Monday Morning Quarterback Part Two

By BOP Staff

March 28, 2006

I can't wait for Disney to make a movie about our team!

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ZZ Top has legs, V for Vendetta not so much.

Kim Hollis: V for Vendetta's hopes for The Matrix legs were dashed as it fell 52% to $12.3 million in its opening weekend. Given the $50 million budget and its running total of $46.2 million, should Warner Bros. be happy with its box office performance this far?

Reagen Sulewski: Mild disappointment. This really should have been the first film of the year to break $100 million.

Joel Corcoran: Given the past year, I think every studio should be happy with any movie that recoups its production costs during a domestic box office run. The international box office and DVD sales should still make Warner Bros. a tidy little profit.

David Mumpower: I agree with Reagen and Joel. A studio is going to be happy any time they are in the black prior to ancillary markets. Having said that, it's still a mild disappointment. A film of this quality with this premise should make more money. Period.

Kim Hollis: I guess they'll be happy with it and say it was a tough-to-market film due to its subject matter and lack of star power. It will almost certainly do better internationally, so it's going to be a win overall and make money. I think credit really does have to go to the Wachowskis and James McTeigue for keeping it at such a reasonable budget cost.

Tim Briody: I'm actually curious to see its performance in the mother country, as David mentioned in the wrap-up,

David Mumpower: V for Vendetta made $1.1 million in the UK this week, down 45% from last week. It's earned $4.3 million in England, which is okay but less than expected.

Joel Corcoran: I have that same sense of disappointment - I really wanted this movie to break the $100 million mark. But I'm cynically satisfied that it won't lose money.

Legal movie downloads on the Internet: now they're for more than just pornography!

Kim Hollis: Universal Pictures has announced plans to launch a "download-to-own" movie service in Britain next month. Details may be found here. What do you think of the idea itself, the initial price point for the titles, and the decision to launch outside of North America?

David Mumpower: We have referenced variations of this idea innumerable times on MMQB. This is the future and, as Hugo Weaving's Agent Smith would say, it's the sound of inevitablility. People want to be able to watch movies at home as technological developments continue to allow them to do so in a more convenient fashion.

Reagen Sulewski: While the idea seems juuust ahead of the technological curve, I think the price point is crazy. It's the equivalent of the Ticketmaster "convenience charges" and I really don't see the huge advantage compared to just going to the store, at least not at that level.

Kim Hollis: Right, Reagen. I totally think they're on the right track, but the cost ($10 over what a simple DVD costs) seems way out there.

Tim Briody: And I believe people will pay for convienence, but $35 as opposed to the generally accepted $20 for a DVD might be a little steep.

Joel Corcoran: A service based on this concept is long overdue. The idea has been around for years, and I'm very happy to see a company putting it into actual practice. The pricing seems a bit high, but could that be a function of the currency markets? I mean, we can find older movies here for ten bucks, rather than $17.50, and new releases are around $20.

David Mumpower: With regards to the price point, I note that England's general DVD prices are listed as higher ($24.30 on average), so I suspect that's the major discrepancy here. $34.72 is only $10 higher than average. It's a bit of gouging to be sure, but not an extreme one.

Reagen Sulewski: I would hope that as economies of scale kick in, that would come down to be even cheaper than a DVD. Look at iTunes - while there's no analogy for buying part of a movie, buying a full album online is generally cheaper than buying a physical CD.

David Mumpower: The key difference here is that you both download the movie *and* receive a physical copy of the DVD. So, there is actually a bit more expense for the studio than normal since they have to ship the discs without the financial recompenses they get from shipping discounts with major retailers.

The UK gets all the good stuff: Guy Fawkes Day, Alan Moore snake handling sightings and now King Kong!

Reagen Sulewski: I get the feeling that it's launching overseas so that if it does flop, it can be ignored and/or covered up. Plausible deniability.

Joel Corcoran: I'm not terribly surprised that this service premiered in the United Kingdom, however. While the copyright laws there are generally stricter in the U.S., the laws are also much more settled and established compared to copyright law here.

Kim Hollis: That's my thought, as well, Reagen. iTunes works. Why aren't people following that model more closely? I can obviously understand charging more for a movie, but $34 is cost prohibitive under the best of circumstances. Especially when all you're getting is a digital copy of the film *in addition* to the DVD itself.

Reagen Sulewski: I honestly think the winning model is going to be something close to this - a VOD setup that offers credits towards purchase.

Kim Hollis: Though the logistics of VOD (how many different cable companies will studios have to work with?) could be nightmarish for studios. They're probably looking at settling with one company (i.e. Netflix, Blockbuster) and going with it. The thing is, it will probably be fragmented. Disney and Co. will do iTunes. Warner Bros. could presumably use Time Warner cable. And so forth.

Tim Briody: And this would be just the movie, right? Often times the reason to purchase a DVD is for the extra features.

David Mumpower: I'm going to ask BOP staff member and UK citizen Ash Wakeman to test the service when it's launched, Tim, but you have it right as I understand it. I'm sure all of the bonus stuff will get added in later as the practice evolves. Also, I think that Joel and Reagen have touched upon the most interesting aspect. It's almost as if Universal has set this up in a way where they can temporarily avoid a showdown with NATO. If they receive satisfactory results abroad, then they can make waves here. Otherwise, they can tell consumers they tried and it failed.

