Friday, January 1, 2010

ROI: A Tale of Two Films

Return on investment: abbreviated to 'ROI', usually given as a percentage of an initial investment, and usually unrealistically high.

These projected returns are generally not to be trusted and mostly for good reason. Why? Mainly, as they most commonly emerge in the context on a vendor attempting to sell a business or asset- in which case, they (being the opportunistic agents for sale) will be wanting more than they can reasonably expect to achieve in dollar terms, but at least if they can spit out a palatable ROI, they can justify the attempted extortion- or, if all else fails, begin speaking about the vague notion of goodwill.

Now as I temporarily toss my skepticism under my bed alongside the dirty washing, let us get down to business- specifically, ROI in the context of two films: Paranormal Activity and Funny People.

In the spirit of keeping things simple, there will be no talk of the balance sheet nor depreciation of assets, we are talkin' 'cost of production' and 'revenue', and we are talkin' in US dollars. It's that simple.

Frankly, I don't go to the cinemas to watch any form of motion picture too often. This is not to suggest I do not have an appreciation for all things motion- I like driving, snowboarding, even plain walking. Truth be told, I have a fascination with film. This fascination, however, if kept carefully in tact by an opposing strong disdain (notice I chose a more emotionally-imbued word than 'dislike') for bad films. Whether this exists in the form of poor acting, storyline, chich├ęd scripting, or the obvious-incidence of a writer/director attempting to do too much- I have proven multiple times that I will walk out of the cinema, literally.

The most recent occurrence of the 'walk out' was during Judd Apatow's 2009 film "Funny People"starring Adam Sandler, amongst a seemingly competent cast ensemble including Seth Rogen and Eric Bana. According to this film had a production budget of $75 million and so far has yet to exceed the $65 million in worldwide revenue. This is without included marketing and distribution costs which, needless to say, would add many more millions to the break-even point. So why the miserable failure? Good question... and easy to answer.

I'm not sure if Sandler subscribes to the same school as Seinfeld in openly declaring an inability to act, but maybe he should. On the other hand, maybe he wasn't acting? The film is characterized as a comedy-drama (the first giveaway that things were going downhill) and involves a tedious plot whereby a comedian (played by Sandler) suffers from a form of lonely depression that cannot be bolstered by any means of materiality nor womanizing.

My question is this: when has comedy ever gone with drama? Now, I am all up for innovation in the creative process, but surely you have to draw the line somewhere! Maybe the direction sought some kind of interesting dichotomy, the likes of which could rival the sweat-and-sours of this world. But there was not light bulb moment here. Instead, the dualistic scripting can be most easily analogized as oil and water. You don't use water to lubricate an engine, and you don't drink oil. Whilst I'm more than willing to be proven wrong, comedy and drama need to maintain their distance. The courting period is over. There is no chemistry.

So financially speaking, Funny People was a flop. Critically, the reviews were mixed. Personally, I walked out before seeing Eric Bana- who I am still convinced did not star in this film at all. It was released onto DVD and Blu-ray in November 2009. Hopefully, from a business perspective, it is able to recoup some of its financial losses. ROI speaking, there was no return on investment. There was a massive loss, very much unlike director Apatow's previous effort with "Knocked Up" which was produced for $33 million and grossed over $219 million at the box office.

If I could now turn my attention to some paranormal activity in the box office, we will discuss Oren Peli's descriptively-titled "Paranormal Activity" that was released in the US in October 2009 with a reported budget of a mere $15,000, excluding marketing costs.

Peli's film grossed more than $100 million in the US alone and, to date, is thought to hold the record for the greatest return on investment for any film in history. The previous unofficial record holder was the Blair Witch Project.

The plot was not complicated. The filming was largely confined to one fixed tripod-shot set on night vision in Katie and Micah's (two main actors) bedroom, recording supernatural 'activity' that occurred during the night.

Patrons will see a film for many reasons. Often, the actors are the draw card. Sometimes, the director has the 'pull'.
But this was the first time I had ever seen a film based on return on investment- and I am sure I am not alone on this one.

What is the lesson to be learned here? I thank one of my high school mathematics teachers for this one. Kiss. Keep it simple stupid.

Forget about elaborate genre mixes or complicated story lines. Indeed, it is argued that genius internet viral marketing was the key behind Paranormal's dominance at the box office; but equally, without an intoxicating simplicity of "the scariest film ever made" or a simple "you won't be able to sleep at night after this", no viral assistance would have carried this to box office superstardom.

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