Hollywood Is Flush With Movies

When Meg Ryan and Antonio Banderas signed up to star in an independently produced comedy-action movie called My Mom's New Boyfriend, the film's backers figured they had a slam dunk-a modestly priced film with bankable stars that would surge at the box office. The producers say the $17 million movie scored well in test screenings in the U.S. this spring and did decent business in Spain, Israel and Russia.

But the U.S. distributor, Sony Corp.'s Sony Pictures, quietly sent the movie straight to DVD on June 17. “I believe that three years ago this movie absolutely would have been on screens, if for no other reason than the actors involved.” says George Gallo, who wrote and directed the film.

These days, scores of films such as “Boyfriend” are finding there's no room at the multiplex. The reason: Hollywood is flush with roughly $13 billion to $18 billion in financing for movies that poured in over the past few years, according to bankers and producers, vastly expanding the number of pictures getting made.

The flood of money is paying for films made by both relative newcomers and veteran film investors and producers. Another factor in the pullback is a rise in marketing costs. A decade ago, campaigns for independent movies were driven by free publicity and word of mouth.

The crowded market is prompting distributors to spend big to distinguish themselves. According to the MPAA, the amount of money the indie labels at the major studios were spending on marketing shot up 44% to $25.7 million in 2007 from $17.8 million in 2006. Since 2002, that marketing spending has doubled, driving up competition for all films trying to gain traction in the marketplace.

Yet it is increasingly common to see critical darlings of the festival circuit get trampled. Son of Rambow, a coming-of-age comedy about two boys in England who dream of filmmaking, was a darling at Sundance in 2007, where it was reportedly sold for distribution for about $7.5 million-one of the largest buys at the festival that year.

Vantage released the film in May 2008 to top-notch reviews. But it flopped, grossing just $1.78 million. The film was put out via a platform release on the same day that Paramount's Iron Man hit theaters in early May. While Rambow added screens through May, it never gained traction in a month that was chock-full of blockbusters, from Indiana Jones and the Kingdom of the Crystal Skull to Sex and the City.

“Son of Rambow is the poster child for a movie that would have worked five years ago but fails in today's marketplace.” says Mark Gill, a veteran film executive who isn't affiliated with the movie. “It got great reviews, audiences really liked it, it was well-marketed. It had everything going for it, and yet it didn't work, because there is such a glut of movies and a mass of clutter right now that nothing can break out in this climate.”