mgedwards – Page 282

Why the box office phunk?

I love movies. Between Korea and my son, I haven’t had much time to keep up with the latest offerings churned out by Hollywood. Perhaps even more than watching movies, I enjoy following the movie industry. For example, I love playing a game called Hollywood Stock Exchange (HSX), a free game site where you "invest" in upcoming films and "hot" actors. It’s a great way for me to test my investing mettle against my potential as a movie studio executive. Although I’ve been too busy to play lately, my ranking is still in the top 4% of HSX traders. I’m a methodical, patient investor who makes modest bets on movies. I recently read that Hollywood studios suffered through their 18th straight decline in weekend box office revenues, a modern day record. What gives? Why have movie box office receipts declined so dramatically this year? Is it because Napster has undermined the movie industry and people are skipping movies because they can download them for free to their iPods? Hardly. This box office decline is due to a confluence of factors. I see this trend continuing unless the movie industry changes its business model to accommodate a new reality. An industry that routinely hundreds of millions of dollars in investment on films is vulnerable to failure and business downturns, and it needs to adjust because its market is moving away from it.

Here are some reasons why Hollywood’s box office has declined:

The rise of alternative entertainment options, particularly gaming. The gaming industry, fueled by Sony’s PlayStation, Microsoft’s Xbox, Nintendo, Sega, and a slew of game makers such as Electronic Arts is fast capturing the eyeballs of America. Individual game releases are viewed in the vein of movies–they are costly to make, are preceded by marketing blitzes, and have a limited shelf life. A successful game like "Grand Theft Auto" or "Halo" can make millions. Legions of Gen Y’ers and Gen X’ers ages 10 to 40 are increasingly turning away from sitting in a movie theater to other entertaining pursuits. They want interactive experiences. Aside from being there for the occasional epic moment such as the end of the "Star Wars" saga, or the highly anticipated "The Matrix" sequel, they prefer to read the book or wait for the video. Movie studios need to consider how to make their offering more interactive beyond movie web sites with flashy online content.
Movie tickets are expensive and theaters are too inconvenient. Hollywood may have reached the near-term limit on how much it can get away with charging for a ticket. When it costs you $17 for a movie ticket, a small popcorn, and a soda, you know you’re paying too much. And that’s just for yourself! Plus, movie theaters are too far away and too much of a hassle for many people to bother with nowadays. Movie studios need to figure out how to bring their product to the masses, rather than expecting the masses to come to them. The movie distribution network and ticket-revenue schemes inked between studios and cinema owners is as outdated as the traditional automobile dealer network. It needs to figure out how to deliver content dynamically; for example, combining the concept of pay per view with movie distribution. Would you pay as much or more than a movie ticket to watch that brand new movie release on your digital cable? The answer is probably yes. The studios need to work with the likes of Comcast and DirecTV to offer another outlet to distribute original features.
Studios are not producing original, compelling content. You’re probably read this time and again, but it is so true. Just look at the top movies so far this summer. Another "Star Wars" film, another "Batman" film, a remake of the TV series, "Bewitched," a remake of "Herbie, the Love Bug," another zombie sequel, and another CGI animated film featuring cute animals. Can’t wait to see that remake of "War of the Worlds," another alien disaster flick, or yet another comic book turned into a movie ("Fantastic Four")? "Mr. and Mrs. Smith" is the only high-grossing feature with a somewhat original theme, although it borrows heavily from classics such as "The Scarecrow & Mrs. King," "The War of the Roses," and Schwarzeneggar’s "True Lies." Just like television needs to lay off its incessant urge to turn everything into a reality show, the movie studios need to throttle back on the number of remakes and sequels it makes. Indie film makers are keeping alive the flame of originality, although there’s no reason why Hollywood can’t make an original film that appeals to mass audiences. Start by reworking the canned plotline we all know and expected: develop character, key moment in character’s life, character responds, climax, happy ending.

