Company Town

The business behind the show

'Shutter Island' shows the power of isolation

February 21, 2010 | 12:51 pm

Sh When Paramount decided to move "Shutter Island" from October to February, some wondered if the studio had a bigger headache on its hands than the migraines felt by Leonardo DiCaprio's character in the film. It didn't help that the pulp-ish trailer elicited some eyebrow-raising among pundits accustomed to more upscale fare from DiCaprio and Martin Scorsese.

But like a short-track speed skater at the Winter Olympics, the studio showed that when it came to releasing a movie, it wasn't how you started but how you finished. The postponement to a date that was relatively open -- and got more open after Lionsgate moved "From Paris With Love" -- proved a prescient move. 

Most box-office experts had estimated that a $35-million opening would be the benchmark for success. As it was, the $40-million figure marked the biggest opening for either Scorsese or DiCaprio, the latter of whom had previously broken the $30-million mark only once, with the conman dramedy "Catch Me If You Can" seven years ago. (Perhaps also propitiously, Paramount delayed the release to a time on the calendar when much of the country was still plunged in the stormy weather seen in the film.)

Although "Shutter Island" didn't come close to the $56.4 million that "Valentine's Day" earned over three days last weekend, it did rival the $41 million of "Tyler Perry's Madea Goes to Jail" (2009) for the second-biggest February opening in three years -- and for an R-rated film, no less. (Paramount also earned $9.1 million internationally from an assortment of global territories, including Spain, Russia and the Netherlands.)

Paramount touted its ability to attract a female audience that doesn't typically come out to genre films (though does come out more often than it used to). Indeed, moviegoers were split almost evenly between men and women, as the profile of DiCaprio helped boost the "Shutter Island" numbers among women. The Scorsese pedigree was also likely part of the reason older viewers came out to the thriller in droves, as the numbers were also evenly split between filmgoers older and younger than 25.

But although the film's opening will likely boost the argument that genre movies increasingly appeal to both genders and a range of ages, it might just come down to the calendar.

"The Departed," the blockbuster that marked Scorsese and DiCaprio's most fruitful collaboration, earned only $26 million in its opening weekend, but it was up against two releases aimed at men, the Dane Cook comedy "Employee of the Month" and the reboot of "The Texas Chainsaw Massacre." Neither of those films broke any box-office records, but they did combine to take in nearly $30 million that weekend.

This weekend, on the other hand, there were almost no movies aimed at a young male audience -- the only one playing widely (besides "Avatar") was "The Wolfman," the disappointing revival of the classic monster movie, which didn't even make it to the $10-million mark. (Of course, one could argue that "Shutter Island" not only benefited from "Wolfman's" weak opening but also contributed to it.) And even women didn't turn out in such high numbers to see their preferred vehicle of last weekend, "Valentine's Day," as the film dropped 69%.

"Shutter Island" will face some competition next weekend from Kevin Smith's male-oriented comedy "Cop Out." But with women still coming -- and Tim Burton's "Alice in Wonderland" not opening for another weekend -- expect another strong showing from Scorsese et al. Sometimes it pays to be an island.

Here are the top 10 movies at the domestic box office, according to studio estimates and Hollywood.com:

Continue reading »

First Look: 'Shutter Island' a big hit with moviegoers

February 21, 2010 |  9:27 am

Martin Scorsese, Leonardo DiCaprio and a set of Gothic thrills proved to be a huge draw at the box office this weekend.

Shutter "Shutter Island," Paramount Pictures' psychological thriller based on Dennis Lehane's bestselling novel, will earn a studio-estimated $40.2 million domestically over the three-day period, good enough for the best-ever opening for both director Scorsese and star DiCaprio. Many box-office experts had predicted an opening in the low mid-30s, with any gross over $35 million considered a notable success.

The film was not inexpensive to produce, however. The story, set in 1954, of a New England detective (DiCaprio) investigating a mysterious disappearance at an island-bound insane asylum cost nearly $100 million to make, according to a person close to the production, although a Paramount spokesperson said that tax incentives from the state of Massachusetts, where the film was shot, lowered the cost to about $75 million.

