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Worldwide Box Office, The Best It’s Ever Been

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The international worldwide box office has never been this big or this competitive. 2018 proved to be a record year as Comscore reported that the worldwide box office peaked at $41.7 billion. This is already a 2.7% upward shift from last year’s $40.6 billion and marks only the second time ever that it has cracked $40 billion.

At a time when blockbuster films are all but devouring the lion’s share of traffic at the international turnstiles, we thought it appropriate to pause and take a look at just what these figures mean for the future of film and film releasing. Is Hollywood cannibalising itself by creating these juggernauts?

Well, let’s take a look at the latest numbers sensation, Avengers: Endgame. The film broke a few records. It had the biggest international opening of all time raking in just over $1.2 billion in its first 11 days of release, an unheard-of figure.

READ MORE | Will Cinema Just Disappear?

As of May 13, Avengers: Endgame is sitting on a worldwide total of $2.5 billion and is guaranteed to go even higher in the weeks ahead. But where does this leave variety, where does this leave the smaller film, the adult-orientated film, the arthouse film?

The reality is that the mere existence of films like Avengers: Endgame means that this leaves such kinds of pictures nowhere. It’s impossible for any other picture to compete with a $356 million budget superhero movie with at least another $200 million in worldwide marketing costs behind it.

Hollywood’s technique is complete saturation and to kill the competition. So while the film may have performed exceptionally, let’s be honest, with the kind of market saturation, brand name power and the sheer size of the international release, it should have.

Another important point when reviewing this film’s incredible box office performance is again to take into account the all-important Chinese market. Avengers: Endgame has already grossed over $600 million in China accounting for over a third of its total gross already.

READ MORE | How I marvelled at Black Panther’s reimagining of Africa

But how has it performed from a historical perspective? When looking at ticket prices adjusted for inflation based on grosses in the United States only, the film slips all the way down to number 24 on the all-time grossers list. Top of the pops is still Gone With The Wind from 1939, followed by the original Star Wars from 1977.

This brings me to my next point. Whatever happened to films that had legs, such as Steven Spielberg’s E.T. from 1982 or The Exorcist from 1973? The grosses of these films adjusted for inflation would be billions of dollars worldwide. The key to their ongoing longevity is that they had legs.

These were films that discovered their audience week by week and although they were smash hits, they often grew in terms of their numbers from one weekend to the next as word-of-mouth spread, increasing their turnover.

In this age of instant gratification and mass saturation, Avengers: Endgame is doing the opposite – it dived by 70% in its second week, numbers showing no signs of any real longevity.

So is Avengers: Endgame going to be the ultimate releasing strategy going forward? Does one push the film out into as many cinemas as possible, spend the equivalent of a small country’s GDP in terms of marketing power and try and pack in as many viewers into your first seven days with sell-out performances, then take the money and run?

Speculation is always circumspect so I’d like to pose another question. If film is a business, should the business strategy be hit and run?

Will any of these films have the kind of longevity from a film fan perspective or will they disappear into the chasm of disposable entertainment.

READ MORE | Marvel Money: How Six Avengers Made $340 Million Last Year

Again, only time will tell. Where to from here for Hollywood?

This kind of maximum impact output surely isn’t sustainable and is surely too risky. You can’t spend half a billion dollars on producing and marketing a film and then have any kind of risk in terms of the film not connecting with its broad-based audience.

All you need is two or three box office bombs and you’ll sink a studio.

The old cliché that you can’t put all your eggs in one basket exists for a reason. If entertainment tastes continue to split into niches, the theatrical movie-going experience will also continue to take a backseat to Video On Demand, and Hollywood may just be shooting itself in the foot with this glut of summer tent-pole pictures.

I sincerely hope this doesn’t mean the death of “word-of-mouth”. Bigger does not necessarily mean better.

– Robert Haynes is Executive Producer of entertainment at CNBC Africa and owner of film and TV production company, 42nd Street Films, in Johannesburg.

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Kim Kardashian West Is Worth $900 Million After Agreeing To Sell A Stake In Her Cosmetics Firm To Coty

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In what will be the second major Kardashian cashout in a year, Kim Kardashian West is selling a 20% stake in her cosmetics company KKW Beauty to beauty giant Coty COTY for $200 million. The deal—announced today—values KKW Beauty at $1 billion, making Kardashian West worth about $900 million, according to Forbes’estimates.

