The Death of the Entertainment Industry (or at least Movies)

That's very possible. Pardon my ignorance, but what's the AMR, and is there a place online to look at their numbers? I've never been able to find a centralized place for all those figures (just each individual chunk in a different place) before, and so I'm curious to see what the whole picture looks like.

 

This is back to my earlier post but look at your dates here dude, what new market was opened for studios roughly around 1982 that provided new revenue streams allowing studios to pump more money into the cost of production and then also allow for initial tax write-offs knowing your product will always bring in long term returns.

It is naive for people to call Studios stupid, their business is making money. They have been doing it for a very long time and they are very good at it. The major problem Studios face is that of the removal of entry barriers. As I posted earlier studios heavily rely on their library to absorb the short-term loses that a film endures before it ultimately becomes profitable and joins the library for the cycle to continue.

Any new competitor will need to absorb huge losses in the short term before becoming profitable at earliest 5yrs but more likely around 10 yrs after inception. There isn't a publically traded company on the planet that could justify such risks and initial losses to their shareholders. The only possible entry could come from Sovereign Wealth funds with very deep pockets and even then why would you enter as a start-up when you can simply buy an existing Studio.

So as a very result of their business model ever since revenue streams became generated by more than box office Studios have affectively been a protected species. New Media and all that it entails and now threatening them and the real debate should exist around how this will play out.

 

Adams Media Research. It is like any Market Data, if it is online and free it will be limited in scope.

 

The first stat is almost certainly incorrect. Perhaps only 5% of albums sell 5000 copies, but the albums that sell only 50 copies there could be 10,000 or 100,000 of. That's an awfully big ding in the market.
I can't recall the exact figures from The Long Tail, but the smaller, non-blockbuster songs are now accounting for closer to 30% of the market than 5%. Same goes with books. Sure, lots of books sell not even a dozen copies, and the big-name books vastly outsell the small guys, but 30% of Barnes and Nobles sales are of books that sell too few copies to even be carried in the stores (either they are special ordered, or simply purchased online). The giant B&Ns in NYC don't even carry PhilaLawyer's Happy Hour is for Amateurs.

 

This may sound naive but if the Studio's put out less films wouldn't they be apt to make more money? It seems every year one of the studio's has a blockbuster up their sleeve, (Harry Potter, Shrek 3, Toy Story 3) so they know they will have a potential 200 million dollar film why would they take a risk on a big budget stinker like "Knight and Day?" (although KImaster famously tells me movies like that still bring in money)

I just don't understand why they just pump them out non-stop rather then trying to make a few good movies. Is it that unknown?

 

Good question! I've wondered the same thing myself; "If the market is so saturated with films, why not reduce the number of released movies? Reduce supply to better fit the demand." Here is my own reasoning, and toddus correct me if I'm wrong;

Just like people continue to make music and write books even if there is a lot less money in it, so too will people continue to make movies, even if they can't convince a major studio to give them tens of millions of dollars for it. If the studios decided to greatly reduce the number of films they produce and/or distribute, then that will simply mean that smaller, mode independent films would take their place.

In the absence of competition, they will do well for themselves, carve up more of the market, and maybe even convince a few people to watch more grown-up films. And while the $35 million that "Knight and Day" has made so far is an utter disaster, even half that figure would be a sizable profit for an indie.

I think this used to be less of a problem because major releases used to be much better than independent fare, in terms of look, sound, as well as story and character. Now, the only advantage they have is the visuals, and even that not by much. That, and there were fewer enterprising filmmakers dying to make something.

 

I think the major studios keep putting out so many movies is because they are directly competing with each other.

In other words, if Warner Brothers can't afford to make and market Harry Potter AND a half dozen other movies next summer, then they will lose ground (and money) to the studios that can and will. So, they realize they might not be able to make a better movie for the date night crowd (because you're going to watch SOMETHING) than SATC2, but they will release and market something very similar, even if it is a losing proposition, so the other studios don't make $130 million off of something like that by sheer lack of competition. By not making certain films, the studios would be leaving money on the table and hindering their ability to take risks or produce big budget films in the future. If they can expect a reasonable return on DVD, television and merchandising sales, or making up their losses on other releases, then the studios are looking at a strategic must by making these films.

