First of all, we would like to thank you for taking the time to read the following editorial on the Hollywood business. Now, this isn't just another editorial. Rather, we believe it's the brutal truth about it. The hope is when you finish reading, you will completely change the way you see the business itself. Each day, not to entirely fault anyone, we the people are clashed with a wealth of information that simply consumes our minds to a point that we cannot understand and/or choose to neglect the information given to us. However, if we take the information in detail and under great consideration, we will be able to understand and come to be objective people. After all, what good is an argument if you cannot look at both sides? The way in which we hope you will change your understanding of the Hollywood business is by coming to know the finances of it and how that alone can easily deceive the moviegoer (such as yourself) altogether.
WHERE IS HOLLYWOOD TODAY?
In 2014, the fate of the Hollywood business is leading into a direction that can closely resemble the same path a frequent drug user heads to: a downward spiral. In its golden years from the 1960s to the conclusion of the 1990s, motion picture studios did not care about the little project that could or the types of actors/actresses that were involved in them because they knew that with the right support team behind the project, the moviegoer would appreciate the motion picture. The studios did not have to worry about launching a motion picture at a particular time in the year in order to capitalize on the specific success they wanted to have. Want to win an Academy Award (Oscar)? Release your motion picture from the beginning of October to New Year's Eve to have a shot at the gold. Want to earn close to a billion dollars at the box office? Release your motion picture from the beginning of May to the beginning of August to get a chance in achieving it.
At this point, the business is plagued with as many hits as there are misses. One year, if an actor wins an Oscar, he or she can find it difficult to barely find work in the next year. The studios make motion pictures for ridiculous amounts of money only to continue the tedious game on trying to make a profit. It's the same type of game a gambler makes playing poker; there's always that fifty-fifty shot that they will earn a profit. So, to personify Hollywood, it is a compulsive gambler.
More and more actors, actresses, writers, producers and directors are taking a different approach on making the business work best for them. For example, several months ago, Brad Pitt (World War Z) and a long-time actor who has particularly chosen his projects to launch himself as an A-List star) walked away with a Best Motion Picture Oscar because he took a page right out of the new Hollywood playbook: be creative. Recently, Pitt entered his fifties, a time for an actor that if you haven't launched yourself as a niche actor (i.e. Bruce Willis, "the action actor" or Morgan Freeman, "the dramatic actor"), you can easily be left out of the business. Instead of trying to act more often in drama or comedic pieces, he along with Ben Affleck (Argo) (and the man who started it all, George Clooney (The Monuments Men)) have turned to producing and potentially directing alongside starring in a motion picture to build their success.
For your information, in the last fifteen years, only seven motion pictures have earned the critics four-star rating of a motion picture classic in the business: Gladiator (2000), Million Dollar Baby (2004), Children of Men (2006), The Dark Knight (2008), Milk (2008), Her (2013) and 12 Years a Slave (2013).
Therefore, with 12 Years having entered into motion picture history with its iconic four-star performance, Pitt has begun to rework his career so he can survive in the new way of the business. In addition to 12 Years, Pitt has also gotten into the overly saturated realm of television by producing the American Broadcasting Company (ABC) Studios drama Resurrection, which launched this past television season and is so far the highest-rated new drama for 2014. We'll see what the fall crop of programming for television brings.
In being creative, Hollywood currently launches motion pictures differently by having video-on-demand taking a large portion of the entertainment platform and is booming with its digital download sales. From its deals with iTunes and Amazon (the world's two largest retailers for entertainment media) and the massive increase of presentation on television from networks like AMC Networks, Inc. (AMC) and FX Networks (FX) showcasing that they are not just cable channels, they can present motion picture-like programming just like the next channel (like the Home Box Office (HBO) has notoriously done for years, delivering high-quality programming with no signs of slowing down). Now, more professionals in the business see creative opportunities to build on core concepts that could not be done five to ten years ago, but it is currently possible. For instance, say what you will, but one of the most notable examples of what we're referring to comes from The CW Television Network (The CW) series Arrow. It premiered in 2012 and hails from two of the writers (Greg Berlanti and Marc Guggenheim (Brothers & Sisters)) who helped make one of the most atrocious motion picture performances of all-time in Green Lantern. Along with Andrew Kreisberg (Fringe), they were able to transform a quite dull character in the world of DC Comics into a mega powerhouse superhero. Simply put, people from all over the world are in love with the series, which stars Stephen Amell (Hung) in the titular role and having a lot in the business beginning to ask themselves: could this be a start of another creative direction Hollywood can take with adaptations? Could you begin a concept on television and have it succeed just as good (or if not better) as on the big screen? The development of other comic book superheroes onto television such as the upcoming The Flash, Gotham, Constantine and iZombie can and is currently happening to what could be great success. We will extend on this more when we discuss, Suggestions for Reviving Certain Motion Picture Studios.
