And with three 3D features queued up, Jeffrey Katzenberg predicts 2010 will be the company's biggest year
The ‘Monsters’ $58M Rip-off
The New York Times' Monday report on the weekend box-office grosses suggests that the populist outrage directed against the AIG bonuses might find a new target in CEO of DreamWorks Animation Jeffrey Katzenberg.
The story of how "Monsters vs. Aliens" took in $58.2 million on its opening weekend sounds less like a success when you take note of the inconvenient facts. Even though only 2,100 of the 7,000 screens the movie opened on were equipped with 3D technology, reports Brooks Barnes, the 3D screenings "carried premium prices of up to $4 above the standard admission. So about 30 percent of the screens delivered 56 percent of the gross."
Those numbers aren't false, but they are inflated.
Pumped up by premium ticket prices, the grosses for "Monsters vs. Aliens" are, like the money made by now-tottering banks and investment firms, made by picking the pockets of average-income Americans -- in this case, the families who make up the audience for DreamWorks Animation.
Parents who take their kids to the new 3D animations probably don't discover until they're at the box office that they're being charged an extra $2.50 (the surcharge I shelled out for "My Bloody Valentine” in Times Square) -- $4 per ticket. And then they're on the spot, not wanting to disappoint their kids but on the hook for an extra $10-$16 for a family of four.
Let's say, though, that they know about the surcharge because they'd taken their kids to see last summer's "Journey to the Center of the Earth" or "Coraline" earlier this year. Those moviegoers have already paid for their RealD glasses. But because theaters are not offering a two-tier admission price allowing people who have already purchased glasses to simply buy a standard-priced ticket, they're shelling out for glasses all over again.
A piece by Richard Verrier in last Thursday's Los Angeles Times makes clear the money at stake here.
There are 40 3D features scheduled for the next three years, including 17 from Disney -- which, through Roy Disney's Shamrock Holdings, has invested $50 million in RealD, the company that pioneered the new process -- and every release from DreamWorks Animation. And though the credit crunch has slowed the installation of 3D projection systems in theaters, RealD's revenue nearly doubled in 2008.
With so much Hollywood money bet on the success of RealD, with investor money tied up in the conversion of theaters to 3D projection systems, studios need the films released in the process so far to show big profits.
How better to do that than to add a surcharge which inflates the box-office numbers? And to ensure that moviegoers pay that surcharge every time they go to a 3D movie.
Many of the upcoming 3D movies are family films. And at a time when the economy is so bad that going to the movies has become a luxury many families can't afford, Jeffrey Katzenberg is displaying lousy business sense by putting already strapped families on the line for an extra $2.50-$4 per ticket per movie.
Theaters that lease the RealD process (for about $5,000-$10,000) have to pay the company 50 cents for every ticket sold. But even allowing for that and, it's fair to guess, allowing for the manufacturing cost of a pair of plastic glasses, the studios are obviously making money off the surcharge.
Katzenberg, John Lassetter at Pixar, and the other studio heads who will release movies in RealD are simply indulging in the carny barker tradition of squeezing whatever money they can out of the public who flocks to their attractions. But they've chosen the worst possible time to do it, and because they are selling a family product, this naked grab to inflate profits and protect their investment seems particularly venal.
The studios should immediately drop the surcharge for 3D movies or, at the very least, allow people who hold on to their glasses to pay regular price.
Otherwise, to an already enraged public, Katzenberg and his colleagues may find themselves regarded as so many non-Hollywood execs already are: schmucks who soaked the public for their financial gambles.
Comments
Anonymous Says
Your an idoit looking for attention.
Chris Says
Mr. Taylor, Your above argument is fundamentally flawed for a few reasons.
1. It costs approx. an additional $15mil to author a stereoscopic film. The studio thereby has the right to pass along this cost to the consumer for what could be considered a premium experience. And I would be willing to venture a guess that number doesn't include all the R+D that happens behind the scenes to make the overall 3D experience more enjoyable.