It's not that there are too many movies, it's that there are too many SIMILAR movies, or more accurately: too many movies are marketed as "Date Movie", "kid's animated movie", "adaptation", etc that are indistinguishable. If you saw the Losers, there's no need to see the A-Team. If you watch Toy Story 3, why would you see Shrek 4?

But from the production side, you can't let one studio enter a market segment completely unchallenged. Some of these movies are simply made as spoilers, to keep one studio from gaining too much market share.

 

The problem with Hollywood is it’s bought into its own bullshit, and the real world doesn't compare. It’s why none of the script writers can build a believable script, they’ve spent their whole life suckling at the poisoned teat and they are what they eat. Instead of strong plot’s and well built scripts you get clichés , CGI and BIG STARS. The fuckers can’t even rip off better made movies from elsewhere without their creative void removing the original materials soul. Hollywood makes nothing but hollow, plastic bullshit and I can’t remember the last big budget movie I would bother pause for a toilet break, because lets face it, your not going to lose the plot.

Although I have to admit I got a kick out of Avatar, it was pretty, and the 3d alone made it worth the price of admission. Also I liked Fern Gully, Dances With Wolfs and Pocahontas so the blending didn’t bother me.

There are some excellent movies made outside Hollywood for less than the cost of a single "star" salary, with no CGI, whoda thunk it possible?

 

I don't know man, despite the difference from the original I quite thoroughly enjoyed Charlie and the Chocolate Factory.

I never really watch new movies anymore but, how often do you guys really see this shit happening?

 

This could be naivete speaking, but doesn't the decline of Big Film permit the evolution of the art form? Without sounding like a parrot of other voices on the subject, a filmmaker who is forced to be creative with a limited budget is logically going to put that much more effort into producing a quality film. He can't afford superfluous scenes or script rewrites or bad acting masked by special effects. It requires a confidence in the material and the ability to do as much as possible with very little. That attitude is sorely lacking in Hollywood filmmaking and it results in the kind of circular crapfest we've witnessed since the dawn of advanced CGI. They presume that the audience prefers objectively sub-par movies that trick their brains with bright lights and shiny objects, and since that's all they produce, that's all the audience has come to expect. And so it goes.

I think (read: hope) that the removal of substantial profit incentive draws out true lovers of film, the people who actually want to make movies instead of just make money from movies. As biased as a lot of what Max used to tell us probably was, I absolutely believe his portrayal of Hollywood as a town packed with parasites and opportunists who see the chance to make a buck off the artistic vision of more talented individuals. If those same parasites realize that the paycheck is no longer worth the effort, perhaps they'll move on to something else once the well runs dry.

I disagree. Why not make more movies, but spend less? The industry just needs to lower its expectations in terms of profit. No more 150 million dollar films, no more 300 million dollar box office returns. Abandon that reliance on massive, costly projects and invest in smaller ones that show potential. Throw $100,000 and three HD cameras each at 25 different filmmakers and see what they come up with. Like Project Greenlight, but without all the reality-show hype surrounding it. Release them in major cities, and let the quality of the films decide if they warrant wider release. If they all bust, you just spent less than you would on the salary of a single A-list actor for some Uwe Boll shitshow. 'Clerks' was made for $27,000 in 1994, roughly $40,000 after adjusting for inflation. It was a simple, raw piece of work that did something different with minimal resources, and is now considered a formative film of the 1990s. It is absolute proof that you do not need robots and spaceships to appeal to the general public.

The invention of cheaper, high-quality cameras, audio equipment and editing software means that the technical requirements are within reach of anyone with modest savings (See: Paranormal Activity, Budget: $15,000, $200,000,000 box office) If you have the will and the ability, you can make a solid movie. The ultimate goal, though, cannot and should not be to eventually become Michael Bay or George Lucas, who are essentially the scientists who created Jurassic Park. They were so preoccupied with whether or not they could, they didn't stop to think if they should. As long as that is the prevailing mentality, this problem will continue.

 

How timely, check this out. The article claims that Harry Potter movie actually lost money even though it grossed almost a billion dollars at the box office. I get that studios take all the risk but this just seems like a lot of bullshit.*


*I don't really know shit about movie financing or economy.

 

Nettdata is absolutely correct; that's just Hollywood "creative financing" bullshit. It was similar to when Peter Jackson sued the studios who claimed they had lost money from "Lord of the Rings" to keep from paying him a percentage of the profits. The article even mentions this. The Harry Potter series was/is a huge money-maker, which is why they continue to make the damn things.