To conclude this section, we will add that in this year alone, there have been more digital platforms, shows and ways to embrace entertainment than any one person has time for. The business is in pretty bad shape, but it can repair itself. We hope that with the discussion of profitability, you begin to ask yourself how you contribute to this and to realize that creativity is the best way to make the most money. Plus, it's about passion as well. Did Captain America: The Winter Soldier really have to be made for a total cost of $441 million? If you are not familiar with what "total cost" means, we will be explaining it in the next section. By the end of this editorial, we hope you will also walk away understanding that whatever is reported and hyped on websites like ComicBookMovie is just that: hype to get you in a jaded state. This results in bloated expectations. For example, take the current hype about the newest Batman and Superman motion picture, Batman v Superman: Dawn of Justice. Whatever happens, let the studio (Warner Bros. Entertainment Inc. (WB)) make the motion picture they want to make because they have a vision of what should be done on the big screen. In relation to the conversation, last year's Man of Steel only made a sordid $42 million in profit. So, if it does not reach profitability, are you to blame? Remember, Hollywood is not stupid. It knows quite well of all the rumors and what to bring to the table.
With that, let's begin the discussion on profitability of certain recently released motion pictures and how television plays a large role in later parts of this editorial.
PROFITABILITY
In Hollywood, finances are everything. They determine whether a motion picture gets made or not. Though, even when all the money is in line, there can be serious doubt on the viability of the picture itself (such as whether it will play well with audiences or if it was a good idea to make it in the first place). Today, motion picture studios have very much "retired" from making motion pictures. "Retirement" means that the studios have taken the most conservative approach to their motion picture portfolio one can take where they involve themselves less and instead reap the benefits of whatever a picture can bring. Instead, the more production companies that can be gotten to help pay for it, the better. Why buy the cow when you can have the milk for free? Better yet, why pay for something that someone else is willing to do without having to suffer the consequences of motion pictures or series of motion pictures that don't work (ala what occurred for the demise of Metro-Goldwyn-Mayer (MGM)). One would think that because of this, motion pictures today should be creatively better because there aren't a lot of heads in one room. However, there are consequences for when one wants too much of a good thing. Therefore, it is fair to say that production companies have every bit to worry about how to make a picture as much as the studios.
For instance, when Walt Disney Pictures (Disney) decided to acquire Marvel Studios, LLC (Marvel), it was taking a big risk to determine whether they would have to be involved with Marvel's property development or not. At this time, it seems like Disney has done nothing more than to sign the bill for releasing a Marvel motion picture and has not involved themselves with the development of whatever is being released. Because nothing has been released yet, the same thing can't be said about Lucasfilm Limited, LLC (Lucasfilm). There isn't any proof of whether Lucasfilm can handle the development of films without Disney's help, especially financially. At least Marvel had financial confidence coming from the Paramount Pictures Corporation (Paramount) with the first two Iron Man motion pictures, Captain America: The First Avenger and Marvel's The Avengers. At the same time, like a drug addict, the studios are out to find as much money as possible. If one must have too much of a good thing, there must be control and caution with the things one invests with. So, if a drug addict wants to have heroin, it's not a good drug to have in general because of the many problems it brings to the human body. In relation to this ongoing discussion, it's not prudent for the studios to invest in property that is not well-developed for franchise potential because there will be massive lost that can be predicted; just like when a drug addict takes heroin and suffers the health risks.
