While waiting in line this 4th of July to purchase tickets to Michael Moore’s new movie Sicko, I noticed that the big hit (at least in Daly City) was Transformers – a movie who’s biggest stars are computer-generated images (CGI) of 1980s toys. Ratatouille was also in high demand as well, the latest Disney/Pixar animation movie.

Pretty amazing that stars of the top movies over the 4ththe ultimate time to release a blockbuster – aren’t the stars, but rather the technology.

This fact is but one reason to conclude that the days of multi-million dollar movie stars like Tom Cruise and Demi Moore are numbered. As I see it, there are four trends that spell doom for mega-stars in the future.

1. Advances in Animation. Animated movies are no longer for kids. The clever writing and amazing graphics make Pixar films (and wannabe Pixar films, like Shrek) huge fan favorites. And sure, these movies do employ movie stars for the voice-work, but frankly celebrity voices aren’t the draw anymore; rather, its the creativity and amazing special effects that draw audiences. By the way, eight of the top 50 movie openings of all time are animated features – and all of those were released in the last seven years. Strike one.

2. Movie Attendance Down, Internet Attendance Up. Since 2002, annual movie attendance in the US has declined by about 200 million tickets. In approximately the same time period, Internet usage has increased 121%, to the point that today about 91% of all Americans have Internet access. The younger generation has lots of online diversions – Facebook, Second Life, World of Warcraft – that are as interesting and much cheaper than a night out at the movies. Strike two.

3. Increases in Broadband Speed Enable Online Downloads, Illegal or Otherwise. There was a time when only the music industry needed to worry about online downloads killing their business. That time has passed. As more and more American households upgrade to broadband Internet service and faster, more powerful computers, online movie downloads are becoming increasingly popular.

And that’s not good news for the movie industry. A recent study revealed that the number of illegally downloaded movies outnumbered legally downloaded movies five to one. The study suggested that six million households had illegally downloaded a video within a one month period.

As the music industry has discovered, you can prosecute illegal downloaders all you want, but that won’t make the problem go away. And even if you do introduce programs like iTunes, the price you can charge for your goods is far less than the olden days of selling through WalMart and electronics stores.

Translation: the secondary market of DVDs and movie rentals is in trouble, and this spells big trouble for the movie industry, which relies heavily on these outlets for revenue. And of course, what’s bad for the movie industry is bad for the movie star. Strike three.

4. Digital Cameras Make Low Budget Easy. In many respects, it’s cheaper to make a great movie today than it is to make a great video game. The average PlayStation 2 video game costs over $8 million to make, yet independent films like Saw, Napoleon Dynamite, or the embarrassingly bad Blair Witch Project, can often be made for a few hundred thousand dollars.

Digital cameras, computer editing software, even screenwriting software, have all made it possibly to create high-quality films at a fraction of the cost. These films are often a great deal for movie studios as well, as they can sit back and wait until a film gets rave reviews at the Sundance Festival before having to invest a penny of their own money.

Compare that to the millions of dollars wasted on ‘blockbusters’ like WaterWorld or War of the Worlds and it makes good business sense to find as many independent films as you can to fill your release schedule.

Once again, these independent films rarely have huge star-power. Instead, they have stories that are often too edgy for the studios to make, with no-name stars, no-name directors, but an outstanding end-result.

Strike four for major actors.

Animation, declining movie attendance, increased Internet usage, illegal downloads, and cheaper and better independent films. Tom and Katie, don’t buy that summer home yet.

1 Comment

  1. Steve July 5th, 2007

    If you were really standing in line to see Sicko instead of Transformers, I’m disappointed. You may be a savvy marketer, but I guess when it comes to your movie taste, there’s less than meets the eye.

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.