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Lucasfilm's Rick McCallum says DVD hurts box office returns.


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#1 of 148 DaveBB

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Posted October 17 2002 - 03:21 AM

Here is a link to an article from CNN.com where Rick McCallum talks about how DVDs hurt theatrical release box office returns.

'Star Wars' producer: DVDs hurt B.O.

What do you guys think about his comments?


#2 of 148 Neil Joseph

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Posted October 17 2002 - 03:24 AM

The interesting thing about this is that video sales are so high in fact that the sales take can often be higher than the box office gross of a movie.
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#3 of 148 Lou Sytsma

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Posted October 17 2002 - 03:34 AM

Riiight. The same thing was said about videotapes.

Last time I looked B.O. returns were higher than ever.

The real issue is for the movie industry to make movies well enough to get the repeat business.

And Rick here's some free advice: SFX alone does not a movie make.
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#4 of 148 Brajesh Upadhyay

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Posted October 17 2002 - 03:34 AM

McCallum is probably right. But studios are making a killing with DVD sales. Yep, some movies gross more on DVD than in their theatrical release -- case in point: "The Fast and the Furious".

In the end, studios are still reaping lots of money from theatrical showings, product shots/ads in the movie itself, DVD sales, tie-ins, pay-per-view/TV showings, DVD re-issues & the like.

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#5 of 148 Jason_H

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Posted October 17 2002 - 03:41 AM

Some of my favorite quotes:

Quote:
"I don't think there's a single movie that can survive on box office gross alone; it just doesn't exist anymore," says McCallum. "A theatrical gross can't hack it anymore, and the business is barely surviving right now. This is the biggest potential growth area that we have. Studios need it, or they're gone. They're on the verge of collapse anyway. They are not making money. Anyone who says, or thinks, that they are, is out of their mind."


Excuse me Mr. McCallum, you are really out of touch with reality. I think it is safe to say there are many of independent films out there that can get by just fine with box office gross alone since they make the films cheaply and don't throw $20 million marketing campaigns after them. If studios "aren't making money" (which I highly doubt), perhaps they should change their business model to release more films by young, fresh directors at $5-$20 million a pop instead of throwing $80-200 million at some hack director and then another $20 million in advertising to try and shove it down the throats of the public no matter if they like it or not. "You WILL watch Russell Crowe save the world, and you will like it!" Or, how about you actually reduce the ticket prices for theaters since they can no longer compete with DVD prices. Supply and Demand 101, people.

Quote:
"My passion about digital technology and the digital pipeline is just a small little brush fire," says McCallum. "This other thing is a tornado. The business will implode once you can download a movie, give it to your friends and not have a moral problem with doing it. Then we're screwed. Literally, our very lives are at stake now. George and I are just praying that we can finish 'Episode III' in time, before it's all over."


Yes Rick, we are heading for the apocalypse because of film piracy. OUR VERY LIVES ARE AT STAKE. And I'm sure that even with the many people that have downloaded Episode II over the last year, that it's really going to stop the DVD from selling a million, jillion copies. Give me a break. Posted Image

The studios are just as afraid and unwilling as the major record companies to embrace change, adapt their business models, and go with the flow. No big surprises here.

#6 of 148 JosephMoore

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Posted October 17 2002 - 03:59 AM

It is completely true that the bulk of a major studio release's profits come not from the theatrical release, but from the home video release and other ancillaries such as merchandising. At this point, for big blockbusters, the theatrical release is considered a giant advertisement for the video.

It is a distortion, though, to imply that home video sales cannibalize box office revenue. In fact, going back to the advent of VHS, this has proven to be exactly the oppposite.

Studios have gotten themselves into the current Blockbuster arms race. Why should anyone cry over their financial prediciament ? *They* decide whether to produce and release "Spiderman" vs "My Big fat Greek Wedding." Both grossed a lot of money, but only one cost a lot of money. You do the math.