Please understand that the following information will derive from several websites (which have published this information on the record) such as Box Office Mojo and most notably Deadline Hollywood (or simply Deadline). Beginning in March 2014, Deadline decided to take a look at the top sixteen highest grossing motion pictures. They did a full analysis on the types of costs that go into making a picture. Ultimately, they wanted to figure out whether the motion picture was profitable for the studio or not. We want you to keep this in mind particularly because if there is a motion picture that you would like to see hit the big screen that derives from a comic book medium or another, these are the types of costs studios must factor in order to go through with making and releasing the picture.
According to Deadline, the types of costs that a motion picture must go through in order for a movie studio to consider making and releasing it are:
Net Production Cost, Domestic Releasing Cost, International Releasing Cost, Domestic Home Entertainment Cost, Interest, Residuals, Participations, Overhead and Distribution Fee.
When all of these elements are added up, it is called Total Cost.
Let's officially begin our discussion of profitability with major motion pictures released in 2014 by addressing, Divergent, a Summit Entertainment LLC (Summit) release starring one of Hollywood's "It Girl's," Shailene Woodley (The Descendants).
As of the week of July 7th, 2014, it saw a worldwide box office of $269,188,803.
If you are not aware, Summit is a subsidiary of Lions Gate Entertainment Corporation (Lionsgate). Being that the picture is of the same nature of The Hunger Games franchise (which was released through Lionsgate), it is only fair to estimate that whatever marketing and other considerable costs that went into the last installment of the franchise (The Hunger Games: Catching Fire) also went into Divergent. An additional reason why we can estimate this is because Lionsgate seems to be wanting to launch the franchise in the same way it has done for The Hunger Games. Therefore, it would seem reasonable that the company would spend right around the same amount of money in order to get it released.
The worldwide box office for Catching Fire was $864,400,000.
The total gross was $562,050,000.
How did we get to $562 million? Theatrical rental ($212 million), home entertainment ($214,550,000) and other revenue ($135,500,000, specifically, we don't know what those are) are what creates the total gross. The definition of total gross revenue simply means that "the total income received before any deductions or taxes."
The total cost was $267,134,000.
In speaking about profitability, we have come to the realization that to make what we call a "quality profit," we believe that ideally, a motion picture should make twice as much as its total cost. So, we're going to take the total cost and multiply it by two:
$267,134,000 x 2 = $534,268,000
$534.2 million is the target amount the picture should have made in order to return a quality profit. For most (if not all motion pictures), this may be impossible. Therefore, we believe realistically, a picture should make at least 50% or more a quality profit. Considering when subtracting the total gross revenue by the total cost, the total profit was:
$562,050,000 (total gross revenue) - $267,134,000 (total cost) = $294,916,000 (total profit)
Now, how are we going to see if it made a quality profit? We are going to take the total profit and divide it by the target amount:
$294,916,000 (total profit) / $534,268,000 (target amount) = 0.552 or 55% (quality profit)
To conclude, Catching Fire made 55% of a quality profit, which holds up as being profitable for Lionsgate.
As for Divergent, the worldwide box office was $269,188,803.
Because Catching Fire was released in only 233 more theaters, we could imagine that total gross revenue was at $558,050,000 or about a million less on what was calculated for the previously mentioned motion picture ($562 million).
The total amount of promotional considerations for Catching Fire was at $137,134,000.
Also, it is reasonable to apply the same calculation philosophy behind getting the total gross revenue. Therefore, we're looking at $132,134,000.
Because of this, to get a total cost, one has to add:
$85 million (motion picture budget) + $132,134,000 (promotional considerations) = $217,134,000 (total cost)
To get the target amount:
$217,134,000 (total cost) x 2 = $434,268,000
To get the total profit:
$558,050,000 (total gross revenue) - $217,134,000 (total cost) = $340,916,000 (total profit)
To get the quality profit:
$340,916,000 (total profit) / $434,268,000 (target amount) = 0.785 or 79% (quality profit)
To sum up, Divergent made an exceedingly impressive 79% of a quality profit. For the debut of a franchise, it is certainly heading in the right direction. However, just as long as the rest of the three installments stay within a reasonable rollout, then the Divergent Series should be successful.
Next up is Captain America: The Winter Soldier, the sequel to the 2011 motion picture, Captain America: The First Avenger. Because the budgets for Thor: The Dark World and The Winter Soldier are the same and were released within six months of each other, it makes sense to use the same calculation from The Dark World.
The total cost for each film was $434,209,000.
