Seven years ago, Peter Benchley accepted a $7,500 contract to write a story about a shark.
The book went on to become a myth, a movie and a record money-maker. Tonight, it becomes what television calls "an event."
"Jaws" is the opening salvo in a ratings war expected to cost the networks $60 million for prime-time programming this month alone -- all for the quarterly Nielsen "sweeps," which between Nov. 1 and 28 will provide ratings that determine local station rankings, and thus advertising rates.
ABC reportedly paid $25 million for broadcast rights to "Jaws" I and II. And even with 30-second commercial spots selling for a whopping $200,000, "Jaws" will be a "loss leader," says ABC vice president Lew Erlicht. "On many big films you don't show a profit." As CBS Entertainment president Bob Daly puts it, "Every network likes to have something good for their image."
"'Jaws' is so strong you can't program against it," Erlicht boasts. CBS is sticking with its normal Sunday night comedy line-up; and NBC will go with the second part of Gregory Peck in "MacArthur."
ABC will probably swim away with tonight's ratings -- but the other networks will compete with big Hollywood hits throughout November. CBS has "Silver Streak" and "Oh, God." NBC will broadcast "Dog Day Afternoon," "A Bridge Too Far" and "heroes." ABC, after "Jaws," will present only made-for-tv movies.
CBS' Daly points out that while made-for-TV movies do better in overall ratings than do theatrical features, "the important, big theatrical films" are crucial. Consequently, D-Day secrecy surrounds each studio network deal. That is understandable: The "Jaws" phenomenon is part of a 20-year-old pattern that involves hundreds of millions of dollars and affects not only what the public sees in the living room, but in the theater as well.
The first feature film shown on prime-time TV -- "How to Marry a Millionaire" starring Marilyn Monroe -- appeared in 1961. Since then, both theatrical and made-for-TV films have occupied between one-tenth and one-quarter of prime time. They are currently on the upswing (last season averaging 10 of 66 weekly hours), and the networks are paying more than ever: "Gone With the Wind," $35 million; "Sound of Music," $21 million; "Godfather" I and II, $15 million; "Close Encounters," $18.5 million; and "The Sting," $16.5 million. (Some prices include multiple showings.)
The average price is $2.5 million- $15 million, twice what it was two years ago. And apparently it's worth it: For both the networks and studios, there are almost never losers in feature film deals.
"One hour of prime-time programming costs $500,000-$700,000 to produce," explains Merrill Lynch analyst Harold L. Vogel. "The networks are spending $1 billion per season for prime time. Seen from this perspective, what they're spending for 'Jaws' isn't that much."
Programming mistakes are expensive, and the current failure rate for new shows is about 80 percent. "This prompts [networks] to turn to movies," says Walter Staab, president of SFM Media Corporation, a time-buying company for advertisers and advertising agencies. "You look at the track records for good movies, and they're sure winners. The networks get a predictable product that helps the ratings, particularly during the sweeps."
The studios, in turn, rely heavily ontelevision. MCA, for example, makes more money annually from televison (including non-network syndication and deals involving regular network programs) than it does from theater-goers. Other studios reportedly have grossed as much as $75 million at a time from sales to television.
Networks buy feature films in one of three ways: before the studio begins filming or before the completed movie is released (both called pre-selling); or after they have appeared in theaters. The Motion Picture Association estimates average production costs of a feature film to be $7,507,600 -- up nearly 150 percent since 1975. With prices this high, television offers a welcome market.
"Sometimes over 100 percent of the production costs are regained by a television sale," says Paramount chairman Barry Diller, who declines to give specific examples.
Former Columbia vice president Bob Cort says that "if somebody wiped out television sales tomorrow, it would destroy a piece of the [movie] industry's economic balance. For a long, long time it's kept a lot of marginal things profitable."
The deals are made rapidly: "It's usually a matter of hours, days or weeks," says MCA vice president Tom Wertheimer. One reason multimillion-dollar bargaining moves so quickly is that networks rarely bid against each other.
CBS' Bob Daly says he can remember only one movie auction -- for "The Poseidon Adventure." CBS dropped out because, Daly says, "it wasn't worth it to us," to be part of the auction process.
"If we're dealing with you on a picture, it's not right of me to be talking to someone else," explains United Artists vice president Bart Farber.
Top studio executives, many of whom once worked for networks, know all about ratings, sweeps and 30-second commercials that sell for hundreds of thousands of dollars. "It can be as simple a saying, 'We have a film. We want this amount. Will you pay it?' " says Paramount's Diller. "The money is there because the networks are starved."
"The prices are insane," says Avra Fliegelman, editor of TV Feature Film Source Book, which estimates audience potential for movies on television. "The movies know the networks are making a fortune. I don't know where it's going to end."
The general rules are simple. "Musicals -- it's heartbreaking -- are no good," Fliegelman says. "Action, adventure, yes. The movies that do well are always the exploitable. They will always get the male in the family. The kids will look at it more than once, even if they saw it in the theater."
Adds time-buyer Staab, "Disaster movies have done fabulously well, which is why they get high prices. Anything connected with violence and destruction will do well."
The lack of bidding is only one sign that movies and television are becoming cooperative, rather than competitive, art forms. The most dramatic is the growth of pre-selling. Studios pre-sell because it guarantees a return on what is always a risky venture; networks pre-buy because the price will be higher should a movie become a hit. "Most companies generally use it," says Paramount's Diller. "With the cost of films rising, it's an investment protection."