The acquisition, which is set to close in early 2021, will leave Kardashian West the majority owner of KKW Beauty, with an estimated 72% stake in the company, which is known for its color cosmetics like contouring creams and highlighters. Forbes estimates that her mother, Kris Jenner, owns 8% of the business. (Neither Kardashian West nor Kris Jenner have responded to a request for comment about their stakes.) According to Coty, she’ll remain responsible for creative efforts while Coty will focus on expanding product development outside the realm of color cosmetics.

Earlier this year, Kardashian West’s half-sister, Kylie Jenner, also inked a big deal with Coty, when she sold it 51% of her Kylie Cosmetics at a valuation of $1.2 billion. The deal left Jenner with a net worth of just under $900 million. Both Kylie Cosmetics and KKW Beauty are among a number of brands, including Anastasia Beverly Hills, Huda Beauty and Glossier, that have received sky-high valuations thanks to their social-media-friendly marketing. 

“Kim is a true modern-day global icon,” said Coty chairman and CEO Peter Harf in a statement. “This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”

The deal comes just days after Seed Beauty, which develops, manufactures and ships both KKW Beauty and Kylie Cosmetics, won a temporary injunction against KKW Beauty, hoping to prevent it from sharing trade secrets with Coty, which also owns brands like CoverGirl, Sally Hansen and Rimmel. On June 19, Seed filed a lawsuit against KKW Beauty seeking protection of its trade secrets ahead of an expected deal between Coty and KKW Beauty. The temporary order, granted on June 26, lasts until August 21 and forbids KKW Beauty from disclosing details related to the Seed-KKW relationship, including “the terms of those agreements, information about license use, marketing obligations, product launch and distribution, revenue sharing, intellectual property ownership, specifications, ingredients, formulas, plans and other information about Seed products.”

Coty has struggled in recent years, with Wall Street insisting it routinely overpays for acquisitions and has failed to keep up with contemporary beauty trends. The coronavirus pandemic has also hit the 116-year-old company hard. Since the beginning of the year, Coty’s stock price has fallen nearly 60%. The company, which had $8.6 billion in revenues in the year through June 2019, now sports a $3.3 billion market capitalization. By striking deals with companies like KKW Beauty and Kylie Cosmetics, Coty is hoping to refresh its image and appeal to younger consumers.

Kardashian West founded KKW Beauty in 2017, after successfully collaborating with Kylie Cosmetics on a set of lip kits. Like her half-sister, Kardashian West first launched online only, but later moved into Ulta stores in October 2019, helping her generate estimated revenues of $100 million last year. KKW Beauty is one of several business ventures for Kardashian West: She continues to appear on her family’s reality show, Keeping Up with the Kardashians, sells her own line of shapewear called Skims and promotes her mobile game, Kim Kardashian Hollywood. Her husband, Kanye West, recently announced a deal to sell a line of his Yeezy apparel in Gap stores.

“This is fun for me. Now I’m coming up with Kimojis and the app and all these other ideas,” Kardashian West told Forbesof her various business ventures in 2016. “I don’t see myself stopping.”

Madeline Berg, Forbes Staff, Hollywood & Entertainment

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Gap Stock Surges After Kanye West Signs Deal To Sell A New Yeezy Clothing Line With Struggling Retailer

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The Ye Effect may be the new Oprah Effect: This morning Kanye West’s fashion and shoe company Yeezy and clothing retailer Gap GPS announced a ten-year partnership for a Yeezy Gap clothing line. 

Yeezy Gap will hit stores next year with a line of “modern, elevated basics for men, women and kids at accessible price points,” according to a statement from both partners announcing the news. West will receive an undisclosed percentage of royalties and, potentially, an equity stake, dependent on sales achievements.

Shares of Gap, which has struggled over the past five years to keep up with fast fashion retailers, surged nearly 40% when markets opened Friday morning in response to the news, but then tapered off. As of shortly after 1:50 pm ET, the stock was trading at $12.50, up 22% from Thursday’s close. The deal is welcome news for the retailer, whose namesake brand has lost its iconic status, and, as of earlier this month, had cash flow of negative $1.1 billion compared to negative $136 million last year.

“Gap has been a challenge for us,” Gap CEO Sonia Syngal said on a conference call earlier this month, adding that “years of inconsistent execution have depleted brand health.” Other brands under the Gap umbrella include Banana Republic, Old Navy and Athleta.