To get the target amount:
$434,209,000 (total cost) x 2 = $868,418,000 (target amount)
To get the total profit:
$573,612,000 (total gross revenue) - $434,209,000 (total cost) = $139,404,000 (total profit)
To get the quality profit:
$139,404,000 (total profit) / $868,418,000 (target amount) = 0.160 or 16% (quality profit)
From this outlook, The Winter Soldier could not produce profitability for Disney as they begin their relationship with Marvel. With only a 16% quality profit, Disney has to protect its bottom end, given the amount of fatigue that can come when these kinds of pictures are released. According to Box Office Mojo, The Dark World suffered more than 50-61% drops in week-to-week weekend openings. Could it have been the time of the year that helped with the difference or characters and story themselves? After all, The Dark World opened only two full weeks before Catching Fire to show any kind of success and profitability. Also, the motion picture was hurt by the success of the holiday romance comedy sequel The Best Man Holiday from Universal Studios Inc. (Universal), which drew audiences away from within its second week. By comparison and interestingly enough, The Winter Soldier had three weekends on top of the box office before having audiences distance themselves from yes, yet another romance comedy in The Other Woman, which took the number one spot at the box office. Perhaps The Dark World should have opened before The Best Man Holiday, but one could never know since the latter motion picture was a surprise success. In the age of the box office where you have to make most of your money during the first ten to twenty days of release or the motion picture becomes unprofitable, studios such as Disney (which we believe is not a real major studio, it is a specialty one) has to assess the market for creating pictures that audiences will not grow tired of and are generally appealing.
Moving on to The Amazing Spider Man 2 and X-Men: Days of Future's Past. If one examines the budgets of these motion pictures, both were made for $200 million.
As of the week of July 7th, 2014, their worldwide box office results were $704,977,039 (The Amazing Spider-Man 2) and $726,033,223 (X-Men: Days of Future's Past).
The profitability factor for these two motion pictures must be horrible. Why? The answer is quite obvious.
For starters, both pictures failed to register a $100 million opening with their nearly 4,000 theater openings. For your information, according to Box Office Mojo, Catching Fire registered an opening of over $158 million. Both pictures are well known properties in pop culture, had bloated and unnecessary budgets and are the titular franchise pieces to their respected studio, just to name a few.
With regard to the last point, if you cannot achieve profitability with these properties, you will definitely be losing more money than you are actually making. For Columbia Pictures Industries, Inc. (Sony), times could not be tougher. The company is the owner of the world's largest music label brand and electronics maker (aside from Apple Inc. (Apple)) and have had discussions about the possibility of selling off their entertainment division because of its profitability. According to Variety, Sony Pictures Entertainment co-chairman Amy Pascal stated on the record the following about their biggest superhero property:
"We are expanding the ‘Spider-Man’ universe into ‘The Sinister Six’ and ‘Venom,’ so that we have ‘Spider-Man’ movies every year..."
The realistic probability of that is entirely insane. Simply put, Spider-Man is not as popular as it once was. In our discussion Suggestions for Reviving Certain Motion Picture Studios, we will discuss what could Sony do to really save the Web-Slinger and the results might even surprise you. As with Twentieth Century Fox Film Corporation (Fox), X-Men (being that Days of Future's Past was their seventh motion picture in fifteen years and has still been unable to crack at least $900 million or a more favorable $1 billion) has been financially brainless to make time after time. When will studios begin to realize that you cannot keep making motion pictures at a rate that never seems to reach profitability? In seems like the old-age old idiom that goes, "Fool me once, shame on you; fool me twice, shame on me" applies like a charm with those franchises among others not mentioned. The level of disappointment to not achieve massive success from those films alone makes Sony and Fox the biggest fools in the entire business because they've been doing this for so long.
THE NETFLIX EFFECT?
