Slate's Hollywood Economics: Bogus Box Office Numbers

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ALEX CHADWICK, host:

At movie box offices over this last weekend, the new comedy "Monster-in-Law," starring Jane Fonda and Jennifer Lopez, brought in the most money. We tell you that not because we think the information will change your life, but because our next guest is here to tell us why box office figures like this are really practically meaningless, even though they're in the news every Monday. Edward J. Epstein writes the Hollywood Economist column for Slate. He joins us now.

Edward, the first problem with these numbers is they're not even real numbers; they're projections. Why is that?

EDWARD J. EPSTEIN (Slate): Well, because they're issued on Sunday night in order to make the Monday morning newspapers and the Sunday night television, and the audience hasn't yet gone to the theaters on Sunday.

CHADWICK: That's got to be a pretty big factor, I'd think.

EPSTEIN: It's a big factor. But you know, the real problem is that the news media has turned this into a meaningless horse race. I say `meaningless' 'cause it doesn't matter who wins or loses. Some weekends, when the children are out of school, a film will gross $150 million. And on a weekend in October when everyone's in school, the number-one film will gross $15 million. So it's not how many people--who wins the weekend, it's how much money a film generates for a studio, not merely from the box office, which is the smallest part--it's only 20 percent of the earnings--but from television sales where it's shown on television--network, pay television, cable--and, of course, DVD and video, foreign sales, toy licensing and even product placement.

CHADWICK: So what you're saying is this is more about marketing than it is about the economics of which studios are doing well, because as you point out in your article, the studios aren't actually getting this money directly.

EPSTEIN: Right. If box office numbers mean anything at all, they mean how good the advertising agency has done in activating teen-age television viewers--because that's who makes up 67 percent of the weekend audience on a national film--and that are sitting around watching television and then they're bombarded by 30-second ads. So what they're measuring is, is how effective are these ads over a one-week period, which means something to the advertising agency, and certainly you want to be effective rather than ineffective, but it means very little to how the movie will eventually do or even profitability.

CHADWICK: Well, then why do we hear so much about these numbers, Edward?

EPSTEIN: Because there's a gap on Sunday night, and this is a way of introducing the movies as a subject of news because there is such a vacuum of real information, of real numbers, of real budgets, of how much it cost to advertise; none of that information is made available to the media. The only thing that's made available are these half-fictional numbers on who went to the theaters. And, of course, the people who go to the theaters buy tickets, and that's interesting, but of limited interest because the people who go next week or the third week are the people who may be an influence whether the movie is good or bad.

CHADWICK: Opinion and analysis from Edward J. Epstein. He writes the Hollywood Economist column for our partners at Slate magazine, and he's the author of the recent book on film financing; it's called "The Big Picture."

Edward, thank you.

EPSTEIN: Thank you very much.

CHADWICK: And more coming on DAY TO DAY from NPR News.

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