The number one reason, in my opinion, is that VA had "teen movie" written all over it and that is typically box office poison. (Probably why they mentioned Mean Girls and Heathers in the promos since those are well-liked teen movies and they were hoping audiences wouldn't dismiss VA outright.) Both the source material and the movie had all the staples of a teen movie: the big dance, bitchy rivals, rumors, and hot guys.
People want to see teen movies at the box office even less than they do vampires, but when you put the two together, I believe it totally drove away audiences.
The movie was also poorly made, so bad word of mouth didn't help either. It could have been a sleeper hit if it was a better movie, but it really wasn't. (My opinion of course that it was a bad movie, but that 10% score on RT is pretty low.)
I really don't know what could or should have been done differently. Personally, I question whether VA was a cinematic book to begin with. A lot of its appeal was Rose's narration (which couldn't be transferred to film) and a lot of the conflict in the book was internal to Rose (which also couldn't be transferred to film)...so what are you left with? The plot wasn't particularly strong in the first VA book and the setting wasn't that interesting (most of it took place at the school). These things didn't matter in the book, but film is a visual media and they do matter in a movie. The director could have spent more money on the set to give it more visual appeal, but we still would have been stuck inside a high school for most of the movie, which gets boring after a while.
To overcome the setting, the movie really needed better dialogue, like a stage play. I've seen great plays that had no costumes or set whatsoever, but the acting and dialogue held your attention from beginning to end. Again, this is a matter of opinion, but VA lacked both.
The other issue is, I think they needed to get away from the source material a little more. The fans were happy because it hit all the major plot points from the books, but that resulted in a rushed, choppy story. The producers needed to streamline the whole thing and make a tighter, standalone story instead of worrying so much about dropping hints for movies that might never get made. That stuff ate up precious film time and left audiences who were unfamiliar with the source material confused.
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