The top five best paid Hollywood actors – Robert Downey. Jr, Dwayne Johnson, Bradley Cooper, Leonardo DiCaprio and Chris Hemsworth – earned a combined US$250 million for the financial year June 2013 to June 2014. On the other hand, the top five best paid actresses earned about a combined US$150 million for the same period with Sandra Bullock leading the list follows by Jennifer Lawrence, Lennifer Aniston, Gwyneth Paltrow and Angelina Jolie.

While the top five actors and actresses enjoyed abundant harvest, the same cannot be said about Hollywood. By early September this year, it was official that Hollywood is in trouble. North America summer revenue barely cracks US$4 billion – an eight-year-low – and it’s 15% down from previous year. And if you want to be dramatic and throw in inflation accounting, this year is a 17-year-low.

The usual rules used by Hollywood to measure the success of films were not working. Who in their right mind could predict that “22 Jump Street”, made with capital of merely US$65 million, could earned a whopping US$193.3 million domestically? In comparison, the “Spider-Man 2” only made US$202.9 million but had swallowed US$200 million in production.

 

Thanks to global revenue, Sony’s “Spider-Man 2” grossed US$505.4 million to bring home a total of US$708.3 million otherwise this film is a flop. Meanwhile “22 Jump Street” earned US$128.8 million elsewhere for a worldwide total of US$319.4 million. But in terms of percentage, “22 Jump Street” made 391% returns while “Spider-Man 2” raked in merely 254% profit on investment.

Even “Guardians of the Galaxy” is struggling. Not one film has crossed $300 million domestically for the first time since 2001, though “Guardians of the Galaxy“ will ultimately reach that mark – it has grossed US$294.8 million in North America as of September 9, while worldwide help to bring in US$291.6 million for a total of US$586.4 million. Still, considering this film’s budget of US$170 million, it’s worse than “22 Jump Street”.

The same goes to Paramount’s “Transformers: Age of Extinction”. With budget of a whopping US$210 million, it barely scratched the surface when domestic market grossed US$244.7 million (as of September 7) but made a huge profit worldwide. Global audience dumped US$828.1 million for the movie, with China alone contributes US$331 million, thus enables Paramount to make over US$1.07 billion.

As of yesterday, September 11, neither Wall Street nor Hollywood analysts and executives believe the rest of the year can make up for the slide in revenue for the North America box office. Year to date, revenue is down 5.6% to $7.2 billion (from $7.6 billion in 2013). One of the reasons causing the problem offered by Sony Entertainment CEO Michael Lynton – too many similar superhero movies.

 

With only “The Hunger Games: Mockingjay, Part 1” (Nov. 21) and Peter Jackson’s “The Hobbit: The Battle of the Five Armies“ (Dec. 17) expected to match or exceed their 2013 installments, all seem to be gloom and doom in Hollywood. And if you’re in the motion picture and sound industries, it’s wise to find a new job, before you’re axed.

Preliminary statistics from the Bureau of Labour Statistics 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. That’s an 8% decline from 324,600 jobs in August 2013, and a 19% slide from 366,300 jobs in August 2012. On September 4, Warner Bros. Entertainment CEO Kevin Tsujihara told the studio’s 8,000 employees that layoffs were coming at every level.

In a bigger picture, Motion Picture Association of America released its statistics that shows that the industry supports a total of 1.9 million direct and indirect jobs for a total of US$111 billion in total wages in 2012, with the direct jobs generating $46 billion in wages, and an average salary 43% higher than the national average. While the weakness in domestic spells jobs cut in America, the strong demands outside of U.S. means producers are moving to international locations.

 

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September 13th, 2014 by financetwitter

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