The successful box-office opening validates Paramount's decision to move the release date for "Shutter Island" out of a crowded fall into a relatively sparse February.

-- Steven Zeitchik

Photo: Poster for "Shutter Island." Credit: Paramount Pictures


FCC probes planned TV quiz show 'Our Little Genius'

February 20, 2010 |  4:58 pm

Allegations that a planned game show called “Our Little Genius” developed for Fox might have been rigged has prompted an inquiry by the Federal Communications Commission into possible violations of federal rules that govern quiz shows.

Revelation of the FCC probe follows the News Corp.-owned network's decision last month to abruptly yank “Our Little Genius” from its schedule, only a week before the show was to premiere. Fox took the unusual step after reality show titan Mark Burnett, who was producing the series, informed the network that there was a problem with how the young contestants had been briefed for the competition.

"Our Little Genius" was designed to showcase precocious children between the ages of 6 to 12 as they answered increasingly difficult questions in a bid to win thousands of dollars for their families. Fox executives said no decision yet had been made on whether to air the show.

An FCC spokesman declined Friday to comment on possible outcomes of the agency’s investigation, saying only that the case was pending.

Burnett could not be reached for comment Saturday. Fox officials said they had not been contacted by the FCC nor had they seen a copy of the complaint.

Last month, Fox said that none of the children who participated in the show was provided answers to questions. Supplying answers would have been a clear violation of federal rules adopted in the wake of the infamous television quiz show scandals of the 1950s. At that time, producers of such shows as "Twenty One" and “The $64,000 Question” slipped answers to contestants, who then were able to advance.  The increasingly tough questions -- and rising stakes -- heightened the drama of the televised contest.

In-depth answers to questions apparently were not provided to “Our Little Genius” contestants, according to a complaint filed with the FCC in late December and released by the agency on Friday. But the complaint detailed how show producers went to lengths to coach the children. Parents of the children also were allowed to help select questions, the complaint said.

“They asked us to evaluate topics and questions to be used for their show, and they removed several topics that I found objectionable,” wrote the parent who filed the FCC complaint. The identities of the parent and his child were withheld to protect their privacy.

It was not immediately clear what action the FCC is empowered to take if it finds wrongdoing because the episodes never aired.  Though the FCC has jurisdiction over Fox because it holds FCC broadcast licenses for its TV stations, the regulatory agency does not typically police independent producers such as Burnett.

-- Meg James


Tom Gores joins the hunt for Miramax

February 19, 2010 |  7:15 pm
Walt Disney Co. hopes to unload the assets of its recently shuttered specialty label Miramax Films by mid-March. But at this juncture it's unclear which prospective buyer is willing to fork over the premium the entertainment giant is seeking.  Il4yumncTOMGORES

Two prospective bidders -- Summit Entertainment and Amir Malin's investment fund Qualia Capital -- have already backed away from the bidding as their valuations fell far short of what Disney wants for the Miramax library and name, people familiar with the matter said.

Some suitors have balked at Disney's $700-million asking price, concluding that cash flow projections for Miramax's library of more than 600 film titles don't support such a figure, said the people close to the situation.

Meanwhile, a new interested party has surfaced, according to several people: Platinum Equity Partners, the Beverly Hills investment firm headed by Tom Gores. Platinum is evaluating the asset but it's unclear whether Miramax would fit in with its investment criteria, or whether Gores might pursue the transaction privately -- if at all.

Gores, whose brother Sam Gores runs Paradigm Talent Agency, has taken personal stakes in various entertainment ventures, including at one point Lions Gate Entertainment and the 2005 Andy Garcia drama "The Lost City."

Continue reading »

AMC digging in over Disney's plans for 'Alice in Wonderland'

February 19, 2010 |  6:20 pm

ALICE

The protest by movie theater companies against Disney's plans to accelerate the DVD release for its upcoming 3-D film "Alice in Wonderland" is rippling across the Atlantic.

Disney wants to shorten the window between the movie's theatrical debut and its DVD release to 12 weeks from 17 weeks, in hopes of boosting DVD sales. But exhibitors fear that this would cut into their business.