You have a lot of faith in the "general public", but box office receipts tell a different story.

Namely, they show that these cheaper, plot-driven movies (of which there are still a decent trickle of to this day) are largely ignored by audiences and lose a significant amount of money, while the "robots and spaceships/remake 3D extravaganza" are the only thing standing between Hollywood and complete financial ruin. The only films that can make them money with any consistency.

You bemoan the lack of quality, cheaper films, yet ignore that they are all around you. For instance, did you watch "Moon" last year, one of the greatest sci-fi movies ever? (Made for a mere $5 million) Or did you go see the shitty "Star Trek" and "Transformers 2", instead?

I've seen this over and over again in this topic; people complaining about Hollywood movies, while ignoring all the modern masterpieces that have come out in the last few years. Did they watch them? Any of them? Or did they watch the big, overpriced mess they claim to be so against? From the standpoint of the studios, THEY are the consumers who love the big budget 3D-fest over the smaller, more mature film.

And no, some of these movies won't have trailers for them playing on every freaking channel 24/7. They might even require going online and doing a bit of searchinig and reading about the plot, director, and few reviews.

But they exist, even if you keep pretending they're dead. But after all, it's always easier to blame the "big evil corporation" than look at your own consumption habits.

 

In the first place, by "you", I assume you mean the general public, because I saw both 'Moon' and 'Star Trek' in theaters. I thought both were very entertaining in their own ways. Michael Bay doesn't get any of my money and hasn't for a long time, so there goes that baseless assumption. This whole 'box office speaks for itself' argument is just an extension of the We're Getting Dumber slogan, and I'm not stepping into that ring.

Secondly, I don't know anyone who bemoans big-budget Hollywood films and ignores smaller scale productions. On the contrary, the people I know who dislike those '3D-Fests' make a point of supporting independent films during their theatrical releases. That's what fans do. Also, I believe 'Moon' grossed $9,000,000 worldwide without ever getting a wide release in the U.S., so I don't know where you're getting the idea that these films automatically 'lose a significant amount of money'.

Thirdly, I never stated that those smaller, more mature films were dead. I said that the primary focus is still on producing the biggest film with the biggest potential payoff. As all of your numbers pointed out, an investment of that size can no longer guarantee profit and now represents a sizable risk to studios. As I pointed out, a potentially profitable film does not require a 9-figure budget. Studios can afford to place numerous smaller bets on lower-budget movies that may or may not pay off, while still producing (fewer) big movies in order to make rent. They really only have to be right a fraction of the time for it to be worth it, and film as a medium would generally benefit.

 

Maybe baseless for you, but many of my friends cry and bitch about how awful Transformers/Twilight/modern movies are.

"So wait...you bought tickets to see them?"

"Yeah, and so did a couple of my friends."

"And you don't watch anything else?"

"Not really, no."

"So...why are you complaining about, again? Don't your actions reinforce what you claim to be so against?"

Really? How so? I wrote absolutely nothing about people getting dumber.

I'm stating a simple fact; these smaller-budget movies do very poorly commercially. Worse than the big budget CGI extravaganzas. This is the biggest, most obvious problem to your proposed solution.

That's terrific. (honestly) Among my friends (most of them very smart people, some more intelligent than myself), the vast majority will only watch big budget blockbusters and ignore anything foreign/story-driven/small-budget.

Yes, "Moon" lost money in its theatrical release. The product budget alone was about $5 million. Even considering a very paltry P&A budget ($1.5 million), with about 45% of its gross revenue going to the theaters (actually, even more considering its run, but we'll ignore that), that's almost $2 million in the hole.

Now, I'm sure they can probably recoup that over a few years of DVD sales, and maybe eke out a small profit by signing a television deal, but that was one of the more successful indie films last year, and it still didn't do particularly well.

Your proposal is hardly new. It has been attempted (and mostly failed at) by a number of major studios over many decades, from Cannon in the 80s to Miramax in the 90s to Sony Picture Classics in the 2000s.

Cannon went bankrupt, Miramax/Weinstein is going to be bankrupt in a few years, and SPC is barely breaking even.

It has also been tried by a number of minor producers who end up bankrupt left and right. Fact of the matter is, 10 small films that do mediocre sink a company just as easily as one major flop, except the former comes with more risk, AND less chance of a major hit. Trying to go for singles and doubles instead of home runs, paradoxically enough, has proven to be the wrong strategy time and again in financing movies.