2. The audience always has a choice, and in this case, they have spoken with their wallets. Even in this abysmal economic climate, many moviegoers gobbled up the chance to see the film in 3D. I dare you to show me a parent who, if suddenly surprised with the surcharge at the boxoffice like you suggest, wouldn't tell Timmy he would just have to deal with good ole 2D. (This is clearly evidenced by Suzette's comment above. She just outright didn't go.) The movie business is in fact a business. Studios have the right to charge whatever they like for people to view their product in a theater, and the public has the right to punish them if they go to far by simply staying home. (Believe it or not, there are still things out there like books that can entertain a bratty tot.)
3. In Suzette's example, it would have cost her family of four $56 for admission to the film. How much would it cost for her family to go to an amusement park for the day? A very low end estimate of $30 per person still makes a 3D movie a bargain. Heck, even a trip to McDonald's for a family of four eating conservatively will run you around $25. The list can go on and on demonstrating how going to the movies is still one of the most economical means for a family to have fun.
4. Comparing the release of a 3D family film to the scandalous and daunting actions/recklessness of AIG and the like is purely absurd and an example of the use of exploitative journalism t generate controversy and hopefully hits to your blog. Everyone has the right to voice there opinion, but if you want it to be taken seriously, you need some kind of factual backing.
Tony Robertson Says
Our two theaters that show 3d had both Monsters in 2d and 3d all day long, at both theaters. So even if you didn't understand that the 3d film costs more, you could still wait an extra hour or so to see the 2d version. If those people didn't want to wait and see the 2d and didn't plan ahead then that is their fault, not the theaters or the movie industry. Also I'm sure if you talked to the manger about it they will give you your money back and let you in to see the 2d version, but only if you hadn't seen the 3d version already for obvious reasons. People are presented with options and then can decide for themselves what they want. Everyone can't have their hands held for their entire lives, personal respossiblity has to come into play somewhere along the line.
John McKenna Says
The way it works in this country is a product is made and then taken to market. Consumer demand quickly tells the manufacturer if the product is overpriced compared to the value it offers. It would appear that in the case of this film a large number of consumers accepted the price, which sounds like the opposite of “lousy business sense”.
The suggestion that making something that consumers chose to buy is morally equivalent to picking the pockets of unsuspecting victims lacks logic. When there are alternatives widely available (and in this case they include the same film in a standard format) we allow vendors to set their price, and consumers to consider their offer. I doubt many Americans would want to see a system that dictates to commercially competitive businesses what they may charge.
(I work in the film business, but I have no association with the film in question or the 3D format.)
AnimFan Says
Adding to the comment by Mike, no one is forcing consumers to go to the 3D versions of these films. The surcharge is NOT for the glasses, it is for the enhanced experience - duh! And while you are grousing about the supposedly venal rip-off being perpetrated on a suffering public, you should consider the fact that a disproportionate number of people CHOSE to see Monsters... in 3D. People can budget their weekend entertainment outings. Parents can manage the expectations of their kids. And still they decided to try the 3D experience, which, if you had bothered to see the film instead of attempting to dump on it, might have impressed you as effective and entertaining.
You are creating a dust-up where none exists, and trumpeting a supposed revelation in order to draw an audience to your shallow opinions - LOL.
Blame anyone you can in order to rabble-rouse (or attempt to do so - not too many people reading your post, sorry for you). Hollywood is not the banking industry. You should switch to that beat: easier to throw stones and actually hit something.
Mike Says
Or they can go to the 2D screenings instead. It's not like they're not showing these movies in 2D and forcing people to go to 3D.
Suzette Valle Says
Mr. Taylor,
Thank you for putting the $58 million gross take of "Monster vs. Aliens" in perspective. We withheld from shelling out $56 for our family of four to watch this much-hyped film. Honestly, we were starting to wonder if we were living in a different economic environment as the rest of the moviegoers who contributed to this B.O. blowout. We now clearly see how this happened, with out the aid of RealID glasses! www.mamarazziknowsbest.com