Chapter 158: The Unforeseen Decline

[Chapter 158: The Unforeseen Decline]

During this time, film critics primarily earned their income from two sources: publicity fees from film companies and payment for published reviews in newspapers and magazines. Of course, top-tier critics often had additional revenue streams, like book deals or television appearances.

However, George Norse clearly did not belong to the top tier. If he had, a magazine wouldn't have so readily fired him under pressure from Columbia. Because of the blacklist, whenever a new film was about to release, George Norse would not only fail to receive a dime in publicity fees; he would also miss out on invitations to film screenings or premieres. Without access to exclusive previews, he couldn't provide insights about films ahead of regular audiences. Newspapers and magazines weren't very enthusiastic about reviewing movies already released, which massively reduced his writing income. Overall, his earnings plummeted by over eighty percent.

Being blacklisted by the six major film companies meant George Norse could no longer remain in the critic circle; the reputation he built over many years evaporated into thin air. As a veteran of the game with years in the industry, he had known the rules well. There were certain lines you just couldn't cross, and he had never done anything too outrageous in his career. After years of hard work, he had garnered a respectable reputation, even pulling in a coveted six-figure income annually.

Perhaps it was this prolonged success that led George Norse to become a bit arrogant, forgetting his place. He published several scathing articles, initially fueled by feeling ridiculed by Nicole; he meant to get even in a small way. Little did he realize how far-reaching that well-researched piece's 'influence' would be. By the time he understood how badly he'd miscalculated, it was too late, and he had effectively ended his career.

...

After the first week wrapped up, perhaps due to the turmoil, or maybe because of Eric's boost from the publicity, the movie grossed over sixteen million during the first four workdays, amassing over forty-three million in the first week -- three million more than Columbia had anticipated. This number filled Columbia with confidence.

Meanwhile, as they clarified the issues surrounding the paid reviews, the pre-discussed 'topic marketing' campaign kicked off, starting with several entertainment newspapers vehemently criticizing the product placement in the film.

One headline read, "The Ad Spectacle: We're not watching 'Running Out of Time,' but 'Running Out of Ads'!"

This series of eye-catching headlines pushed the topic into the limelight. Following the questioning surrounding the criticisms, the media's tone shifted to a more humorous stance. Columbia seized the opportunity, directing the majority of media commentary toward a more mocking attitude before their competitors could react.

Shortly after, they released a survey report about audience reactions. Columbia had prepared this ahead of time, targeting audiences just exiting the theaters, asking for their opinions on the product placements.

Among a random sample of 1,000 viewers, 76% did not notice the product placements; 15% sensed their presence but didn't care; 7% paid some attention, while only a mere 2% said they strongly disliked the ads.

To ensure credibility, they published an entire stack of the survey report visuals in the papers. This piece effectively set the tone regarding the product placement controversy.

Whenever this topic arose, many people noted that most hadn't even realized ads existed within the film -- it wasn't such a big deal. Coupled with other playful articles from Columbia's critics, the public's mindset quickly shifted.

Then Columbia stepped up to clarify, stating there were indeed ads in the film, but they weren't as exaggerated as those "irresponsible" media outlets claimed. They pointed to the recent controversy, asserting it was mere character assassination from competitors.

...

As the media manipulation continued, more people grew curious about the advertisements in the film. Just as the survey indicated, a large number had initially been oblivious to their existence.

By the time Columbia's competitors noticed and began trying to steer public sentiment against the product placements, Columbia dropped another bombshell.

On the second weekend of the movie's release -- early Saturday morning -- several newspapers jointly published a statement from Columbia.

"While the survey showed that advertisements did not affect the viewing experience for fans, to thank our supporters, after discussions with the production and distribution teams, we've decided to refund the $2 million received from product placements back to the fans. Starting from the day of this announcement, audience members can send in their guesses for all twelve product placements to the following address. We will randomly select 200 lucky viewers who guess correctly on a live television show, awarding each $10,000 in cash."

Attached to the statement were details about where to send letters, the deadline, and rules such as one entry per ID, making multiple entries void.

...

In an instant, the entire U.S. media buzzed again. Even many viewers couldn't help but notice this blatant publicity stunt.

Yet, even with that realization, it couldn't dampen the enthusiasm of the audience. After all, in the late '80s, $10,000 was a significant amount for American families. Most people already had a habit of going to the movies during holidays, so if they could just mail in their guesses post-viewing for a chance at ten grand, why not? Additionally, with 200 winners, the odds seemed pretty favorable.

The day after the statement was released, many theaters were packed to the brim, netting $13 million on that day alone. Sunday brought in another $11 million, and with over $8 million on Friday, the second weekend grossed a miraculous $32 million -- a nearly 20% increase during a fiercely competitive summer release period and the only movie to experience a revenue spike during that summer.

...

By the end of the second week, it earned over $49 million, bringing the cumulative total to $92 million. In contrast, another Columbia movie, Ghostbusters II, had been out for five weeks was already showing signs of fatigue, barely surpassing $90 million.

The wave of interest caused Batman's fourth-week earnings to drop 44%, only bringing in $16 million. Although the cumulative box office reached $148 million, if subsequent weeks saw a similar 40% drop, its box office would likely stay in the ten-million range. Given the current trend, it seemed likely to maintain more than ten millions for another three to four weeks, leaving the summer box office champion's fate uncertain.

This outcome left many film companies stunned, with even Columbia's executives feeling a sense of bewilderment over how quickly success had come. Columbia's stock quickly surged, exceeding a market value of $4.5 billion within weeks. Sony, which had nearly concluded a merger agreement, grew anxious, originally aiming to finalize by the end of September. Yet, Sony's executives repeatedly asked to sign the final agreement in August, aware that securing the summer box office crown would keep the stock soaring.

...

As the third week added a modest 26% drop, earning over $38 million, puzzled reporters attributed the trend to the public's insatiable desire for unexpected windfalls.

Though many film companies yearned to replicate Columbia's promotional lottery model, the summer film season had already peaked. The current releases were essentially the last major productions trying to rake in profits, and using a similar promotional strategy on earlier films had little value.

The films released afterward were predominantly regarded as lower-tier offerings rushing in for late summer money, so no company dared to put up $2 million for a similar initiative -- much less $1 million. The risk was too great; even if a film grossed $100 million, after theater cuts and taxes, the profits often dwindled to the low millions. Eric's success was a rare exception in the industry; even the most profitable franchises, like Lucas's, rarely brought home such substantial profits.

Columbia's strategy of using controversy to turn around the box office became a classic marketing case for film companies to analyze.

Eric wasn't concerned about others mimicking this approach, as this operation was a calculated risk. One or two times, it could be seen as innovative, but if overused, audiences would quickly think, "I came to see a movie, not to count ads," leading to backlash. Over time, it would become counterproductive.

*****

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