The movie business turns on DVD sales. Strong DVD sales are generally propelled by strong theatrical box office. And what propels theatrical box office?
In most cases, nearly half of a movie's total audience turns out in the first week of release, which means there has been very little or no word of mouth motivating most of the audience. In other words, many people go to a movie without any real information about it - without even reading a review. Or, put most cynically: Most of the time, there is no relationship between how good a film is, and how many people turn out to see it.
So what makes people go to a movie? Generally, it is awareness - or now, in Hollywood parlance, "pre-awareness." Since studios cannot spend enough on advertising to buy awareness (there is so much advertising noise in the marketplace these days), there is a tendency to make movies with familiar titles, characters and stories: "The Dukes of Hazzard," "Spider-Man," "War of the Worlds," "Charlie and the Chocolate Factory." In the past decade, most box-office revenue has come from pre-aware titles, which includes sequels ("X-Men 3," set for a May 2006 release) and remakes ( "King Kong," Dec. 14).
When word of mouth does happen, it moves with lightning speed: teenagers will send a text message to friends during the first show on Friday about whether a film is good or bad. While it might not be true - yet - that most people decide on the Thursday before a movie opens if they will see it in a theater or buy it on DVD, certainly 24 hours after a film's theatrical opening most of the audience has in effect made that decision.
DVD's are a maturing industry, and - though sales have slowed over all - still an industry driven by quick and directed purchases. If a consumer wants to own a movie, he or she will probably buy it as soon as it is released. Movies are just entertainment commodities, after all, and instant commoditization feeds instant gratification; if the consumer's need isn't gratified immediately, the need wanes.
What does this all mean? Other than the fact that the movie business is riskier than high-stakes Texas Hold 'Em, it means that the economics of the industry are being propelled by sweeping technological changes. Among them are digital projection (which allows films to be broadcast to theaters from secure servers, even possibly allowing different versions to be shown in different communities); shrinking distribution windows in which more films will open simultaneously in theaters, on home video and on cable television (on Jan. 27, the Steven Soderbergh film "Bubble" will be released at the same time in theaters, on cable television and DVD); and new forms of delivery (soon satellite radio services will be able to transmit video to cars). But the underlying business model of the motion-picture industry has not yet adjusted to the momentum or velocity of change.
Until it catches up - if it ever does - we can expect to see more instant hits and instant failures, more Hollywood tales of overnight heroes and goats.
http://www.nytimes.com/2005/11/13/movies/13leip.html?pagewanted=1