Joel Corcoran: That's pretty much it, David. Also, Universal could use success abroad as leverage in lobbying Congress for further changes to U.S. copyright law, such as revisions to the Digital Millenium Copyright Act (DMCA), arguing that regulations here need to be more "favorable" before the service will succeed.

David Mumpower: Basically, what we all seem to agree upon is that the test service idea is sound and the location is ingenious. The price point is cause for concern, though.

Reagen Sulewski: Yeah, as much as I value my time and "bright and shiny" - an extra $10 to $15 is too much to justify it.

David Mumpower: On a sidenote, how long would it take to download the three hour long King Kong anyway? That sounds like an all day project, even with broadband.

Tim Briody: And we shake our fist at Peter Jackson once again.

Kim Hollis: Hopefully the download won't be the expanded Director's Cut.


Just imagine what the George Mason onslaught would look like in 3-D!

Kim Hollis: In an attempt to find some financial independence outside the Hollywood studio system, theater chains have announced the intention to exhibit some live 3-D sports events beginning in 2007. Details may be found here. Do you consider this good business or does the decision smack of desperation to you?

Reagen Sulewski: The 3-D aspect of it seems like overkill. I don't want to be peering through glasses at an effect on a close or important play.

David Mumpower: I don't know what a "community entertainment destination" means (isn't that a brothel?), and I do think this move smacks of utter desperation. Having said that, I do think there are several sporting events throughout the year which would justify such an endeavor. The problem is that people already have sports bars for this sort of thing. I don't see the 3-d element as enough of a difference to overcome the already 100% lost market share.

Joel Corcoran: The 3-D part seems pretty desperate to me, but I actually like the broader idea. It is a good business decision in that it's bringing a new revenue stream to existing facilities, but making it a successful business decision will require some careful marketing and a deftly handled strategy.

Kim Hollis: The trouble is, they're just going to have to try new things. Some of them might be hit or miss, but at the moment they're in a position where they either find some new alternatives or exhibitors go extinct, with the exception of your IMAX theaters and so forth.

David Mumpower: The better way to experience such a viewing would be, ironically enough, the already extinct drive-in theater. That's where you are outdoors with friends, celebrating the communal experience.

Joel Corcoran: But how many people take their kids to a sports bar, David? I think this option hits right at the people who enjoy sports, but are either unwilling or unable to pay the outrageous ticket prices for pro sports venues.

David Mumpower: I don't know how many areas have something like it, but we have a Beef O'Brady's here. It's a family sports pub with an emphasis on keeping kids entertained while the parents watch sports.

Tim Briody: A couple years ago, I saw a slideshow advertisement aimed at getting businesses to hold conferences and seminars in the theater. So this isn't all that new.

David Mumpower: The business conferences idea has floated around for a while but it's never done well due to the fact that people generally consider theaters a one trick pony.

Joel Corcoran: I'm just waiting for theaters to start bringing back live acts - the return of vaudeville!

Hopefully, the glasses will double as night vision goggles.

David Mumpower: Reagen made a solid point earlier. Everyone here today is a huge sports fan. How much would you like the idea of wearing 3-D glasses for 2-3 hours?

Joel Corcoran: If they were comfortable glasses, I'd have no problem wearing them for a few hours. If they were those cheap cardboard cut-out glasses, my ears start hurting after wearing them for an hour.

Reagen Sulewski: Sports is sports though. This is fixing a thing that isn't broke.

Tim Briody: Could those things be anymore 1987?

Kim Hollis: I didn't mind the glasses for Chicken Little. If they're like those, they could even be collectible. Sort of.

David Mumpower: I think that sums it up well, Joel. Would we be able to buy a decent pair and keep them or would we be stuck with the nine cents ones?

Joel Corcoran: Precisely. If this service lasts, I'm sure some companies out there will start offering non-disposable 3-D glasses that can be used indefinitely, probably for the price of a pair of cheap sunglasses.

Tim Briody: Has there been signifigant improvement in 3-D glasses technology that I'm not aware of?

Kim Hollis: Well, Tim, the glasses for Chicken Little were quite nice, actually. Plastic and green and not even noticeable while you were wearing them, honestly. And they were cute because they looked like Chicken Little's glasses too, see? For sports, they just need to give us Horace Grant goggles.

Reagen Sulewski: I'd certainly be tempted to go to, say, a Stanley Cup finals broadcast in a theatre, but seeing it on a 50 foot screen would be the hook itself. Telling me it's only 3-D is likely to keep me away.

David Mumpower: For football, we should get one of the helmets with visors like LaDainian Tomlinson wears.

Joel Corcoran: Chicken Little used a new 3-D format called "Real-D," which was light years beyond the old red and green plastic lens glasses.

Reagen Sulewski: Chris Sabo was a man ahead of his time.

David Mumpower: I would expect that theater owners will use whatever the best emerging technology is if they go forward with this idea. Having said that, it's going to be very expensive to implement such a change, and there is no guarantee of results. As such, it's a very shaky business proposition.



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