Several years ago, Netflix introduced something that would be echoed across the Hollywood business: a streaming service. The service, which has amassed over 50 million subscribers, vastly moving away from HBO's 28.5 million subscribers, and is gaining momentum with each passing month. Much of this is thanks to its growing library of content and original programming. More and more networks in the Hollywood business are realizing that they too can make programming available to millions. This thought would have not been possible even five years ago where a great number of motion pictures opened to a $120 million to $140 million box office weekend during the most lucrative part of the year: the summer. Fast forward to this summer, there is not one motion picture opening to at least $120 million. The last motion picture to accomplish this feat was Catching Fire, which opened to $158 million in its opening weekend. A few weeks ago, Transformers: Age of Extinction opened at a disappointing $100 million in its opening weekend. Unless your motion picture has a "wow" factor, the picture will most likely won't open to the results it should. These days, in the United States, a movement called "cord-cutting" has taken entertainment and filtered it for what is worthwhile versus what is not. Netflix has created an effect in the Hollywood business that the moviegoer or TV watcher wants: smart, thought-provoking content whenever and however they can get it. These days, House of Cards, Hemlock Grove and Orange Is the New Black are the talk of most work break rooms and social media platforms for not only the performances of these types of entertainment, but how they are delivered. All shows made by Netflix never have a window of week-to-week wait times. Netflix showcases them with originality and foresight of what is going to get the viewer to continue to watch. All shows are available the same day while the history of the company has pegged Friday to be a launch for a new season for a particular show.
Today, what is being delivered at the theater in the form of half-baked, tedious motion picture concepts are slowly losing profitability for the entire Hollywood business. The reason is quite simple: the business model is changing. People want different, fresh, bold ideas. In addition, Netflix has created an environment of availability with tens of thousands of television shows and movies to choose from. The average subscriber choosing to watch one show or movie tends to not stop watching. Netflix has created a behavior more of a real home box office that isn't HBO. With home theater systems and high-definition televisions selling and being created to becoming technologically smarter, the experiences and the reach for Netflix has gotten them to the place they currently are. Why do you think ABC moved four Marvel properties to the company? Was it to see a minimal leap in their plans for the comic book maker? No. They moved the four properties to Netflix to buzz their brand. As we have discussed with The Winter Soldier and The Dark World, Marvel will need to create a buzz factor to continue growing the brand and is something that Marvel's Agents of S.H.I.E.L.D. hasn't been able to do because it has mostly been a disappointment. Even though it does respectfully well on digital downloads, audiences aren't moved with the comic book show as they are with Arrow. If Marvel wants to see long term growth, buzz and originality will have to be key.
To conclude, this is why there is a Netflix Effect. It's alive and booming. With Arrow having a near five-star rating on the streaming service, viewing habits and story concepts are changing. Could the series be foreshadowing how to tell a comic book story? We believe this is why comic book movies don't work. They're based on two-, four- or even six-hour sagas about their story; which doesn't give justice to the hero you may love. We're going to extend on this shortly. If you don't have Netflix, give it a try and see what Hollywood is beginning to adapt to.
SUGGESTIONS FOR REVIVING CERTAIN MOTION PICTURE STUDIOS
PR-wise, it has not been a pretty couple of weeks for WB as discussions of a possible merger with 21st Century Fox Incorporated have called into question the strength of its parent company, Time Warner Inc.. After all, right now, for entertainment purposes, WB is the most successful and popular brand. With full ownership property rights in Hanna Barbara characters to DC Entertainment (a.k.a. DC Comics), the brand is more than capable of being able to continue a track record never seen by a major studio. In 2013, WB was surprisingly able to be the market share winner with just over 17%. How did they do this? Well, with surprising breakouts of course. With The Conjuring, Gravity and The Hobbit: The Desolation of Smaug alone, the studio was able to do quite well globally to easily capture the market share. At this point, with future gambles in Batman v Superman: Dawn of Justice and Fantastic Beasts and Where to Find Them, WB looks to continue a market share lead that will easily help them stay where they are currently at.
Going forward, the major suggestion for the studio would be to literally filter through owned property and make profitable motion pictures and/or television shows from them. For example, one of the most lucrative and legendary properties WB owns are the Looney Tunes. In 2013, former studio head Jeff Robinov formed a new arm for Warner Brothers Pictures dedicated to animation called Warner Animation Group (WAG). Its first release was the semi-successful The LEGO Movie, which had an estimated budget of $60 million and a projected total cost in between $250 million to $300 million. Even though there have been discussions of a sequel, there is without a doubt a major need to create motion pictures from these characters in order to make the studio more attractable in the animation front. However, creating LEGO and Happy Feet sequels will not make the cut.
