Rethinking the Seasonal Strategy

Illustration by Christoph Niemann

Last month, when “American Sniper” earned ninety million dollars in its first weekend of wide release, it demolished one of Hollywood’s hoariest myths—that opening a big movie in January is a recipe for disaster. For decades, Hollywood’s release strategy has been governed by a simple calculus: summer is for blockbusters, the end of the year is for classy Oscar bait, and the other months are for stuff you fear no one wants to see. As John Fithian, the head of the National Association of Theatre Owners, put it to me, “Most big releases have been clustered into just five and a half months—May through mid-August, and then November and December—while the other six months of the year have been a pretty fallow period.” Now that paradigm is shifting.

Hollywood’s reliance on seasonal clustering dates back at least to the early seventies, and people have always disliked it. In 1989, Janet Maslin wrote, in the Times, “January is to film releasing roughly what the Bermuda Triangle is to navigation,” and, just a couple of years ago, the movie critic Ty Burr suggested that studios stop releasing movies in January entirely. Clustering is no fun for moviegoers, since it leaves little to see much of the year. And it’s tough on theatre owners, the most vociferous critics of the strategy, who find themselves running a year-round business that has products people really want for less than half the year.

If clustering is unpopular, why do studios do it? The fundamental reason is that our appetite for going to the movies varies through the year. Studies suggest that we’re more likely to go over big holidays; when the weather’s warm; and when kids are out of school. As a result, July’s box-office is, on average, twice as big as January’s. If you’re going to release a tentpole movie, it makes sense to do so when you have a chance of reaching the biggest audience possible, which usually means the summer.

But the strategy has drawbacks. For one thing, much of the seasonal variation in box-office revenue is a statistical illusion: if you release blockbusters in July and dogs in January, no wonder people go to the movies more often in July. In a study of fifteen years of box-office data, Liran Einav, an economist at Stanford, concluded that, although demand does vary through the year, a hefty chunk of the difference between high- and low-season box-office receipts is the result of Hollywood’s clustering its big releases. Another problem is that releasing all the tentpole movies in the summer guarantees a crowded marketplace, which cannibalizes the industry’s sales. A 2010 study concluded that the “temporal agglomeration” of high-profile pictures diminished over-all performance.

The studios recognize these perils: two years ago, Philippe Dauman, the C.E.O. of Viacom, said that clustering was hurting industry profits. But the habits are hard to break. The uncertainty of the business means that studios often imitate one another, in order both to gain from competitors’ insights and to insulate themselves from criticism. For individual executives, sticking with the status quo feels safe. “If you open a blockbuster on Memorial Day and it fails, no one is going to blame you for your release strategy,” Einav said. “If you open a potential blockbuster in February and it fails you’re going to be on the hook.”

Yet there has been change. The pioneer was Universal Pictures, and, in particular, Nikki Rocco, who recently retired as its distribution chief. Starting in the nineties, Rocco embraced what Fithian called the “twelve-month ideology.” Rocco’s release strategy was driven by two seemingly simple but, in Hollywood, quite radical insights: people will go to the movies at any time of the year, and movies that might get buried in a crowded market could become big hits in an emptier one. She expanded the definition of what counted as a summer film by pushing release dates earlier, opening “The Mummy” in the first week of May, and then moving the release of the fourth movie in the “Fast and the Furious” franchise all the way back to early April. With movies like “The Bourne Ultimatum,” she showed that August, once considered a dead zone, could be lucrative territory, and she turned the classic dump months of January through March into fertile soil for smaller films with hit potential, such as “Ride Along,” “Identity Thief,” and “Safe House.”

Universal is one of Hollywood’s smaller studios, and its adoption of a year-round release strategy is analogous to the way Billy Beane, the general manager of the Oakland A’s, pioneered the use of data analytics in baseball; he did it in part because his small budget meant that he had to uncover value in places where no one else was looking. Just as the success of Beane’s approach led bigger-money teams to follow suit, other Hollywood studios have begun to experiment with unconventional release dates. Disney’s “Alice in Wonderland” made more than a billion dollars globally despite a March release date, and two of last year’s biggest hits, “Captain America: The Winter Soldier” and “Guardians of the Galaxy,” were released outside the tentpole season. Tradition dies hard—but, every time a film with an unlikely release date scores big, the old paradigm weakens. Pretty soon, studios may decide that if you release it they will come—as long as it’s actually good. ♦