Two British theater companies and a majority of cinema operators in the Netherlands have already vowed to boycott "Alice" when it debuts March 5. Now, a major U.S. theater chain may follow the lead of Vue Entertainment and Odeon Cinemas in not carrying the movie.

AMC Entertainment, the nation's second-largest theater operator, is digging in its heels over the issue. Less than two weeks remain before "Alice's" release, but the Kansas City, Mo.-based company, which has more than 4,500 screens worldwide, has not yet agreed to screen it, according to three people familiar with the matter.

If AMC refuses to show "Alice," that would be a major blow to the film's box-office returns. However, the two sides are expected to reach a compromise that would avert such an outcome -- even if negotiations go down to the wire, sources said.

Representatives of AMC and Disney declined to comment.

Britain's Cineworld Cinemas announced this week that it would carry "Alice."

-- Richard Verrier and Claudia Eller

Photo: Johnny Depp in "Alice in Wonderland." Credit: Disney Enterprises



How social games make money: Lessons from Farmville

February 19, 2010 | 12:57 pm

Farmville The Web is fantastic at many things -- e-mail, e-commerce, e-vites, for example. But unless your name is Amazon or Google, making money there has proved elusive.

But Brian Reynolds, chief game designer for Zynga, the company that made the social game Farmville, this week shed a little light on how to get people to buy the farm online during his talk at the Design Innovate Communicate Entertain Summit in Las Vegas.

To start with, Reynolds threw out some bare bones data: 
  • Social games cost between $100,000 to $300,000 to make. 
  • Between 3% and 5% of people who play social games pay money for virtual goods in the game or sign up for advertising "offers" that generate cash for the developer.
  • Farmville is played by about 31 million people every day.

Now let's suppose that, given these ballpark figures, that each person who plays a social game generates, on average, a penny a day. Multiply that penny by the number of days in a year, 365, and you get an average of $3.65 generated per year per person.

If you are Farmville, you multiply that by the number of people who play your game on a daily basis: 

  • $3.65 x 31 million people = $113 million a year

Not bad for a game that perhaps cost $300,000, maximum, to make. Of course, That doesn't include the salaries for a team of about 40 designers and programmers to continuously update and maintain the game (tack on $4 million to the annual budget).

Reynolds did not disclose how many pennies per day Farmville generates. But if it's a penny, one could conclude that it's a $100 million-a-year game. Perhaps that's why some have valued Zynga as a $3-billion company.

Now let's say you were especially clever and you figured out...

Continue reading »

Anatomy of a $60 video game

February 19, 2010 | 10:29 am

Ever wonder where your hard-earned money goes after you've plunked $60 down on a game at GameStop or Target? Here's one answer: 

Anatomy of a $60 Video Game

Much of the data came via a slide shown Thursday by Steve Perlman, founder of OnLive, an on-demand video game service based in Palo Alto.

Perlman, who spoke during the Design Innovate Communicate Entertain Summit in Las Vegas, showed the slide as part of an update on his company's service, which is expected to launch later this year.

Another way to look at it is to say publishers such as Activision and Electronic Arts receive $45 after retailers take a $15 cut. Publishers turn around and pay a $7 licensing fee to console manufacturers such as Microsoft, Sony and Nintendo. The cost of making, packaging and shipping game discs to stores carves up another $4. Finally, not all games sell, so the expense of returning unsold inventory eats up another $7.

That leaves publishers with about $27 per disc sold for development, marketing and other expenses. These are, of course, back-of-the-envelope averages. Each of these numbers can vary. For instance, a publisher could negotiate a smaller licensing fee with console manufacturers. And by deploying the Goldilocks method of inventory (not too much, not too little), they can also minimize returns. Tinkering with the margins in these ways lets companies tune their bottom lines.

-- Alex Pham




The Morning Fix: Howard Stern's next move? Kardashians rule the world (no, we're not joking)! Miramax mayhem. CBS may cut iTunes costs.

February 19, 2010 |  8:44 am

After the coffee. Before figuring out who is in the lead for Miramax.

