Explaining Southern California's economy

No Hunger (video) Games, please

Opening Night Of Lionsgate's "The Hunger Games"

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Opening Night Of Lionsgate's "The Hunger Games" at the Regal Cinemas L.A. LIVE Stadium on March 22, 2012 in Los Angeles, California.

The first installment of the film adaptation of Suzanne Collins' blockbuster young adult series "The Hunger Games" opened at midnight. It's expected to break all manner of box-office records, get its studio, Lionsgate, back on track, and inspire fevered debates among parents about whether their kids should be allowed to see a movie about children in a dystopian alternative future killing other children for sport.

From a business point of view, there's a larger question to be asked, beyond the philosophical and ethical ones that have already been addressed: Will "The Hunger Games" inspire massively successful video-game and merchandising tie-ins? And at a deeper level, who would want certain kinds of potentially inevitiable "Hunger Games" video games/merchandising?

The Wall Street Journal has already covered the business case for Lionsgate. It's good but not great. The studio could make around $100 million. But that's just the movies. And a cinematic franchise, as George Lucas discovered when he retained what were in the 1970s thought of as fairly worthless licensing rights. is waaayyy more than the movie now. In fact, you could argue that the film is just a large moving billboard that's seen indoors.


Disney earnings: Maybe there isn't a tech-entertainment connection

World of Color

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"World of Color," a water show that opened last year, is credited with drawing more people to Disney California Adventure.

Walt Disney Co. reported first-quarter earnings yesterday, and they were fairly good: net income was up 12 percent.

But the growth came largely from ESPN and theme parks. If you study the earnings statement, you can spot something alarming in two critical parts of the business of the Mouse: movies and video games.

This is from Bloomberg:

Seven Disney films in U.S. theaters in the quarter collected ticket sales of $239 million, a 33 percent drop from $357.6 million generated by nine movies a year ago, according to Box Office Mojo, an industry researcher.

The studio is in talks with Coinstar Inc.’s Redbox and other services to impose a 28-day delay on rentals of new DVDs, [CEO Bob] Iger said on the call. The delay is being sought because of the industrywide drop in DVD and Blu-ray sales, he said.

The consumer products unit reported profit little changed at $313 million on a 3 percent higher sales of $948 million.

Disney’s interactive division registered a loss of $28 million. Sales tumbled 20 percent to $279 million. The unit is cutting costs and taking steps to raise revenue with a goal of becoming profitable in the next fiscal year, Iger said. It hasn’t shown a profit since Disney began breaking out the results in the final three months of 2008.


Can Hollywood win young men back from video gaming?

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Activision’s video game, "Call of Duty: Modern Warfare 2," shattered sales records and became the biggest release of any entertainment property ever in 2009, earning $310 million in 24 hours and solidifying video games as the entertainment medium of today.

At The Wrap, Sharon Waxman offers a list of remedies for what ails the movie business. One of them jumped out at me:

Find a way to connect the gaming obsession of what used to be the core moviegoing audiences – young males 13-24 – with the movie experience. Learn from that interactivity and use that to drive them to the multiplex. (This is a challenge for marketing geniuses. Hollywood has plenty of those.)

Sounds great, but this isn't a marketing problem — it's a medium problem. Apart from technical innovations in digital filmmaking, special effects, and 3-D, the movies are basically the same as they were 30, 40, 50 years ago. A bunch of people sit in a large darkened room and wait for huge moving image to be projected onto a screen. The seats are more comfortable and the sodas are vastly larger. But the medium is about as 20th century as could be. Mid-20th century.