Asking a lot of the audience

Movies At Fortune magazine’s Brainstorm Tech conference last month, Dreamworks Animation head Jeffrey Katzenberg offered a rare admission for a Hollywood mogul.

“Let me have a show of hands of people that would say the last seven or eight months of movies is the worst lineup of movies you’ve experienced in the last five years of your life,” Katzenberg asked from the stage. “They suck.  It’s unbelievable how bad movies have been, right?”

The problem, in Katzenberg’s view, is too much marketing and not enough storytelling. Too many movies, he suggested, start out as a marketing plan, and only then do the filmmakers try to back into a script

“Today the thing that is probably most askew in Hollywood is the issue of marketability versus playability,” Katzenberg said. “There is this sort of unholy alliance that has existed forever between art and commerce, show and biz.  And today it’s out of balance and it’s too much on the biz, and it’s too much on the commerce and it’s too much on the marketability.

While true, the studios don’t seem to be getting the marketing part right at the moment, either. According to the New York Times, this morning, would-be moviegoers are staying away from theaters in droves because ticket prices have gotten out of whack with the value provided:

After years of grumbling about steadily rising ticket prices, consumers achieved the nearly unthinkable earlier this year: they forced a momentary drop in the average cost of a movie ticket, to $7.86 in the first quarter, down from $8.01 in the fourth quarter of last year, partly by opting out of costly 3-D tickets for movies like “Mars Needs Moms,” and watching films in cheaper 2-D.


Executives from Hollywood’s major studios are generally reluctant to discuss prices. But with domestic box office down 5.55 percent — to $6.42 billion from $6.80 billion — from last year at this time, according to, even some of the best-compensated players are beginning to wonder whether exhibitors and studios are pushing their luck with consumers.

The piece goes on to cite comments by Steven Spielberg and Peter Jackson suggesting that it’s time to put an end to the 3D ticket price scam and bring 3D prices back in line with old-fashioned 2D (interestingly, Katzenberg goes on the record in the story rejecting that analysis).

The box-office is not the only place Hollywood has a perceived pricing problem, however. The Financial Times dumped a big bucket of cold water on UltraViolet this morning, suggesting the fundamental reason consumers are no longer buying as many DVDs, and that digital sales are not making up for that lost revenue, is a matter of economics, not of technology, and cannot be solved by technological initiatives like UltraViolet alone:

So far, the studios have done a poor job of persuading consumers to buy online – mainly because of the popularity of renting. “What Hollywood wants and what the consumer wants is diverging,” says Arash Amel of IHS Screen Digest, a research firm that recently produced a report on digital movie sales. “The studios now want you to buy movies digitally and to own those movies. But the consumer wants access to film and TV programming without the burden of ownership.”

If he is right, Hollywood’s latest technological venture – a project the studios hope will restore the industry to its cash-rich glory years – could be doomed even before it formally launches this autumn.

Even The Hollywood Reporter gave UltraViolet a bit of the hairy eyeball over the weekend.

[T]he message this holiday season will be that cloud-based movies are safer and more convenient — no more damaged discs or hard-drive crashes. Most people will get the digital copy along with a Blu-ray Disc at a price suggested to be about $35, though that will be heavily discounted by retailers. (A DVD typically sells for about $5 less than a Blu-ray copy.) Digital files alone should sell for about $15 to be competitive with iTunes.


But some doubt whether consumers trained to value physical discs will be willing to switch to the cloud. “There’s something to be said for just taking the DVD out of the little holder and slipping it immediately into your player, as compared to waiting for the cloud to show up, logging in, watching the bar on your screen or whatever,” says Wall Street analyst Harold Vogel.

Bad movies aren’t going to sell at any price. But even good movies won’t sell at a price that exceeds the value consumers place on them, no matter how easy the studios make it.