Now, of course, the studio also owns DC Entertainment. Though, that's just it, they own it. Roughly, they have not allowed the division to spin away from the studio in the same way Marvel Studios has done with Disney and create projects they see fit. In terms of DC Entertainment's future, the reality is to continue using the brand on television and to stay away from creating motion pictures for its comic book characters. Why? Well, as we have mentioned with the studio's highly successful show Arrow, three other shows are entering television this fall hoping to continue the trend the studio has had that includes in Gotham, The Flash and Constantine. If you would like, we could write an editorial about why comic book motion pictures don't work in detail. For now, we will be as clear as we can as regard to this sentiment.
Comic book motion pictures are nothing more or less than visual overall presentations of their respective work. Character development and mythology are stripped for the sake of running time. If you watch Arrow and compare it to The Dark Knight Trilogy, at first, you might say there's no comparison because one's a TV show and the other a motion picture. If examined, you would realize that in terms of story, character and mythology development, Arrow is easily one of the best comic adaptations ever made. Put another way, when you can take your time enjoying something, you enjoy it more. Haven't your parents, friends or relatives ever tell you, "Slow down, chew your food slowly; you'll enjoy it more?" Metaphorically speaking, comic book motion pictures are like taking your food and eating it fast; never enjoying it whereas comic book television shows aren't. It's like taking your food and eating it slowly, savoring the flavor of every bite you take. At best, you'd have six to ten hours in the entire mythology of a given comic book motion picture versus Arrow which has logged 1,848 hours at the end of its second season. Get the difference? No one really knows the whole story of Batman, Spider-Man or X-Men. Said in another way, comic book motion picture adaptations are like reading Cliff Notes of them whereas comic book television shows are like reading the actual material. Let's say you bought the Cliff Notes of Paradise Lost. You're going to pretty much know what the book is about, but it's not like actually reading Paradise Lost where you will learn every moment, every element of the material itself. Make sense? Why make a comic book motion picture for a crap load of money only to have disappointment in the appearance of it? The point is, in today's Hollywood (especially when you talk about comic books and other intellectual properties), mythology is everything. When you focus on it, it thrives. Game of Thrones, Arrow and The Vampire Diaries are just a few examples and made by WB. If they can focus on maximizing this new Hollywood approach in telling the best mythology you can, they're going to win.
At this point, Disney has began a plan to strengthen their influential presence in the Hollywood business by acquiring production companies that would allow them to make more commercial motion pictures than the company has ever done. What will the results be? The outlook is for Disney making less highly successful animated motion pictures such as Frozen and live action attempts such as Maleficent. Currently, the company owns DreamWorks Studios (DreamWorks), Lucasfilm, Touchstone Pictures (Touchstone) and of course Marvel. If you look at the company line of motion picture releases, yes, they are the second most successful motion picture studio behind WB—but they are not a major studio in the traditional sense.
We believe that to be a major studio, one of the major characteristics you have to have is flexibility. By this, we mean to have a variety of different motion pictures to please audiences. The company under "Walt Disney Pictures" does not make R-rating motion pictures. They do not make romantic comedies, action-adventure motion pictures, dramas or thrillers. Rather, they leave these types of motion pictures to their arms in DreamWorks and Marvel. Therefore, we conclude that Disney is a highly-successful company, but by no means a major studio.
So, suggestions for the studio going forward? We believe that the company should take a look at its relationship with Marvel and reexamine how it wants to continue delivering successful profits. As we mentioned at the beginning of this editorial, the profit made on the last two Marvel releases are just absolutely atrocious as Marvel was bought for $4 billion in 2009 to make profits from it, not lose. Time will tell how well the company will do with its relationship with Netflix and making four television shows with the streaming company. One thing is for sure: Disney cannot keep making motion pictures at a total cost of $434 million a picture. As the fate of the box office is in peril and only two Marvel motion pictures (Marvel's The Avengers and Iron Man 3) grossing $1 billion, the real question for Disney is whether they want to keep gambling or suffer miserably in profits? Another question should be is whether they even want to make a profit? We say this because only making $139 million in profit after spending $434 million is completely coarse; especially with Guardians of the Galaxy coming out in a couple of weeks whose budget (and probably total cost) is right on par with The Winter Soldier and The Dark World at $170 million, according to The Wrap. Readers of this editorial have to remember that in order to make a profit and make motion pictures at a high cost, you have to make twice the amount in order to make a profit. Making a profit helps the company make more motion pictures and is the only way to continue to see more Marvel properties on the big screen and/or television.