Concerning file swapping: The film industry has the unique opportunity to look at how the music industry fumbled the oppportunity and do it right. If the path of least resistance is also the legal path, people will follow in droves. make it simple, make it cheap and we'll have no reason to "pirate." Make it cumbersome, make it expensive, and suffer the consequences. Do you think that they will do it right ? Doubtful at best.


#7 of 148 Chuck Mayer

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Posted October 17 2002 - 04:15 AM

I agree heartily with the last two posts. Well said. McCallum is up a tree if he thinks people are going to buy that. If the studios are in a bind (and they aren't), then it's one of their own making. People will go to see good films. That's proven year-in and year-out. His comments about digital piracy sound painfully similar to the RIAA's pathetic rhetoric. I will continue to go to theaters, and I'll continue to buy DVD's because I Like them in pristine quality, with the bells and whistles. Like CD's, my cash spent might drop as their ticket prices skyrocket ($7 for a matinee - guess I will only see the sure things).

And Rick, please do NOT use the word "moral" in an argument made to explain the possible death of the movie industry. It's a bit hypocritical. The entertainment industry will reap what they sow. If they are smart, they'll use the technology. If they are dumb, they'll fight it and lose. Because they certainly can't control it.

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#8 of 148 Joshua Moran

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Posted October 17 2002 - 04:25 AM

I think if they want repeat business they need to make better movies. The entire trilogy of LOTR cost $150 million. Felleowship brought in $300 million at the B.O. So stating that the B.O. isn't making money anymore is just way out of context. Make a crappy movie like Episode 1 & 2 with tons of eye candy but no pull and look at what you get back. Heck even Spider-Man pulled in alot more money then they ever expected. Why because it was good. But I will go see an independant film any day over a hollywood blockbuster. For the mere fact 9 times out of 10 they are better. Posted Image

Updated:

The original plan was to film "The Hobbit" starring Warwick Davis. But when Miramax balked at the $75 million dollar price tag Peter Jackson took it to New Line which gave him nearly $300 million to make the trilogy

Ok well even at that the 1st movie still paid for the entire trilogy. And according to imdb.com info it paid for itself in it's first week. Granted this doesn't account for marketing and so forth but still their are two more in the series coming and they are pretty much all profit at this point. I think Rick has a few screws loose.


#9 of 148 Jason Seaver

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Posted October 17 2002 - 04:38 AM

Quote:
Last time I looked B.O. returns were higher than ever.
They're also more front-loaded (good for the studios) and trying to recover higher production, promotion, and distribution costs. Remember when Terminator 2 costing nearly $100M was considered absolutely mindboggling?

Quote:
The real issue is for the movie industry to make movies well enough to get the repeat business.
But even good movies don't get repeat business. As an anecdotal example, I only saw Minority Report (my favorite American movie so far this year) once, the same number of times I saw Swept Away or Van Wilder. Knowing that it would be out on DVD within a year was absolutely a factor in not seeing it a second time. I'm not complaining about this, mind you - it means I get to see a much broader range of movies in the theater; I don't have to choose between seeing a great movie one more time because I may never get another chance and seeing a possibly good movie at all. It's a very rare movie that gets significant repeat viewing these days.

Of course, this can be traced back to VHS, especially once sell-through became popular, and not just DVD. DVD is just good enough that it can be (to some) an acceptable substitute for theatrical exhibition, depending on the quality/environment of the local theaters. To me, the solution to that "problem" would be improving theaters - 70mm and IMAX projection, AMC's aborted "monthly pass" program, more ushers on duty doing more to enforce theater rules, adding restaurants and gamerooms like Sony's Metreon in SF, and otherwise doing more to give people a reason to see a movie in the theater either for the first or nth time.

Of course, I'm not sure this is a problem; even if it's not necessarily possible to recoup the entire investment from theatrical exhibition, the total intake is still higher, more movies get made/released, and individual moviegoers get to see more.

