Hollywood Code Red: 2014 Already a Write Off, 19% of Jobs Cut

Hollywood Code Red: 2014 Already a Write Off, 19% of Jobs Cut

When you combine Variety‘s story about a 19% drop in entertainment industry jobs, and The Hollywood Reporter‘s story about the 2014 box office already being written off as a “disaster,” things look pretty glum in the business of show. And probably for good reason.

No one expected Summer 2014 to tank. No one. Everyone’s saying, “Wait till next year,” but this year there was a Spider-Man, some X-Men, a bunch of Apes, more Transformers, a Godzilla, a gaggle of Expendables, Adam Sandler, and Melissa McCarthy — oh, and two Marvel movies. Moreover, this past Labor Day weekend was the worst since the post- 9/11 Labor Day weekend.

What is scary for the film business is that other than “Guardians of the Galaxy,” almost everything under-performed. Even a huge opening meant nothing, because the following weekend’s drop-off was so steep. Sure, money was made overseas, but advertising and promotion are more expensive, and the cut of the gross is oftentimes smaller. In China, for example, studios only see a 25% return.

No one knows why. No one can explain it. And that has everyone worried.

Brands, pretty good reviews, good weather… But poof, a 15% summer slide, the worst in years; and that is with inflated 3D and IMAX admission prices. 2014 is a already a write off, even if the upcoming Hobbit and Hunger Games perform to expectations.

If I may speculate for a moment… One thing that might be happening is that the gimmicks aren’t enough anymore. Let me back up a bit…

Domestic admissions — the number of people purchasing a ticket to see a movie — have been flat for more than a decade, even with an increase in the American population. Revenues have increased thanks to gimmicks like 3D and IMAX. For example, at my local theatre, a regular admission is $10.00, while a 3D admission is $14.00.

These gimmicks have extracted more money from the same number of customers.

Gimmicks don’t last forever.

The second thing that might be happening is that the shrinking of the moviegoing pool is finally coming home to roost.

Hollywood is making fewer theatrical films, and a huge majority of those are either aimed at teenage fanboys or the hoity-toity who attend festivals that should be called: Arty Pretentious Shit No One Will Ever See.

Don’t berate me with your exceptions that prove the rule. It is a matter of science and fact that, due to the drop of films aimed at those grown-ups who don’t think Woody Allen hangs the moon, tens of millions of Americans have gotten out of the movie-going habit, even when there’s a title aimed at them. Instead, they’re at home watching “Mad Men” on a 55-inch screen and eating a 25 cent bag of microwave popcorn.

How do we know this downturn is worse than the entertainment industry is letting on? A 20% cut in entertainment industry jobs in just two years isn’t a blip, it’s a catastrophe:

The U.S. economy has seen a steady erosion of jobs in the motion picture and sound industries, according to the Bureau of Labor Statistics.

Preliminary statistics from the BLS show that employment in those two industries has dropped to 298,000 in August — marking the first time in the past decade that the number has dropped below 300,000, and representing an 8% decline from 324,600 jobs in August 2013, and a 19% slide from 366,300 jobs in August 2012.

The monthly numbers began edging down in the latter half of 2013 to under 350,000, then slid to 329,900 in December. The figure slid to under 320,000 in February and plunged in May to 302,900.

This doesn’t include the upcoming cuts at Warner Bros. in Burbank, where 8000 people are currently employed.

Can Hollywood turn it around?

The music business?

Uhm, no.

The music industry has been “disrupted” into oblivion. As far as the film industry goes, it’s not dead. Far from it. It’s just not a growth business anymore. The fact that admissions have been flat for more than a decade is a big, big deal.

I’m going to give you a deeply researched scientific box office study involving one person: Me.

If you go back and look at my reviews of the summer movies, I had a pretty good time. Most of the movies were pretty good, some great. If it weren’t for my job, though, I’d wait for Redbox… for all of them. I may be romantically close to 50, but I had as good of a time as any teenager this summer. Still, I feel no compulsion to go to a theatre. So…

Revenue-wise, was 2014 an inexplicable blip no one will ever understand, or a sign of an American public tired of grown men in tights, CGI, and artsy-fartsy?

Let’s revisit this next year.

John Nolte on Twitter @NolteNC


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