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A Summer of Hits and Flops Leaves Hollywood Uncertain

Steven Spielberg saw it coming. In June, speaking at a University of Southern California event with George Lucas, the Lincoln director said, “There’s going to be an implosion where three or four or maybe even a half-dozen mega-budget movies are going to go crashing into the ground, and that’s going to change the paradigm” — forcing the industry to rethink its reliance on gargantuan spectacles. A month later, the first part of Spielberg’s prediction has already come true: The latest high-profile calamity at the box office is the ill-buzzed R.I.P.D., which followed such heavily marketed titles as Pacific Rim, The Lone Ranger, White House Down and After Earth in failing to attract its expected audience. Meanwhile, The Conjuring, a smaller, Exorcist-style chiller from Saw director James Wan, more than doubled its production budget in just one weekend.

Summer 2013 is unquestionably the season of the über-flop. But do these numbers add up to the paradigm shift that Spielberg anticipates? For moviegoers exasperated by CGI whooshing — and 150-minute running times padded with a solid hour of action — a victory for the little guy might seem like good news. Still, the tent-pole collapse isn’t quite as stark as headlines might imply. With a mammoth gross of $407 million, Iron Man 3 has become the year’s top-earning movie, while Fast & Furious 6 continues a long line of success for its franchise. From the theaters’ perspective, this summer has been a bonanza. “We had four straight weeks of more than $300 million in box office, which has never happened,” says Patrick Corcoran, vice president of the National Association of Theater Owners. (Corcoran dismissed Spielberg and Lucas’ other widely reported prediction: that movie theaters would one day adopt a film-by-film variable pricing structure akin to Broadway’s.)

This summer’s modestly priced films have also done well. The Conjuring, The Heat, Despicable Me 2 and This Is the End — all made for between $20 million and $76 million, according to the website Box Office Mojo — have doubled or tripled their costs on the basis of U.S. moviegoers alone. Compare those grosses with The Lone Ranger’s $81.9 million (and budget of $215 million), and the choice as to which type of movie is a better investment seems clear.

“There’s going to be a repricing of risk,” says Harold Vogel, author of Entertainment Industry Economics. What we’ve experienced over the last half-decade has been the creation of a blockbuster bubble, with all the major studios herding toward the same global “event movie” model. Films with built-in brand recognition are easier to market overseas; action sequences and special effects don’t lose much in translation. Always present, the emphasis on repeating past successes and finding tie-ins and spinoffs has only grown. With administrative costs like accounting and insurance relatively level from film to film, a $200 million superproduction could thus be seen as a safer bet than several $75 million projects.

In an interview with New York magazine critic David Edelstein, producer Lynda Obst also pins the current trend toward gigantism on the increased importance of the foreign market, coupled with a collapse in DVD sales, which once provided a safety net for midrange pictures that didn’t pan out. Obst’s new book Sleepless in Hollywood features a list of movies she’s certain wouldn’t get made today, including such Oscar winners as Moonstruck and Forrest Gump.

Cable offerings, Netflix and video-on-demand come up as examples of the increased competition Hollywood now faces. With Spike Lee turning to Kickstarter, Steven Soderbergh making Behind the Candelabra for HBO, and Joss Whedon filming a black-and-white Shakespeare movie in his backyard, the paradox, amid a field of crashing tent poles, is that it’s now easier to make a small film than ever.

Those eager for Hollywood to turn to a more modest portfolio may get their wish soon. But with the lag between green-lighting and releases as long as it is, a correction of the magnitude that Spielberg suggested will take time. “In 2016,” Vogel reminds us, “You’re going to have a whole bunch of Star Wars sequels.”