300's Lessons for Hollywood

This modest action epic doesn't have any big names and came out in the dead seasonbut it's a bona fide blockbuster

Anyone who sat through the blood, gore, and grunts of this year's out-of-nowhere hit movie 300 knows it was hardly filmmaking at its best. In fact, it was more video game than art; a blur of severed limbs and muscular actors playing out the last stand of 300 Spartan warriors in the 480 B.C. Battle of Thermopylae.

But, boy, how it has sold tickets. Indeed, with $181 million in U.S. box office sales (and $309 million worldwide) in its first month, Zack Snyder's wonderfully violent film may just end up being the most profitable flick of the year. That's what a $60 million budget—reasonable by Hollywood's action film standards—no big-name actors, and a heck of a team of computer graphic artists will get you.

The Warner Brothers' (TWX) offering is among a handful of films that prove movie studios sometimes win in spite of themselves. So far this year, Hollywood has released four films that either have or will shortly climb past $100 million at the box office—that's the most Hollywood films to hit that mark in the first four months of the year. (Last year only one, Ice Age, passed that level, the year before three.) And better yet, none of this year's winners broke the bank, with four of them costing around $60 million to make.

There are some great lessons to be learned from the early-year releases—and in the hope that there are a few movie executives out there who might, I offer up some thoughts from this audience of one moviegoer:

Lesson No. 1: Sometimes it really is about what you put on the screen, and maybe you don't need to put as much up there as you might think. As far as epic wannabes go, 300 is modest, yet audiences are eating it up. The nonstop action came from computers, the actors were, well, wooden, and still the trailers and commercials were mesmerizing. Sometimes a great visual is worth more than heavyweight actors and a legion of writers.

Lesson No. 2: The publicly traded companies that own your studios care about return on investment, not box office. Look at Ghost Rider, Sony Pictures' (SNE) Spider-Man wannabe starring Nicholas Cage as the half-man, half-skeleton motorcycle-riding hero who mows down bad guys in a ball of fire. It cost $110 million to make, hardly a cheapie, but probably about a third of what it'll cost Sony to bring Spider-Man 3 into movie theaters on May 3.

Throw in the usual $60 million in marketing, and Sony will be spending close to the GNP of a small country this spring to get the web crawler out and about. So with $214 million overall in worldwide box office sales, according to the Web site Box Office Mojo, I'm betting Nick's ROI will be higher than what Toby McGuire swings home with.

Lesson No. 3: Who says you need to crowd the screen with big-name stars? With all due respect to the folks who are bringing George Clooney, Brad Pitt, and friends back this June in Warner Brothers' Ocean's 13, I'm going to bet the return on investment for Paramount's (VIA) Eddie Murphy comedy Norbit will be better. Producer John Davis, who paid Murphy his usual $20 million, managed to keep the costs down to only $60 million by "watching every dime, making sure we planned it down to the second, so that there were no surprises."

Lesson No. 4: Timing, timing, timing. Why does everything have to be a summer release? Yes, I know that summer releases make for magazine covers and great happy talk in the Hamptons. But what's wrong with the mega-bucks that Walt Disney (DIS) is pulling in from its biker comedy Wild Hogs, which starred some well-known but hardly at the top of their earning power actors: John Travolta, Tim Allen, Martin Lawrence, and William H. Macy?

Hogs was released in early March—way, way before the crush of films began, and it cost only $60 million to make. According to Disney studio Chairman Dick Cook, the flick had the good fortune to get a full hour on Oprah before its release largely because it was the highest-profile movie out there at the time. For a film that was banking on a female audience, Oprah Winfrey was a God-send.

Now, I realize there's no chance Hollywood will learn its lessons in time for this summer. The lineup is already set, and it includes some megabudget blockbuster attempts: Disney's latest Pirates of the Caribbean flick, DreamWorks' (DWA) third Shrek offering, and Fox's (NWS) Fantastic Four. In fact, over the four-month period that starts in May, studios will release no fewer than 10 films with budgets of more—in some cases way, way more—than $100 million.

The coventional wisdom among Hollywood biggies is that a big-budget film needs everyone in its targeted audience to see it once to sell $250 million worth of tickets. Repeat business will take it over $300 million, which it what some of these films need for bragging rights. Will the upcoming Pirates of the Caribbean gross $423 million like the the last one did? I don't know, but I know it has to be huge at the box office for Disney to get a decent return on its investment.

So who will the losers be in this mess? I'm betting that Bruce Willis, starring in Live Free or Die Hard, may end up wishing he hadn't brought his gun-toting shtick out of retirement, and that George Clooney and the rest of the Ocean's 13 gang will find 13 isn't their lucky number. Even Harry Potter may seem less magical in his next installment.

Does any of this mean Hollywood will learn its lesson and send a blockbuster out next spring? Nope. That's Lesson No. 5.

Before it's here, it's on the Bloomberg Terminal.