And as to some of McCallum's more incendiary comments: If you're so worried about piracy, distributing movies in a digital format is not the best way to discourage it.
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#10 of 148 Vince Maskeeper

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Posted October 17 2002 - 04:39 AM

The headline of this article should have been:

"Lucasfilm's Rick McCallum Looks for excuses why Star Wars prequels don't live up to box office expectations, blames DVD."

If you read between the lines here, Rick is basically whining that not enough people are excited about the product he is making to warrant the expense of making it. My goodness. Can you imagine me complaining because I was a rubber-dog-poo manufacturer and I made rubber-poo that cost $100 a unit? It silly for me to complain that not enough people want $100 dog poo as if it is their fault.

That's a fact of life in the capitalistic model: you don't just create a supply and take the demand for granted (and then find fault in the consumer when there wasn't the deamand you wanted!).

Boo-hoo, you can't make souless nonsense and throw 100 million dollars at it and just assume the world will be begging you for it.

Yawn.

Maybe Lucasfilm can sue the moviegoing public (like Mr. Show's COUPON: THE MOVIE).

I think this once again screams the reality of the industry: Time is ripe for a second UNITED ARTISTS to arise and drive down filmmaking budgets making "indie" films with real distribution. I could totally see a smart studio coming along and negotiating a stronger deal with exhibitors (actually allowing them to meake a fair percentage on the films they show) and making solid films without paying $20 million to single actors. When your budget is exceeding $40 mil before a single frame of film is shot- something is terribly wrong!

Exhibitors would carry these films because even with 1/2 the BO take, they still stand to actually make more money than they can with Blockbusters-- and the only element left is asses in seats. Time has shown that simply telling a good story takes care of that part.

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#11 of 148 streeter

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Posted October 17 2002 - 04:57 AM

Anyone who knows about Rick McCallum probably knows that he's full of it.
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#12 of 148 Terrell

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Posted October 17 2002 - 05:04 AM

Why am I not surprised this turned into a prequel/Lucas bashfest.

Quote:
Last time I looked B.O. returns were higher than ever.


Ticket prices are also higher than ever, with just a mere fraction of the movie-going audience that existed 20 years ago. Not necessarily agreeing with what McCallum stated. Just stating the obvious.

Quote:
The entire trilogy of LOTR cost $150 million.

Where in the world did you get that number? You'll have a very hard time getting me to believe each one of these films only cost 50 million to make.

#13 of 148 JosephMoore

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Posted October 17 2002 - 05:04 AM

To be fair, McCallum is a pretty smart guy. I haven't read the article in question, but in another instance he intimated that a THX Home Theater would probably provide the most superior viewing of Episode II.

He's dissappointed, he's scared and he suffers from the same myopia that any "insider" would .. and being a Lucas ranch-hand is like being an insider's insider.


#14 of 148 Terrell

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Posted October 17 2002 - 05:11 AM

Quote:
but in another instance he intimated that a THX Home Theater would probably provide the most superior viewing of Episode II.


I'm not a McCallum fan, but what else would you expect him to say?



Quote:
He's dissappointed, he's scared and he suffers from the same myopia that any "insider" would


Maybe you can introduce me to him sometime.Posted Image

#15 of 148 Lou Sytsma

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Posted October 17 2002 - 05:16 AM

McCallum comes off like a sports team owner who want the taxpayers to pay for building a stadium - while signing a .200 hitter for 20 million a year.

The problem is not with the audience but from within the industry.

Sure ticket prices are higher Terrell but I'm reasonably sure that more tickets are being sold as well.
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#16 of 148 JosephMoore

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Posted October 17 2002 - 05:18 AM

Terrell,
I found it curious that in one instance he bitches about home theater hurting box office receipts but in another he admits that it is probably a superior experience.

BTW, I don't need to be his neighbor to intimate from his comments. ;-)


#17 of 148 Peter Kim

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Posted October 17 2002 - 05:37 AM

This fellow, along with GL, is livin' in an ivory tower. He seems to conveniently excuse the quality of the new round of SW movies as a variable in the entire formula which determines how well a movie will perform.