It's the Kardashians' world, we just have to endure it. There's reality television and then there's the Kardashians. The three sisters, all whose names start with the letter K (should they be fixed up with Roger Clemens' sons, whose names also start with the letter K?), are not only TV stars with a hit show on E!, but they are creating a business empire as well. The Los Angeles Times probes the sensation that is the Kardashians. Wonder if Bruce Jenner knew what he was getting into. Oh wait, we have a story on him too. 

CTlogosmall Miramax mayhem. Walt Disney Co.'s efforts to unload Miramax continue with a round of offers due Friday. Figuring out who has a shot and who is just blowing smoke is no easy task. Lions Gate is kicking the tires but has a shadow named Icahn hanging over it. The Weinstein Co. would love to have the company back but needs to get the cash. The Hollywood Reporter with an update. 

CBS might cut a piece for Apple. On a conference call to discuss CBS' fourth- quarter earnings, Chief Executive Leslie Moonves said the network is considering cutting the price tag on some of its shows for sale on Apple's iTunes from $1.99 to as low as 99 cents. Apple has been pushing for lower prices from programmers. After the call, according to All Things Digital, CBS brass cautioned that nothing was imminent. In other words, CBS doesn't want to look like it is bowing to Apple's wishes just yet. 

Disney's big bet. The Wrap examines what Disney bought with its $4-billion purchase of Marvel and whether there are enough superheroes to make the deal work. Don't forget about Ant Man!

What will the king do next. "American Idol" gossip aside (and that's all it is), the Wall Street Journal takes a lengthy look at radio personality Howard Stern, whose contract with satellite radio operator Sirius XM is up at the end of the year. 

Warner Bros. gets busy. Warner Bros. is in talks with Robert Downey Jr. and his producer wife Susan about a first look deal, according to Variety. Downey has been on a roll lately. The studio also is doing a deal with Zac Efron. 

Inside the Los Angeles Times: Patrick Goldstein on Harvey Weinstein's Oscar dreams. Betsy Sharkey on "Shutter Island." 

-- Joe Flint

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CBS Corp. reports lower quarterly earnings and barking dogs

February 18, 2010 |  3:16 pm

CBS Corp.'s net income plunged 57% in the fourth quarter largely because of an impairment charge to account for the reduced value of some of its radio stations. In addition, CBS reported lower revenue from its billboard unit and local radio and TV stations -- but higher revenues from its entertainment businesses.

For the quarter ended Dec. 31, CBS earned $58.8 million, or 9 cents a share, compared with $136.1 million, or 20 cents a share, in the year-earlier period. The charge was for $178.3 million to account for a drop in value of certain undisclosed radio stations. In the year-earlier period, CBS took a much smaller charge of $64.2 million after unloading some of its radio holdings.

Revenue for the quarter was down 1% to $3.5 billion.

For the full year, CBS said it collected $13 billion in revenue, compared with nearly $14 billion in 2008.  It earned $226.5 million in 2009, compared with a $12.5-billion loss in 2008 because of impairment charges when the company's stock plummeted in value during the market collapse and CBS Chairman Sumner Redstone's disclosure of a credit crunch with his family's investment firm.  Redstone's private firm has since restructured its debt.

CBS Corp. Chief Executive Leslie Moonves said during a conference call Thursday that the advertising market continues to show signs of improvement, including at local TV and radio stations, which were slammed by the recession. Auto advertising is finally shifting into gear, and the company expects to rake in political dollars during the second half of the year. Moonves also said advertising for the CBS broadcast network was up 8% for the quarter.

"You can see the continued strength in our content businesses," Moonves said.

Moonves acknowledged that the inaugural movie out of CBS Films, "Extraordinary Measures" starring Harrison Ford and Brendan Fraser, was a disappointment. "Our first film did not perform nearly as well as we would have liked," he said. The company did not say whether it would have to take an impairment charge for losses on the film, which was released in January and earned just $12 million at the box office.

On a more positive note, CBS said it raked in the largest haul ever for one of its broadcasts of a Super Bowl -- but it did not provide a dollar amount. Chief Financial Officer Joseph Ianniello added:  "We are confident that 2010 is going to be better than 2009."

