NATO vs. Hollywood
Leading American directors and producers wrote an open letter against a new policy of movie studios and major labels. The frightening picture of the American film industry's future described by the authors of the letter has been a reality in Russia for a long time.
The American movie model has always been the envy of Russian filmmakers, an ideal that seemed unattainable. There are approximately 40,000 movie theaters in the United States, while Russia has nearly 15 times less. In the United States you can have a limited release, and if the movie does well, print additional copies and collect a great "harvest" (as has happened recently with “The King's Speech”). In Russia, a movie plays at a movie theater for only two or three weeks before it's off, pushed out by the waiting list. Producers hate this system, which is called vertical rollout. In the United States, there is a period of four months between the theater release and the emergence of movies in other media, while in Russia, as soon as the movie's title is off the marquee, DVDs are already on the shelves. And so on.
But the situation has started to change. It's not out of the question that Russia will be able to catch up to, if not surpass, America — though not due to our efforts, but America's.
An organization called the National Association of Theater Owners (NATO) wrote an open letter condemning an agreement between the largest Hollywood studios and DirecTV. According to the agreement, movies will appear on video-on-demand not in four months, but only eight weeks after the theater releases.
"[This] could irrevocably harm the financial model of our film industry," stated the letter, which in addition to NATO members was signed by James Cameron and his ex-wife Kathryn Bigelow, as well as Peter Jackson, Michael Bay, Guillermo del Toro, Robert Rodriguez, and a few other first-rate American filmmakers.
The authors state, "Major studios are struggling to replace the revenue lost by the declining value of DVD transactions. Low cost rentals and subscriptions are undermining higher priced DVD sales and rentals... Premature home video windows could lead to the loss of hundreds of millions of dollars in annual revenue. Some theaters will close. The competition for those screens that remain will become that much more intense, foreclosing all but the most commercial movies from theatrical release. Specialty films whose success depends on platform releases that slowly build in awareness would be severely threatened under this new model. Careers that are built on the risks that can be taken with lower budget films may never have the chance to blossom under this cut-throat new model."
It's interesting whether the undersigned Americans realize that their dire predictions correspond completely with the current situation at our box office. Russian arthouse and Artstroy films that gradually gain audience, such as “Fireman” by Balabanov, simply don’t have time to build their audience. It seems that since the days of the movie “Boomer” there has not been a single instance when additional copies were in demand while a movie was available for rent, while a drastic reduction was common. If a month after a movie gets released in every Russian movie theater it's still playing on a few dozen screens, it can be considered a major success.
American producers have already managed to learn from their own experiences what the vertical rollout system that dominates in Russia is all about. It's kind of funny that this happened during the release of “Avatar.” Because the number of 3D screens is still limited (at the time, the United States had approximately 2,000), the film didn't get its due. After all, “Alice in Wonderland” was pushing it out. That's why, a few months later, Cameron re-released a so-called director's version of the movie in theaters. However, this new version was not fundamentally different from what the viewers had already seen.
“Avatar” was a big push for the growth of 3D movie theaters throughout the world. In the United States, one-fifth of all movie revenue was from movies shown in this format. In Russia, it was one-third. Since the price for 3D movie tickets is significantly higher than for regular tickets, 3D movies increase revenue, but not the number of viewers. A year ago, James Cameron and Michael Bay spoke out against the policy of converting movies that were originally not designed for 3D into the new technological format. They claimed, as they do now, that the movie studios were doing this to make a quick buck, forgetting about the long-term prospects for the industry.
Back then people did not listen to James Cameron and Michael Bay. And now, it seems, they should have. January 2011 had the lowest ticket sales in the past 20 years. Apparently, one of the few people who had heeded the advice of the masters was Timur Bekmambetov, who has been dividing his time between Los Angeles and Moscow. His movie “Yolki” (Christmas Trees) remained “flat,” but that hasn't stopped the movie from leading in the Russian box office with $22.8 million.