You never know when…

One day in June 1983 someone manually entered some incorrect data. It was probably entered by a civil servant sitting in Washington, D.C. The person was probably a clerk manually entering document after document into a mainframe, inadvertantly typing in wrong information. The person has probably long since retired. Perhaps they have passed on. One thing is sure–the data would have had to have been entered in manually by someone reviewing a paper document. The data remained buried, unused for 22 years. The original document has long since been archived, decaying in some storage warehouse, and until today, the data entered sat archived in some mainframe’s memory, waiting to be accessed. It might never have mattered. Today, it mattered. Today, when I pulled up the data that could have really helped someone, I found out that it was incorrect. It was critical to this person’s case. Instead, the data cast a big shadow of uncertainty on what should have been an easy answer. Someone I tried to help today left without an answer, unsure of what will happen to them. Perhaps the erroneous data won’t matter. Perhaps it will. There may be another way to answer that person’s question. It amazes me that one small typo made in 1983 came back to haunt someone in the year 2005. It definitely highlights the value of accurate data, no matter how boring data entry is. It may be boring, but it is certainly not a mindless job.

Monsoon season starts

Monsoon season started today. It started pouring rain this evening, the first of many rainy days for the next couple of weeks. The monsoon season is scheduled to last from June 25th until about July 15th. During this period it will rain, rain, and then rain some more. We enjoyed our last couple of dry days quietly relaxing close to home as I recuperated from my illness. I’ve heard that two or three monsoons will come through Seoul this year. Although Korea does not experience typhoons, monsoons here nonetheless appear quickly and can lead to extensive flooding. Fortunately, our home sits on higher ground. Many of my neighbors are not so fortunate and are bracing for pooling water in their homes. In contrast, today should be close to the end of Seattle’s rainy season. During July and August the weather in Seattle is typically gorgeous. The weather is cool and dry, making for one of most pleasant summer experiences anyone could want. Seoul is a different story. When I lived in Seattle, I took pride in never using an umbrella, because locals hardly ever use umbrellas when it rains (Seattle rain is more of a light drizzle). In Seoul, my umbrella is primed to get some good use.

I was tired and irritable on Saturday afternoon because of my lingering illness. However, I placated my wife and went out shopping on Saturday afternoon despite the muggy day (monsoon season is close, and the weather in Seoul has been warm and humid). We went shopping at Namdaemun Market. My wife really wanted to buy a decorative cherry wood wedding box. She had seen it earlier this week at a shop in Namdaemun Market and could have bought then for about $350. I wanted her to wait until I had a chance to see it for myself. I wanted to see this decorative item she wanted to buy for $350. When we went to the same shop on Saturday, the shop owner, who recognized my wife, refused to sell it to her for less than $380. The shop owner claimed that the box my wife wanted to buy was of superior quality than the one she previously saw. I think she thought that my wife was intent upon buying the box and didn’t need to drop the price again. Such is the nature of bargaining. If you look too interested, you can’t get a good deal. So we walked away from a deal. My wife was disappointed she walked away from buying the wedding box this weekend, but I reassured her that she could find another one to buy. Now that I’ve seen it I don’t mind so much spending so much for a 14” decorative item. As she points out, it’s easy to spend $350 in Seoul. One can spend that much in a week buying lunch everyday.

Today we went to the Costco warehouse in Yangjae (there are three Costco warehouses in Seoul, five in Korea). When we lived in Seattle, we loved visiting our neighborhood Costco frequently to stock up on necessities and to buy a few specialty items. I hadn’t visited Costco since we left the states. I haven’t really had any reason to go there now that I’m living in Seoul, but I was curious as to whether Korea’s Costco warehouses were anything like the Costco warehouses I know and love in the U.S. The answer is yes, Korea’s Costco warehouses very much like Costco’s in the U.S. You can find most of the popular items Costco sells in the states, notably rotisserie chicken, muffins, books and CDs. However, some items I miss back home aren’t available in Seoul. I especially miss the poppy seed muffins I used to buy in Seattle. I couldn’t even find poppy seed muffins in Washington, D.C. And I couldn’t find the Greek salad I like. Still, I took home a 12-pack of chocolate/banana nut/corn muffins and some ready-to-bake chimichangas. I haven’t eaten those in months. Perhaps the most notable difference between warehouses in Korea and the states is the prices. That, and the fact that you have to pay in Korean won or use your Samsung card (AmEx not accepted). We noticed that most Costco prices here are about one-third higher than in the U.S., with the exception of books published in Korea. It made me long for the day when I walk into Costco and walk out with a case of toilet paper feeling and feel like I’d gotten a good deal. I don’t think I’ll visit Costco too often in Seoul. If you have a Costco membership and are planning to relocate to Korea, you may want to keep it, although you may not use it as often.