Years ago, West, who worked at a Gap store in Chicago as a teenager, expressed interest in partnering with the brand, whose product is quite different from his pricey Yeezy high-fashion line that sells shoes for more than $1,000 a pair and $925 cardigans.

“I’d like to be the Steve Jobs of the Gap,” he said in a 2015 interview on the now defunct Style.com. “I’m not talking about a capsule. I’m talking about full Hedi Slimane creative control of the Gap.”

But last year the rapper and designer, who is known to often change course, told Forbesthat  “What makes celebrity products sell so well is scarcity. … So if they make it too broadly available, I think it crashes the business model.”

That said, the Yeezy clothing line wasn’t selling “so well.” While his deal with Adidas to sell Yeezy shoes makes up the bulk of his $1.3 billion fortuneForbes estimates that his stake of the partnership is worth $1.26 billion—the Yeezy fashion line has struggled. His high-fashion line, meanwhile, is nothing more than a rounding error when it comes to his net worth. 

Partnering with a celebrity has been good—at least initially—for the stock of other companies.  When Oprah Winfrey announced she was partnering with and investing in WW (then Weight Watchers) in 2015, its stock surged 92%. Earlier this month, shares of the beauty giant Coty COTY rose 7% when it announced that it was potentially pursuing a partnership with West’s wife, Kim Kardashian West.

 It’s too early to say whether West’s Yeezy line can  help turn Gap around for good, but it will be another chance for him to do what he loves.

“I am a product guy at my core,” West told Forbes last year. “To make products that make people feel an immense amount of joy and solve issues and problems in their life, that’s the problem-solving that I love to do.”

Madeline Berg, Forbes Staff, Hollywood & Entertainment

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The Def Jam Star And Trend-Setter In African Music: ‘I Come From A Place Where Dreaming Is Not A Thing’

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Nasty C, the award-winning South African rapper hailed ‘The Coolest Kid In Africa’, recently signed with Def Jam in the United States, through a joint venture with Universal Music Africa, which sees him joining the likes of Kanye West and Justin Bieber. The 23-year-old rapper, also one of FORBES AFRICA’s 30 Under 30 list-makers in 2018, tells us more.

Mainstream South African rapper, Nsikayesizwe David Junior Ngcobo, popularly known as Nasty C, recently made his US debut with the song, There They Go, a single launched just before the lockdown in South Africa in March. Shot in Durban, in the country’s sunny KwaZulu-Natal coast, it’s the first advance track of his forthcoming album Zulu Man with Some Power.

Known as the most-streamed South African artist on Apple Music for four years in a row, he is effecting the crossover to the global stage and helping change stereotypes about African music. The Universal Music Group also recently announced the launch of Def Jam Africa, which shows new interest in talent across the continent.

Says Nasty C, who has been rapping since he was nine years old, and shot to fame with songs like Juice Back and Bad Hair, to FORBES AFRICA: “I hope to change that whole stereotype and just show them that we have a lot of depth and different flavors, and there are a lot of things we can teach outsiders that they don’t really know about. Hopefully, by exposing more African artists and if I can open the gates and have hundreds of artists follow after me, I feel we can bridge that gap. They will see Africa in a different light.”

While on lockdown in Johannesburg, the rapper has been building his online presence.

“I have had to focus on the digital side of things, and also be able to go live on YouTube and connect with fans; give them a taste of music that’s still to come.”

Through technology, even if the pandemic pursues, he feels music will survive.

“Music is very unpredictable. With the whole TikTok thing, artists are able to go viral… And that’s been working out very successfully and help them earn a little bit of money. I don’t think artists are going to be struggling if this pandemic continues… But nothing can top the energy of being in an arena with fans.”

Ten years from now, the young rapper hopes to be seen as an artist for generations.

“I hope to be a legend, I don’t want it to be about how rich I am or how my music career is, as long as I have changed the way my people think…”

His new song album Zulu Man with Some Power, he says, is about taking more pride in his people and culture and showcasing it on the global stage.

He says he looks up to artists like Burna Boy and Wizkid “who are representing Africa and uplifting Africa in the world”.

“My idols are living testimony that there are powers in the universe that could allow you to go from zero to hero. That’s what I hope to teach my fans. I come from a place where dreaming is not a thing, where people’s ceilings are this low. They feel they are undeserving of the finer things in life. I am just here to tell them that they are wrong. They should go for their dreams no matter how crazy and outrageous they are!”

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