As for Lucasfilm, the company will have to take the new Hollywood approach in order to maximize its success going forward. With a new Star Wars motion picture out next year, the company's only outlook is making more motion pictures about Star Wars, as if that is the only purpose of the production arm besides Indiana Jones. George Lucas, former owner of Lucasfilm, idiotically kept his career in a bubble with these types of motion pictures that made the company rather useless. If Star Wars Episode VII is successful (which by all amounts is fifty-fifty because of its plot in which they've ruined the purpose of why Star Wars Episode VI: Return of the Jedi concluded being that the evil in the force was defeated and now they're not?), then the studio can enjoy some success, but not much. For Disney, they should explore making low-cost, pro-family motion pictures in order to make considerable profit. The company was notorious for making motion pictures about family situations and life. Now, they have become a studio similar to Paramount where they are only interested in making tent poles. Making a low-cost, pro-family motion pictures such as The Parent Trap for around $16 million will go a long way for the company. If anything, it will help them re-identify with its base: families beyond just animation.
We wanted to mention some thoughts about the revival of MGM and how they have showcased the new Hollywood strategy we have been discussing during this editorial. MGM, notorious for its film library of over 4,000 motion pictures, went bankrupt in 2009 because of gambling too much on motion pictures that did not make back the total costs for the studio. So, what MGM did was reinvent itself in 2011 under new leadership. Instead of making their own motion pictures and be responsible for releasing (being a distributor), they decided to reinvent their company to be more production-based rather than a major studio-based company. On each motion picture the studio wants to make, they commit to 50% of the total cost of the motion picture and rely on a major studio to put up 50% (in a lot of cases, all the promotion and advertising costs are associated with the motion picture).
For example, the upcoming MGM releases will include: Hercules (Paramount), If I Stay (WB), The Hobbit: The Battle of Five Armies (WB), Hot Tub Time Machine 2 (Paramount), Max (WB), Poltergeist (FOX), Don't Mess With Texas (WB), Bond 24 (Sony), and Ben-Hur (Paramount).
With growing profitability under this model, the studio has a big chance in staying healthy in Hollywood for the foreseeable future. The only decline MGM can have is if the studios they decide to make motion pictures with are not doing financially well. As a result, the studio's profitability goes down. We believe that if the studio continues small and focuses more on television (much to what they did with FX Networks' Fargo), they will continue a nice track record.
With regard to Sony, they are another company that seems to be in limbo. On the one hand, they have been successful in launching their electronic slate of products such as PlayStation 4, televisions and home theater systems. In addition, they have a television branch that has delivered great success in the reigning Best Drama Breaking Bad, TV's number one new scripted broadcast drama The Blacklist, the critically praised Masters of Sex and continues to show an aggressiveness to keep the comedy Community around via Yahoo Screen for a final season. On the other hand, where Sony has failed is at the motion picture front. Their release of recent tent poles of: After Earth, White House Down, Grown Ups 2, The Smurfs 2, Cloudy with a Chance of Meatballs 2 and RoboCop have underperformed so poorly that the company has lower the number of films they will make in the coming years under the direction of new studio head Michael De Luca, according to Variety. As mentioned before, the latest motion picture that has joined Sony's continuous string of tent pole flops is none other than The Amazing Spider-Man 2.
In closely looking at the Spider-Man franchise, there have been five motion pictures under its belt. Like stated before, it is surprising that not one of those has grossed a billion dollars; especially when there has been more money put into each installment. It also begs the question of how legitimate is the franchise? Do people like the way the characters have been portrayed and/or written? Or (with regard to the rebooted Spider-Man motion pictures), have the releases from Marvel Studios affect its chances of trying to create a good story outside the Marvel Cinematic Universe? Whatever the case maybe, we think there is a way that help save not only this franchise, but other franchises the studio has to its disposal.
