by Dick Rolfe, CEO

As I write this article, I’m reminded of the saying, “Its Déjà vu all over again.”

I have commented ad nauseam on the fact that Hollywood is not simply in the profit-making business; they are also in the “creative license” business. However, the following stories will give you hope.

The entertainment industry seems intent on finding a way to justify their R-rated fare. They have used all manner of arguments to defend the making of these highly restrictive films which underperform compared with all other film ratings. They used to claim that movies do not influence social behavior. It would be like telling the advertiser of a 30 second commercial they can change the buying habits of the public, but the 90 minute film surrounding those commercials had no impact on viewers at all. So now entertainment execs are turning to a new tactic.

A long range strategy for justifying the value of R-rated movies was shared by National Association of Theater Owners (NATO) Vice President Patrick Corcoran. He suggested that getting young people hooked on less restrictive movies (PG, PG-13) is a pathway to selling them on R-rated films when they grow up. He said, “Making movies for younger moviegoers allows you (Hollywood filmmakers) to sell them on R-rated movies down the road. Part of what we want to do is get them when they’re young, when they go to movies with their families,” he says. “Once you build that love of going to the movies, the desire to keep going stays with them as they get older.” (See USA TODAY article for reference.)

Recently, a refreshingly candid story in Allied Faith & Family Entertainment Report supported our position that R-rated movies are mostly financial failures. Here’s the entire article. (reprinted with permission)

Hollywood in the hole; R-rated films to blame?

Speaking at the University of Southern California as part of festivities surrounding the official opening of a new Interactive Media Building, George Lucas and Steven Spielberg’s predicted an “implosion” in the film industry citing poor profits in the first part of 2013. Lucas lamented the high cost of marketing movies as a reason for the sag, but looking at the current state of affairs, could the problem be deeper than just that?

Hollywood made more R-rated films last year than any other, but as a genre, they produced the least amount of revenue. As detailed in a recent USA Today article, most R-rated films gross less revenue at the box office than competing G, PG or PG-13 films. While there are exceptions to the rules, most R-rated films fail to meet box office hopes.

Below are some numbers from a study done by the National Association of Theatre Owners (NATO) that gave the total gross revenues of films in 2012.

– In 2012, a total of 177 films in Hollywood received an R-rating. R-rated films grossed nearly $3 billion, averaging $16.8 million per film.

– Hollywood produced 119 movies with a PG-13 rating. PG-13 movies in 2012 averaged $47.3 million per film in 2012.

– Every other rating (aside from NC-17) brought in more dollars per movie than did R-rated films.

– The 49 PG films in 2012 generated $2.1 billion, or $43 million per film. Eight G-rated movies brought in $184 million, or $23 million per movie.

Observers say the industry’s reliance on R-rated films put the box office in a hole this year that it has yet to escape. Perhaps the movie-going public is voting with their ticket purchases as to what sorts of films they would rather see coming out of Hollywood. With more than half the country claiming some religious affiliation, the Faith & Family Market can hardly be considered a “niche” market.

Dove Foundation’s 2012 Film Profitability Study echoes the fact that family movies, (especially those approved by Dove) are many times more profitable – and therefore more popular – than films with explicit portrayals of sex, violence and language.

So, what’s a discerning person to do? Keep on believing that though you are different, you are not weird! According to a 2012 Gallop Poll, “Seventy-seven percent of American adults identify with the Christian religion.” That means people of faith make up the largest “niche” market in American society.

You are called to be who you are by a power bigger than Hollywood.