Spain, Britain, Japan and Italy. Warner’s international president, Veronika Kwan-Rubinek, said that by the end of February the movie would be playing worldwide. And Warner executives said they planned to capitalize on the movie’s Oscar haul to help sell it to foreign audiences.
“It is important to have great reviews and strong word of mouth,” said Sue Kroll, Warner’s worldwide marketing chief. She said the 13 nominations, especially those for best picture, actor and director, “adds a cachet that is immeasurable.” Another plus: Pitt’s movies, such as “Babel” and “Troy,” often perform better overseas than in the U.S.
But even with its forthcoming international take and eventual DVD sales, “Button” could struggle to earn a significant profit -- or even a modest one.
A person familiar with “Button” said Paramount and Warner Bros. would break even when the movie grossed $300 million in worldwide ticket sales and went on to perform at projected levels when released in DVD and sold to TV. But the estimates are based on projections, and the actual results could vary.
The perils of the prestige picture have been rippling through several studios. Twentieth Century Fox was disappointed recently when director Baz Luhrmann’s onetime Oscar hopeful “Australia,” a big-budget epic starring Nicole Kidman and Hugh Jackman, flopped at the domestic box office and was virtually shut out of Hollywood’s awards season.
Sony Pictures missed badly a few years ago with its expensive screen adaptation of “Memoirs of a Geisha.” And Paramount and DreamWorks’ dark drama “Revolutionary Road,” with superstars Leonardo DiCaprio and Kate Winslet, managed only three Oscar nominations, including one for best supporting actor. In limited release the movie has so far grossed just $6.2 million domestically. Paramount was hoping the film would get a best picture nod in time for its expansion this weekend.
Studios are increasingly pushing their smaller, lower-cost specialty films for awards, which can become much more profitable from the box-office bump triggered by a key nomination.
“Slumdog Millionaire,” a critical darling from Fox’s specialty film label, Fox Searchlight, that garnered 10 nominations, will undoubtedly now see its ticket sales jump. Many in Hollywood believe that the poignant movie, about a poor teen from Mumbai who becomes an unlikely contestant on India’s “Who Wants to Be a Millionaire,” has a chance to more than double its to-date current gross of $44.7 million when it expands this weekend to about 1,400 theaters from 582.
“Button” has been a high priority of Grey’s ever since he took over management of the studio three years ago.
The Paramount chief is close to Pitt, his former producing partner, who has a production deal at the studio. “Button” had been languishing in development at Paramount and elsewhere for many years and was never given the green light over cost concerns. Grey pushed hard to finally get the movie made.
“We’re all proud this ambitious film has touched audiences and the Academy,” Grey wrote in an e-mail. “In my judgment, everyone involved has outdone themselves.”