Hello everybody. At RatingMovies.Com®, we hope you had a wonderful set of celebrations for the New Year, and may 2007 bring you all success, passion, and health.
2006 was a busy year film-wise with pretty much as many records as there were disappointments. You can see all the year's pretty much final box office numbers here. Although 2006 proved to be better for the studios than 2005, there is something really amiss in the business. Budgets are out of control, the new audience for movies seem to want their movies in quite a different way from the previous generation, and studios are struggling and somewhat schizophrenic between wanting to give access to their movies anywhere, anytime, and their efforts to lock in complete control over their content through brain-dead and restrictive policies and content management schemes. Case in point, the new encryption security standard for HD-DVD has been broken recently for some HD-DVD titles: the hack only works on some titles because, contrary to regular DVD, encryption keys are unique to each DVD title and so there is no way to generically break all HD-DVD titles. As a response, the studios are considering revoking those titles so that if you are the proud owners of them, you can simply turn the disks into junk or throw them away. If that doesn't piss off customers, then i do not know what will. And that wasn't all. This year's hall of shame is crowded. For instance, Apple entered the movie distribution business, causing Wal-Mart to threaten studios of serious retaliation if they persist in doing business online. The result? Movie downloads, in poor quality and resolution, meant to be seen on dinky screens on dinky portable players, without any extras and filled with questionable Content Management traps, cost more or close to the same price as a real physical DVD you could buy in any store, with the top quality, all the extras, and no restrictions: if you buy the disk, you own the disk.
And then there is the next generation DVD format war, with Sony and Toshiba duking it out with their respective formats Blu-Ray and HD-DVD. The result? A market that is not starting up due to consumer confusion, or smart people taking a wait and see attitude. Some pundits in the market are quick to come up with solutions, such as the newly proposed Total-DVD disks which Time Warner says can contain both an HD-DVD and Blu-Ray version of the film. Another solution: players that simply can play both formats. Does that make sense? Well, on the hardware side, that strategy has been done already with Audio and players that could play Sony's SACD and Toshiba's DVD-Audio disks. Did it do anything for the market? Of course not because the very existence of the two formats still meant that retailers had to keep potentially two versions of disks out, and the recording, mastering and manufacturing facilities being split in two ensured that neither format would reach an economy of scale good enough to make them both cheap enough for wider adoption. And the single disk option? Well, think for a minute... Why do you think Sony and Toshiba are in this bitter battle over the next generation standards? It's the royalties stupid... Do you think either of them will let a new Disk format be able to contain both of their stuff without having to pay royalties twice? Of course, to be any real solution, all the studios would have to support this new disk, otherwise, guess what, the hardware problem discussed before comes back to bite you: now, retailers have to keep not 1, not 2, not 3 but 4 formats around (DVD, HD-DVD, Blu-Ray and Total-DVD), and all the manufacturing facilities are now split in 4, once again, ensuring that costs will never to the level now enjoyed by the ubiquitous DVD format.
Another one? Theaters. It seems that a weekend doesn't go by without hearing in the news, or reading somewhere about the horrible experience people continue to have in theaters. Personally, with a projector, a god 5.1 sound system and a 100" screen, i feel that my movie experience at home is many times better than that in the theater. If you factor in the 3 hours i need to watch a 2h movie, the cost of the tickets, the cost of the nanny, and the regular annoyances at the theaters themselves such as the noise, often poor projection quality, commercials and what not, staying home is simply the way to go for me now. And i seem to not be the only one. This holiday season show records shopping for all sorts of TV-related stuff, from large screens to sound systems. Some people buy those for watching Sports. The other main group of buyers is movie lovers. In 5 years, high-quality 100" screens will be affordable, and my guess is that physical disks you buy will be the minority, meaning the format war we are seeing now is pretty much useless anyway. Most movies will be internet-delivered, on demand, that is, of course, if the studios can manage their current relationship with the theaters and retailers and make the transition. Of course, there is also that pesky issue of content management schemes and how flexible they will be. Can i own a download pretty much like i currently own a physical DVD? For the majority of us not involved in massive piracy (i know someone who has some 8,000 movies at home, every single one of them pirated), the question will remain crucial. I want a "own" business model as well as a "rent" business model. If the "own" business model fades away, i am not sure i'll be happy. If that digital download i just paid $10 for is tethered to one device, that won't be good. If i can't take it to my summer beach house (i don't have one, but let's say i do for the sake of argument), i won't like it. If i can't take a movie on a business trip and watch it on my laptop during a flight, that will be a pain. If i can't simply lend that movie to a friend, then what's the point of "owning" something. It's not ownership, but a disguised version of rental. Now, the way the music business is evolving is showing that maybe the "disguised rental" business model would be viable. Today, many people do essentially buy low-quality music from Apple's iTunes store, and are stuck to have it on that one iPod they own. If you decide to buy another brand when you update your MP3 player, then all your music is dead. Is that ownership?
Want another shame shame shame? This one is the cherry on top of an already rather heavy cake... Go back to that chart of all this year's top films and have another look... Many of the movies there who made over $100M were considered failures, or at the very least, disappointments (Cars (2006), Mission: Impossible 3 (2006), X 3, The Last Stand (2006) or Superman Returns (2006) for example core to mind right away). Some movies that made over $100M were such surprises that critics and movie executives were all baffled (Borat (2006), Devil Wears Prada, The (2006) or Click (2006) come to mind. And finally, three digital animations were very heavily marketed and targeted straight at kids and did very well (Happy Feet (2006), Ice Age 2: The Meltdown (2006) and Over The Hedge (2006) make that list). And finally, in a case of sweet and sour news, the champ of the year by a very long margin was Pirates Of The Caribbean 2, Dead Man's Chest (2006). Everyone was expecting a success, but 1 Billion dollars worldwide? It's only the third film in history to have ever accomplished that (Lord Of The Rings 3, The Return Of The King, The (2003) and Titanic (1997) are the other two). So why is that not great news? If you talk with any movie exec now, their whole world has changed since this summer and the holy grail is now to make huge bets and reach that $1B mark. This means you'll see more crappy movies overall, and then occasionally, the monster hit.
2006 was a strange year. As customers, we have been shown clearly that the film business at large (studios, hardware makers, theaters, retailers, marketers... the whole thing) has no clue about what the consumer wants. All together, they are trying to push for their version of what they think we want. A the same time, for survival reasons, they are pushed to give us what we want (ubiquitous access to high-quality versions of content), but the politics of this large and complex business with many parties that compete with one another and yet, need one another to survive, is pulling out an actual reality in quite a consumer unfriendly space.In all of this though, i managed to see some 570 films this year (a record for me, and a figure that astounds me: where the hell did i get the time to do it?). Among those, i saw many really good films, and i must admit that most of them are foreign. I remain immensely entertained by South Korean cinema and i have very much enjoyed a rennaissance of sorts of Hong-Kong cinema. Among all those films i saw this year that i loved, you could check out (listed in alphabetical order):
Finally, a friend forwarded me a link to a great article on Cinema and the movie business. You can find it on the New Yorker's web site here. May 2007 be good to you, and may you watch and enjoy many great films from all over the world.