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"We're fucked," said Tom Bernard, co-president of Sony Pictures Classics. "It's about as bad as can be. I can talk about it, because I'm seeing it every day."
Mr. Bernard's dour mood is tied to the notable declines in attendance in major specialized film markets such as Atlanta, Boston, Chicago, Dallas, Miami, San Diego and Seattle -- declines he said he believes are tied directly to the departures of influential film critics in those cities.
"It's the consistent relationship [with a critic] that gets people to go to these movies," said Mr. Bernard. "[Editors] felt they should get critics that connect to that younger audience that's getting its news online, but they're not looking at how the box office is affected when the critic changes."
Departing old hands
Faced with shrinking margins from evaporating classified advertising and the failure to replace all the display-ad dollars headed online, dozens of newspaper critics -- many of them with longtime gigs and large followings -- are being bought out and replaced (if they're replaced at all) by stringers, wire-service copy or cheaper, younger critics.
"Our [audience] numbers in Chicago are down 20%, and it's only been three months since [critic] Michael Wilmington left," said Mr. Bernard.
Indeed, Newsday's John Anderson, Newsweek's David Ansen, The Village Voice's Nathan Lee, The New York Daily News' Jami Bernard and Jack Mathews, the Chicago Tribune's Mr. Wilmington, The Atlanta Journal Constitution's Eleanor Ringel Gillespie and the San Diego Union Tribune's David Elliott have all departed from the papers.
For Hollywood, the timing couldn't be worse. This Christmas, Columbia will release "Seven Pounds," starring Will Smith as a suicidal IRS agent. Miramax will release "Doubt," with Meryl Streep as a nun who confronts a priest suspected of sexually abusing a black student. Warner Bros. will release "Gran Torino," with Clint Eastwood as a disgruntled Korean War vet out to reform a reprobate teen carjacker. Paramount is betting $200 million on the CGI epic "The Curious Case of Benjamin Button," with Brad Pitt as a freak who ages in reverse, dooming his love affair. Focus Features has "Milk," starring Sean Penn as America's first openly gay city official; he gets assassinated, in case you're wondering.
It's not exactly light fare. Said one studio marketing chief: "This is a knife's-edge game we're playing."
Folding smaller divisions
Complicating matters, studios are also shuttering money-losing specialized divisions faster than you can say "Sundance." This spring, Time Warner gutted New Line Cinema and shut down both Picturehouse and Warner Independent Pictures' specialized labels, while in July Viacom's Paramount reabsorbed its Vantage label into the larger studio.
Those specialized film divisions used to give their unique movies extra TLC. Their marketing was custom-tailored to reach certain target demographics, and their distribution was incremental, building from a handful of screens and cities to a few dozen to a few hundred or thousands -- and sometimes back down again. But in recent years, buoyed by breakout hits such as "Little Miss Sunshine" and "Juno," the major studios developed unrealistic expectations for what their specialized film divisions could do, and flooded the market with releases. The results were not pretty: After a high of $418 million in 2006, specialized grosses plunged to $330 million last year and have yet to cross the $200 million mark this year, according to Variety and Rentrak box-office figures.
"What's happening this year is that the same serious films are coming out under different auspices," said Kenneth Turan, the lead critic for the Los Angeles Times. "The studios all say, 'A film is a film. We can handle those releases.' But the question is, 'Can they?'
Marketing departments at big studios excel at opening blockbusters everywhere, simultaneously, and the global consumer brands who serve as their promotional partners on such event movies lend between $30 million and $40 million of additional TV exposure via commercial tie-ins -- additional exposure none of this winter's tricky films will get.
Still, not everyone is panicked. In an e-mail response to an Ad Age query about the big studios' aptitude for marketing specialty films, James Schamus, CEO of Focus Features, replied, "Three words to you doubters: 'Million Dollar Baby.'"