And I think it's worse than ever today. Back in the 80s, when the movie theater business was doing better (less saturation, less competition from other forms of entertainment), convincing someone to watch the weird film at the local theater was a hell of a lot easier than it is now.

 

I'm aware the proposal is nothing new. Clearly, though, Paramount seems to think the concept has merit.

Back in the 80s, they did not have the Internet at their disposal. They were not able to poll moviegoers in areas where the film had not been released and encourage them to sign an e-petition if they wanted the movie playing in their area, ala Paranormal Activity. They don't have to convince anyone, anymore. They just have to put the film out there, gauge the initial response and act accordingly.

Also, your examples are kind of flawed. Cannon exclusively produced low-budget films. They failed to diversify, bet the farm on B-movies, and folded. Miramax was a financial success until the late 90s and was still putting out moneymaking films throughout the last decade. Their money problems are relatively recent and probably have more to do with mismanagement than the declining appeal of independent film or its commercial viability.

As for Sony Picture Classics, I'd like to see the numbers that show them just breaking even. There are a half dozen films or more on its production list that have garnered Academy Awards or nominations and several more have been legitimate commercial successes. At the very least, it has built a reputation as a company that regularly produces critically lauded films. Also, SPC produces movies with budgets in the low millions, not the low hundreds of thousands, as Paramount plans to do with InSurge, so I don't know how much of a parallel can be drawn.

I agree that this is not a viable venture for minor producers, but I'm not suggesting that they be the ones to try it. Paramount is seemingly able to afford the worst-case scenario, or else they wouldn't be attempting it. They certainly wouldn't try it if it had the potential to sink the whole damn ship.

 

I probably fall handily into that category of people who go to theaters primarily for big budget blockbusters. The reason is fairly simple and has zero to do with my views of the movie industry and everything to do with per dollar value I get by going to a theater.

This past Saturday my new TV was delivered. It's awesome, a large LED High Def Samsung. I love it. The jump to HD has been great and the screen size is huge compared to my previous, ~5 years old, TV. What it also means is that the bar for getting me into a theater has gone up even more. Because the only thing a theater really has that I would want to pay for is an even bigger screen and immersive sound and my TV just got bigger, my sound just got better, and my picture is now crisper than a theater screen to my eye. And the only real user of those features in a theater, sufficient to draw me in, is special effects. Character driven dramas? There is nothing about the theater experience that makes a lower budget drama more watchable there vs. at home. Give me big explosions and huge lasers and crazy robots if you want me in the theater, otherwise it's not worth seeing a film there. I'll wait and see it at home.

It's even worse, though. If I don't think I'll *like* the big budget movie, well I won't see it in theaters either (unless my wife wants to, or whatever) and will wait to see it, or not see it. But I loved Star Trek and saw it three times in the theater. I heard shitty things about the Transformers sequel, so I didn't see it until last night when I got it via Netflix (and it was really bad).

And absolutely none of this reflects on whether or not I prefer special effects laden movies over smaller movies in a vaccum. It just means that I won't bother paying to see movies without special effects in a theater because the theater experience itself is not worth my money without those effects.

 

I fall in this category too, currently a Samsung LED at that, but I've been in the HD world since 2006 with my now horribly outdated 720p LG LCD TV. The only movie I've gone to theaters for in the last 3-4 years is Avatar and only because of the 3-D experience, I didn't think it was necessarily going to be a good movie, but I knew that the only way to properly watch it was in theaters. Mind you I love movies and when theaters were the best option I went 2-3 times a month (student discount FTW) to the local theater.

I love indie films, but there's no reason for me to drag myself to the theater, sit in less comfortable seats, have no control over pause/rewind and pay ridiculous snack prices when I can wait a couple months to watch it for free from Netflix on a better screen.

Edit: Basically people like myself and Silway who actively consume movies are no longer contributing to their box office gross. Now I know people like us are not the make and break for movies, but we artificially deflate the perceived popularity of movies by not going to see them in theaters and not buying them on DVD/Blue Ray.

Ultimately I agree with KI that the multitude of other entertainment options is destroying the industry, why go out of the way to watch a movie when you can watch hilarious Youtube videos and play fun flash games on your computer/I-Pad/phone etc? There's only so many hours in the week and by consuming one form of entertainment you're limiting the amount time you can spend consuming another.