At the beginning of the call, Redstone provided his opening remarks, which are usually brimming with pride and sunny forecasts for his company. "There is no economic storm that a company like CBS cannot weather," Redstone said. "Content is king and will always be king. And no one has better content than CBS and another company that I cannot name today." That would be his other company, Viacom.

Listeners on the call could hear Redstone's dogs, long-haired Dachshunds, barking loudly in the background. Whether they were in agreement with Redstone or had a different take on the numbers could not be determined. At that point, the 86-year-old mogul's phone line abruptly went dead, and Moonves took over the call.

-- Meg James
 


Movie projector: Adults to drive big 'Shutter Island' debut [updated]

February 18, 2010 |  1:26 pm

Shutter Paramount Pictures looks to have something on its hands this weekend that has become a rare commodity in Hollywood: a hit R-rated drama.

The release of the Martin Scorsese-directed thriller "Shutter Island," which stars Leonardo DiCaprio, was delayed from October to this Friday due to financial concerns at Paramount. The switch, which came after some marketing materials had already launched, doesn't seem to have hurt the movie's chances, however.

Pre-release surveys of potential moviegoers show "Shutter Island" generating healthy interest with all audience segments, according to people who have seen the data. However, adults over 30 are among the most excited, an unusual occurrence given that they are the least frequent movie-goers and rarely rush out to a movie on its opening weekend.

Movie theaters have been littered with R-rated dramas that failed to connect with audiences in the last year, including "The International," "The Taking of Pelham 1 2 3" and "The Informant!" Even last weekend's big budget thriller, "The Wolfman," debuted to a modest $31.5 million. [Update, 3:02 p.m.: An earlier version of this post incorrectly listed "State of Play" as an example of an R-rated film.]

"Shutter Island," however, is firing on all cylinders and should sell between $35 million and $40 million worth of tickets in the U.S. and Canada, according to people who have seen its prerelease tracking. That's a very healthy start given that the picture cost just under $80 million to produce. If audiences react as well as most critics have, it should continue to play well in the coming weeks.

The previous biggest opening for a movie directed by Scorsese was $26.9 million for "The Departed" in 2006. DiCaprio's high-water mark is $30 million for "Catch Me If You Can" in 2002.

Paramount is benefiting from a lack of competition this weekend, with no other movies opening nationwide. Lionsgate moved the John Travolta action film "From Paris With Love" up two weeks to Feb. 5 after Paramount in August chose this Friday for "Shutter Island."

The studio is also opening its thriller in seven foreign countries this weekend, the biggest of which is Australia. It will then roll out to other major international markets through the end of March.

Warner Bros.' romantic comedy "Valentine's Day" will almost certainly be No. 2 at the box office this weekend after its huge $56.3-million debut, even though its ticket sales will likely fall off more than 50% given the huge crowds it drew on its titular holiday Sunday.

Universal Pictures is hoping that "Wolfman" doesn't decline as much after its less-than-impressive start. But with "Shutter Island" attracting a similar adult audience and word-of-mouth likely to be weak after opening weekend audiences gave it an average grade of C+, the odds are that "Wolfman" will drop more  than 50%.

Fox's family film "Percy Jackson & The Olympians: The Lightning Thief" has the best odds to decline modestly, since its audience is completely different from that of "Shutter Island" and opening weekend crowds gave it an average grade of B+.

Also this weekend, Summit Entertainment opens the new Roman Polanski-directed drama "The Ghost Writer" at two theaters in Los Angeles and two in New York City.

--Ben Fritz

Photo: Leonardo DiCaprio and Mark Ruffalo in "Shutter Island."  Credit: Andrew Cooper / Paramount Pictures.




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Recent Posts
'Shutter Island' shows the power of isolation |  February 21, 2010, 12:51 pm »
FCC probes planned TV quiz show 'Our Little Genius' |  February 20, 2010, 4:58 pm »
Tom Gores joins the hunt for Miramax |  February 19, 2010, 7:15 pm »


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