November 27, 2015
On the Insanity of Numbers
There are times when, if you strain your ears just enough, you might swear you’d heard the stupefied reactions of the gods of the English Lexicon as they racked their brains trying to decipher the latest vernacular distortion. I speak of course of Hollywood studios and their financial analysts, people who never cease to amaze in their ability to make what should be clear-cut into a verbal conundrum. In fact, it could be said that there has never been a
Hollywood studio or hedge fund
number-cruncher that couldn’t find a dark cloud in a silver lining.
The latest event to inspire the proverbial rolling of the eyes could be seen in practically every Sunday evening headline pertaining to the weekend’s box office results. Headline after heading, someone somewhere was proclaiming the opening of the final Hunger Games movie to have been “disappointing.” Apparently, its box office take was below analysts’ expectations, and in today’s results-driven society, that spells trouble. The reports all focused on the fact that the film had earned less in its opening weekend than its predecessors, a phenomenon that in the old days was what was expected of a sequel. Conventional wisdom back then said that a sequel would make 75% of the original, and box office results usually bore that figure out. Back to the Future II and III each made less than the first film, as did the sequels in the Lethal Weapon series. And the prequels to the first Star Wars trilogy saw ever diminishing returns, even as their quality improved. So why exactly did pundit after pundit press the panic button?
Perhaps it was because in today’s world, market expectations are given much more weight. A film is expected to make a certain amount of money simply because some mathematical formula or comparison with so-called “similar” films produced a number that sounded reasonable to investors and producers, and when the film didn’t pull in that amount, alarm bells rang. “Something has gone wrong,” they seemed to be saying. “The golden goose has failed to produce the golden egg, and now the sky is falling!”
Step back a moment, though. To those still panicking, I say, “Close your eyes, and take a deep breath. Let a moment of Zen calm your rapidly beating hearts.” Now let’s crunch the numbers. According to Box Office Mojo, The Hunger Games: Mockingjay – Part II pulled in over $102 million dollars in just three days. In the three days leading up to the big Thanksgiving weekend, it added an additional $33 million, for a supposedly “unimpressive” total of over $136 million. Oh, and did I mention that the film has made $144 million overseas?
This is not a bomb or a box office disappointment.
What this odd overreaction to good numbers seems to suggest is that
Hollywood studios and the investors,
producers, and shareholders that have a vested interest in their products now
have very unrealistic expectations of their product. They expect for each film
is a series to make more, not less, and I’ll bet there’s someone somewhere
proclaiming that the third Avengers movie will have the biggest opening in box
office history. Why? Because some complex computation told him it should. And if it
doesn’t, if it dares to have just the second most successful opening of all
time, someone’s head should roll.
It seems therefore that there is a new definition of a hit. It is no longer something that sells well or finds a large audience. It is all about the box office returns and whether at the end of the day the bottom line is red or black. I am not suggesting that this doesn’t make financial sense. However, when a movie can make almost $400 million worldwide and still be considered a disappointment, as the third Mission Impossible film did, something is clearly off. Budgets are out of control, and it’s becoming increasingly more difficult for films to be financial hits.
So, what exactly should we call films like Mockingjay – Part II and Spectre, ones that make money but have as yet not made a profit? Are they to be called “popular flops”?
I know, I know. I heard the groans from up above, too.