Quote:
"My passion about digital technology and the digital pipeline is just a small little brush fire," says McCallum. "This other thing is a tornado. The business will implode once you can download a movie, give it to your friends and not have a moral problem with doing it. Then we're screwed. Literally, our very lives are at stake now. George and I are just praying that we can finish 'Episode III' in time, before it's all over."

Please be my guest. After the vacuum GL has created with his marketing monolith, the void that they leave behind once they exit will hopefully be replaced by a resurgence of filmmakers that are more, no IN TOUCH, with the audience.

It's apparent to everybody that a perpetual comparison is performed when discussion of Peter Jackson and George Lucas and their respective franchises arises. This is apparent because there couldn't be a further divide between how the two filmmakers treat (respect) their audience.

If GL wouldn't have such a siege mentality and selfish mindset, that his films are his and only his films, perhaps the SW phenomena wouldn't have been reduced to kiddyfare and digital sleight of hand.

Peter Jackson has forced the audience to reconsider what is acceptable in creating for benefit of the audience. Namely, creating a trilogy that will be released in consecutive years. Also, evident from Ron's reviews, along with other online reviews, there seems to be an supreme enthusiasm espoused by Peter Jackson to provide the best dvd in a timely fashion for his audience.

GL?...well, first of all, look at his hording of the orginal trilogy. 2nd, the only box set that GL will release this year is a fullscreen box set of the first two episodes, without any additional material. Not to even mention how he pimped out the original trilogy on VHS to extort every little penny from the fanboys.

Rick says dvd hurts box office returns? Looks like GREED has crippled his vision.

Quote:
George and I are just praying that we can finish 'Episode III' in time, before it's all over."


Posted Image Posted Image Please take your idle threats and leave. But given their true inspiration, greed, I somehow believe we haven't seen the last of GL & co.
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#18 of 148 Craig_T

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Posted October 17 2002 - 05:45 AM

“I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”
—Jack Valenti, president, Motion Picture Association of America (MPAA), April 12, 1982.


It's been 20 years since these brilliant words were first spoken, why aren't films dead yet?

#19 of 148 JosephMoore

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Posted October 17 2002 - 05:51 AM

Peter,
While I'm a vocal critic of Lucas' directorial skills and misguided vision of film-making, I have to say that your rant on his "greed" is probably off-base.

Anyone who knows anything about GL knows he does what he does out of a passion for it. I had the pleasure of meeting him one time when he happened to be getting a "back-stage" tour at Disney Animation, Orlando. He was about the nicest guy you could hope to meet.

Sure Lucasfilms/LucasArts et. all are big businesses in a big industry, but Lucas' core development team is clearly concerned about more thanjust the almighty dollar.


#20 of 148 Peter Kim

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Posted October 17 2002 - 06:06 AM

Quote:
While I'm a vocal critic of Lucas' directorial skills and misguided vision of film-making, I have to say that your rant on his "greed" is probably off-base.


And I believe probably not.

Quote:
He was about the nicest guy you could hope to meet.


Hollywood folk. Public face, private face? While I too would have been somewhat starstruck, his public persona has nothing to do with his recent tarnish as a filmmaker, on the business or creative end.

Quote:
Sure Lucasfilms/LucasArts et. all are big businesses in a big industry, but Lucas' core development team is clearly concerned about more thanjust the almighty dollar.


All 'beliefs', all conjecture. I certainly don't doubt his passion during the creation stages of SW. I do question his priorities once filmmaking has completed.

As I've stated, we've got two giant franchises currently vying for public attention. As a result, it's easy to contrast the treatment accorded to the audience.

Wouldn't you agree that one could intimate from the business decisions that while Jackson is sharing his vision, in all of its comprehensive glory, GL is primarily concerned about capitalizing on his vision?
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