Binge And Purge at the B.O.

By RICHARD CORLISS

Movie moguls may see themselves as top-scale versions of the Robin Williams character in Hook: middle-aged execs who are Peter Pans at heart. But these days, they must feel more like Steve Martin in Father of the Bride: footing the bill for an endearing ritual whose costs have spun out of control. There's just one difference. The moguls want everyone to come to the reception.

Last year not enough did. Most people waited for the home video version. While Americans rented 4.1 billion cassettes (an all-time high), they bought just under 1 billion tickets (the lowest in 15 years). Audiences ventured out in spurts: last winter, in early summer and then in a record-breaking Christmas rush. Other times, they stayed home in droves.

But if it was not the best of years, it was also not the worst -- at least not in a time of recession. "I bet Silicon Valley would happily trade years with Hollywood," says Martin Grove, film columnist for The Hollywood Reporter. "So would Detroit. So would the magazine industry."

The industry's slump is cyclical, as is its minisurge. "When times are good in Hollywood," notes Variety's Art Murphy, "people get careless. They make films that shouldn't be made, and these films turn off the audience. Then, when times are bad, the belts get tightened, and that starts an upturn in quality. It's binge and purge." Same with the moviegoer. A pinched consumer is a picky consumer.

But a pinched studio boss may not be a thrifty one. In 1991 box-office revenues dropped about 6.4% (to $4.7 billion), but the average cost of making a picture increased 10% (to $27 million). And the hit films are often even pricier. "Hollywood," Grove says, "has lost sight of a basic economic equation: box-office winners, which are few and far between, pay for losers. Today a big-budget film is considered a success if it simply breaks even. And that doesn't allow any way to pay for the losers."

Disney chief Jeffrey Katzenberg, who a year ago wrote a memo urging more pinching of pennies and less coddling of stars, is seen by some as a hero for pointing the way to financing in hard times. (Variety called 1991 "the Year of the Memo.") His approach seems to be vindicated by the Disney hits Father of the Bride and Beauty and the Beast. "I wish there was a mythical answer to why some movies do badly and others do well," says Katzenberg. "Unfortunately, it all distills down to one simple notion: when the movies are good, the audience will come."

Many movie analysts subscribe to this charming tautology. (Moviegoers go to see good movies. What are good movies? Movies that moviegoers go to see.) The Christmas hits answered a more pertinent question: Who are the moviegoers? As usual, families and the young. "In 1991," says Murphy, "a lot of films were targeted to those over 25. But who've been losing their jobs recently? The 25- and-ups. The danger is that the industry will follow this yuppie generation right into the grave."

The last of the Hollywood pashas -- making big-budget films for the biggest audience -- is Peter Guber, grand pasha of Sony Pictures Entertainment, which owns Columbia and Tri-Star studios. Though Guber had the low-rent hit of the year, Boyz N the Hood (which paid off its $5.9 million budget nearly tenfold), his films are famous for their high price tags. Terminator 2 cost nearly $100 million; Bruce Willis' Hudson Hawk was a $55 million bomb.

Tri-Star's Hook cost $70 million, with more still due, in profit- participatio n deals, to director Steven Spielberg and the film's four stars. On its opening weekend, the picture's grosses were so lackluster that % industry wags dubbed it "Hudson Hook." But Hook has since flourished and may end up just behind Terminator 2 and Robin Hood. That would make the average cost of 1991's top three moneymakers a horrendous $72 million.

So what's the moral? Guber would say spend what you have to. "You have to look at it in a larger perspective," Guber says. "This is a business; it isn't just called show. It's not any film at any price at any time. It's the right film at the right price -- and controlling those costs -- at the right time. Obviously, you can't make Terminator 2 for the same price as Boyz N the Hood. It would look like Term, not Terminator. And it would star Arnold Schwartz, not Arnold Schwarzenegger." The investment, in star lure and production values, paid off. "We'd be foolish to apply a formula that says we can only make pictures that cost $10 million," argues Guber. "No moviegoer says, 'I think I'll go down to the Criterion. I hear they have a film that came in on budget.' "

O.K., but we don't hear anyone saying, "Let's go see Billy Bathgate. I hear it cost Disney a bundle." So why not just spend less money? Partly because the movie industry is built on dreams -- its makers' as well as the audience's -- and moguls want to think like suzerains, not like CPAs. If they can have fun spending way too much on a two-hour entertainment that will cost the consumer only a few dollars, let them do it. And maybe they'll get a few hundred million back. Moviemaking, after all, is a show. It isn't just called business.

CHART: NOT AVAILABLE

CREDIT: TIME Chart

[TMFONT 1 d #666666 d {Source: Variety}]CAPTION: BIG WINNERS

BIG LOSERS

With reporting by Georgia Harbison/New York