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JohnBarnes
JohnBarnes
1/15/2017 11:54:20 PM
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Re: Blazing an old trail
Dcawrey,

"Massive audiences" pretty much implies a Price's Law situation -- as Roger Price explained it (and he thought it was a joke), when the number and variety of outlets is low and the audience is massive (think pop music in the 1950s or 1970s, TV 1955-80, fast food during the Hamburger Wars, Broadway musicals 1990-2010, etc.) it costs more to lose a customer than you can gain by picking one up, so the goal becomes "Don't touch that dial!", i.e. you avoid anything that might excite the customers because anything that might excite them might also offend them. In a Price's Law situation the product just keeps getting more alike, the costs keep going up (because you can pass them on to the consumers since no one is trying to steal them), and the whole thing subsides into expensive sludge.

But anything that breaks the Price's Law situation -- FM radio, niche radio, cable TV, Subway, Hamilton -- tends to release a huge burst of innovation and creativity, and to create a vast new range of genres and materials. So I'm betting as we come to the end of the superhero blockbuster, we're probably entering a great burst of creativity (or rather of getting access to all that stuff the creators really wanted to make all  along!)

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JohnBarnes
JohnBarnes
1/15/2017 11:46:23 PM
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Platinum
Re: Blazing an old trail
Dmendyk,

Just as jarring but also possibly just as liberating. The current narrow beam of CGI-and-action driven blockbusters is mostly driven by the "subtitle market", i.e. the ability to make most of the money in places where they don't speak English. This means essentially recreating the silent movie -- stories that can be followed with minimum dialogue in a room where the audience makes a lot of noise and is there more for the spectacle than for the story. A dollar invested in those projects, because the overseas market is so large, has a really good chance of making a satisfactory return.

But the movies have also had long eras in which local, people-oriented stories were the high profit area, because intrinsically they cost less to make, and they do draw a higher-income crowd domestically. A movie has to make Diller's figure of $500 million because it cost $100-300 in production costs and salaries plus probably another $100 million in marketing, advertising, and distribution fees to reach the whole planet. (And much of that $500 million will be made in the recorded-for-home-viewing aftermarket).  But a movie that costs $1 million to make and $1 million to market, and makes $10 million -- which is quite achievable in, for example, the French domestic market -- is actually more profitable (in terms of higher ROI), and very possibly more reliably so.

If the big studios lose control of the market, many smaller theaters and chains can decide, as they used to, that a big movie is to expensive and too big a risk (especially since big movies tend to come with multiple week lock-ins).  At that point booking 10 weeks of STAR GUYS VERSUS MONSTERS becomes more of a gamble (if it bombs, it bombs bigger, and if it succeeds, you have many other competing screens to worry about) compared to committing to two weeks each, with option to renew/cancel, to LONELY COUPLE FIND EACH OTHER, INTREPID LAWYER WINS CASE, BITTERSWEET SUMMER ROMANCE, PARENT AND CHILD RECONCILE, and TWO OLD GUYS WANDER AROUND ENACTING DIRTY JOKES.

Hollywood has had 3 blockbuster eras: silents in the 20s, spectacle-color 1939-55 or so, and the present post Jaws&Star Wars era.  In between they had swarms of little movies that made very good money.

The coming revolution looks to me like the swarm of little movies swarming back.  This may just be wishful thinking -- I like those periods and movies better overall -- but it looks to me like the side I favor is about to win again, for a while.

 

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mpouraryan
mpouraryan
1/15/2017 4:43:47 PM
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Platinum
Re: Blazing an old trail
Happy #MLK2017 to all!!!  

It has been a very interesting discourse--to say the least.     They need to adapt to the new realities which they are seem not to--As I am writing this, I am listening to a live feed of Al Jazeera on my second screen because I would also argue that it is not just hollywood, but just the broad landscape.    

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faryl
faryl
1/10/2017 8:09:08 PM
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Platinum
Re: Blazing an old trail
I think that it's more than just movies not making money at the box office - the cost to make money at the box office means less of a margin when deciding which movies to green-light, which means the big studios are less willing to produce non-blockbusters. I think that can potentially give companies like Amazon & Netflix (or even HBO) an edge over the big studios - especially since they view content's value based on what's likely to draw subscribers vs. the success/popularity of the content itself.

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srufolo1
srufolo1
1/10/2017 2:06:35 PM
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Platinum
Streaming Stealing Hollywood's Mojo
"Ouch, very ouch" for Hollywood studios, but "Yeah, baby!" for movie buffs. It seems to have been going this direction for a long time. Finally, consumers are getting what they want when they want it!

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Adi
Adi
1/10/2017 6:45:25 AM
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Author
Re: Blazing an old trail
@afwriter - you raise a really good point. I also feel studios are losing their control over the video business but I think that's due to a few different reasons. Firstly, the advent of digital video 15 years ago meant that high-quality production was possible without using film, making it much cheaper to produce prime time quality TV shows and opening up the possibility of first-run production to cable networks and others. Then, it's the rise of reality TV which is much cheaper to produce than standard dramas -- you pretty much need a camera and a Kardashian, and you're done. This weakened the dependence on broadcast networks primarily, but also on movies, since there are other programming options available.

But I do think streaming services -- Netflix in particular, but also HBO and Amazon -- have inverted the video value chain. Studios are no longer on top, and that's a huge shift. 

Movie prices have also gone up, while ticket sales are flatlining or drifting downwards. Large screen TV sets and home theatre systems coupled with binge viewing are making theatres less attractive. And VR used intelligently could push this trend to another level. 

As a studio executive, you have to look at what happened to the record labels (as @dmendyk pointed out in his post below) and wonder, where do we go from here...??

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Adi
Adi
1/10/2017 6:34:36 AM
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Author
Re: Blazing an old trail
@dcawrey - Agreed, I wouldn't take everything Diller says as gospel truth...he's got his own history in this industry, and his own vision to promote.

The movie business has always been a high-risk, high-reward business. So the odds of creating a hit have always been low.

I think what is changing though is that the aftermarket is getting weaker even when you do get a hit. And the studios ability to negotiate is weakening, because there's so much more content being produced. Today, a license for Game of Thrones is more valuable than pretty much any movie...and GoT goes on for 7 seasons (or is it eight..?) while a movie is 90 minutes. So the value is greater, the relationship it builds with an audience is better and the merchandising and spinoff opportunities are better.

Netflix and HBO aslo seem to have a better hit-rate than pretty much anybody -- they keep producing shows people watch. That's also scary for a studio. 

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afwriter
afwriter
1/10/2017 12:14:19 AM
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Platinum
Re: Blazing an old trail
@dcawrey, there are 3 more Avatar movies coming :)

Seriously though, I think that this is just one piece of a bigger puzzle. Streaming is only one of the reasons that Hollywood is ailing.

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afwriter
afwriter
1/10/2017 12:14:18 AM
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Platinum
Re: Blazing an old trail
@dcawrey, there are 3 more Avatar movies coming :)

Seriously though, I think that this is just one piece of a bigger puzzle. Streaming is only one of the reasons that Hollywood is ailing.

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dcawrey
dcawrey
1/9/2017 6:05:59 PM
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Platinum
Re: Blazing an old trail
I'm surprised to hear that movies don't make money - haven't we all understood the take blockbusters bring in versus how much they cost to make?

At the same time, I won't disagree that perhaps the days of mainstream movies might be diminshing. After the superhero era, what's left for massive audiences?

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