But without box-office sales figures to help guage popularity, pre-selling is "really a roll of the dice. You pray a lot," says Harold Brown of American International. "Only the good Lord himself knows what's going to happen."
Says Columbia's Cort, "The basic philosophy is, if you have a film that you think isn't going to increase in value after it opens in the theaters, you're better off pre-selling to television."
The classic network coup is "The Amityville Horror," pre-bought by CBS for only $1.8 million. As a box-office hit, it could now command $7 million- $8 million.
Studios got their revenge with "Butch and Sundance: The Early Years," which pre-sold for $6.5 million and promptly bombed at the box office. Ironically, television may have contributed to this failure: "Our research showed people didn't come because with the title and the absence of big-name stars, they thought it would be the quality of a movie-of-the-week they just as easily could see at home," says former 20th Century-Fox head Alan Ladd Jr.
All pre-selling deals are secret: Studios say the networks insist upon it and the networks argue that the studios want it. "We're not hiding some systery in a closet," explains Paramount's Diller. "It's just that if we stated what we received, it could be used by the people we compete with. The networks face the same situation."
Peter Guber, producer of "The Deep" and "Midnight Express," is more explicit: "There are only three buyers in the [network] marketplace. Studio executives don't want to embarrass themselves and thus help their competitors. They don't want comparisons. And a lot of group-selling happens so it's impossible to pin down precise prices."
Group-selling -- in which one company sells several movies to a network for a fixed package price -- enables studios to unload their bombs. (Many people feel it is technically a violation of a Sherman Antitrust Act prohibition against "tying" the sale of one product to another.) Packages are announced as groupings of separate deals, and can never be confirmed. The networks go along. "Some movies we eventually write off and never show at all," says one network official.
Explaining the secrecy, a studio executive comments that, "People are afraid of being seen as fools. They're afraid of having their judgment out for the public to see. In this business you're dealing with people who are tremendously insecure. Their heads are on the block all the time."
Despite the secrecy, among those films with confirmed pre-sells are "Star Trek," "Rocky II," "The Muppet Movie," "The In-Laws," "Goldengirl" and "Magic."
Even without pre-selling -- in which networks sometimes have script and cast approval -- television has moved right into the core of Hollywood's creative processes. "Television increasingly calls the tunes," says Steven K. Scheuer, author of "Movies on TV." "The television mentality is to some degree already shaping what's being shot."
United Artists recently paid a record $2.5 million for rights to Gay Talese's still-unpublished study of sex in America, "Thy Neighbor's Wife." "If it's tastefully, done," says Hy Smith of UA, "a television sale could be astronomical. Let's face it: Everyone talks about sex."
Television's influence is becoming increasingly overt. Most studios now customarily "loop language" (that is, provide two different sound tracks for potentially offensive dialogue) and shoot two versions of certain scenes just to have the film "ready" for television.
The classic example is "Saturday Night Fever," which appeared in theaters with an "R" rating, but with a milder version already filmed for television. Gone were the disco stripteasers, the backseat sex and much of the rough language. When Paramount released the television version to theaters, it came equipped with a "PG" rating.
Furthermore, outfootage -- edited from the original -- is often resurrected for television, lengthening the movie and raising what the networks will pay.
"Jaws" co-producer Richard D. Zanuck says, "We did put in a couple of minutes, not for artistic reasons, but to fill air time." He adds, "The picture has in no way been toned down, because it started out with a relatively mild PG rating." But he says "Jaws" was "double-filmed" and that more shocking footage exists, never seen by the public.
"MacArthur," to be broadcast opposite "Jaws," also includes outfootage, as do the television versions of "The Last Picture Show," "The Godfather," "King Kong," "Earthquake," "Airport '77" and "Airport '79." The most famous outfootage today is the 24 hours snipped from "Apocalypse Now." Although $10 million reportedly already has been offered for one broadcast with or without outfootage, co-producer Tom Sternberg insists, "We have no plans to sell to television."
Perhaps the most radical plastic surgery was performed in 1978, when Universal spent over $500,000 to change "Two Minute Warning" after its box-office bust. "It became a significantly different film," says "Movies on TV" author Scheuer. "It has a different plot line. They used new actors and didn't identify it as a different movie. The whole damn system is irrational."
Television's dominance is rational, however, because broadcasting remains one of the most stable, profitable businesses know to man. Total network revenues were $2.96 billion last year, up 14.8 percent in just 12 months. It is not surprising, therefore, that ABC and CBS each recently formed its own movie company, a venture that failed in the late 1980's.
"We're getting tired of paying the high prices," says one network executive.
But the reasons go deeper than that. Movies like "Jaws" are more than weapons in the current ratings battle. They are the stakes that cable television hopes to drive through the network's hearts.
During last February's sweeps, Nielsen ran its first cable ratings and discovered that for one-half hour, cable's "Looking for Mr. Goodbar" outdrew all three networks.
"We were all staggered to see how cable just destroys the networks when a good first-run movie is shown," says time-buyer Staab.
New battle lines are being drawn. Warner Cable, for example, has initiated a nationwide "Star Channel," which beginning in January will present 24 hours a day of uninterrupted feature films. "We don't do things like that simply on a gut feeling," says Star Channel's Al Parinello. "The networks must understand that the writing's on the wall."
As the cable market grows, network-owned studios will be able to either withhold hit movies or sell to cable and then "rest" the feature before network broadcast.
So the future for films on television is exciting, but uncertain. One thing, however, is clear: Almost everybody is going to make money.