Luckily, Sony has a streaming service called Crackle. To boot, it seems as if the service is re-evaluating its abilities by adapting to the trend of creating original programming. Knowing this, we believe that such franchises as Spider-Man, Men in Black and Bad Boys would make great television shows. The first reaction to reading this should be that it would be the worst thing to do as it would diminish the chances of growing the brand. However, Sony has tried numerous times to make considerable money from these franchises and has not seen the return that would warrant more motion pictures. In other words, it would be insane to continue to do something that legitimately isn't working. Our reasoning for taking these franchises to the silver screen is quite simple: television isn't what it used to be. Today, like stated before, television is increasing its scope by being as creative and innovative as possible. Part of the reason why streaming service and cable shows have done so well with audiences is because in most cases, the level of production are on par what one would expect from a motion picture. With this, more and more Hollywood actors, actresses, writers and directors are seeing the likelihood to do television.
The way in which a Spider-Man, Men in Black and Bad Boys show would work would be to have it be produced by its television branch (Sony Pictures Television) and let them roll with it; because it seems like they know how to bring out the characters and story audiences want to see based on the show that were previously mentioned and among others that haven't. To make it successfully work on Crackle, the streaming service itself should change and challenge Netflix by having customers pay (instead of providing it for free) for a low rate a month and give access to the impressive history of content from the motion picture, television and music front. This way, when these shows do air, there is context or incentive for customers to check out other Sony products. Therefore, it provides the company more money. Sinking $20 million to $40 million a year on a television show of ten to thirteen episodes would not only provide for a lucrative return, but allow for those franchises to finally deliver the stories audiences would be interested in. That is because like said earlier, people love mythology. Perhaps Sam Raimi, Marc Webb or Roberto Orci would consider producing a Spider-Man show instead of a motion picture because it would mean that there is more going into the story instead of coming up with a bloated concept that could only go so far. To add, Spider-Man has so much characters and story to work for television that it is somewhat of a shock that it has not been done before. All of the same things could be said for Men in Black and Bad Boys by considering to have Will Smith, Barry Sonnenfeld, Michael Bay and Steven Spielberg produce those respected projects for television; although the latter could be seen as a rip-off of Miami Vice or not if a more comedic approach is taken for its delivery. To be more diverse in a re-envisioned Crackle, Sony could consider to bring aboard someone who has produced most of their comedic motion picture projects over the years: Adam Sandler. Considering that his career is on the decline, Sandler could save what he has by creating and potentially starring in an original project from Happy Madison Productions that could gain audience appeal like his production company has done with Rules of Engagement and The Goldbergs.
CLOSING REMARKS
First and foremost, we want to thank you for reading what we have presented before you because it took a lot of time to put together and conceptualize. The reality is, the outlook for the Hollywood business is as hopeful as it is with any business today. Also, it's how you make it. No one person, group or organization can change the business in a vacuum. Knowing how to transcend and knowing when to change is happening is paramount to the development of a successful Hollywood business or business for that matter. It's not about making half-baked, tedious motion picture concepts. It's about knowing when an idea works. When it does not, it should be put to rest. This is the problem the music industry is facing with the growth of the streaming music business. That industry is one notorious on selling music first by vinyl. Then, by cassettes, CDs and finally digital. The industry went from selling on average 700,000 to two million albums a week to selling 20,000 to 100,000 albums a week; hailing the latter a success when really, they're just trying to keep their overhead.
Also, like said before, any outlook to any business works when you have the right people and ideas flowing. A reasonable question to ask is does it always work? The answer can be found with growing results from Netflix to television shows developed by other networks. The real reality here is that Hollywood (like other businesses) are losing money each time they gamble. When you gamble too much, yes, you can and will lose it all or not. We are pretty sure that there is a lot of disagreements that can be made on the direction motion pictures studios can take to help their franchises, but the finances are facts. The numbers that have been published are on the record and have stood that way to demonstrate what a given motion picture has made. This last statement is made because there could be people in the Hollywood business who would say that numbers can change from time-to-time. If that is the case, then the numbers we've provided have showed success (such as Catching Fire and Divergent) and failure (most or if not all of the Marvel character motion pictures released this summer because as of now, we don't know the final numbers for Guardians). To be clear, we greatly like motion pictures and television. For the best interest of keeping them viable, the suggestions are given to make Hollywood strive for a long time to come.
References:
"'Guardians of the Galaxy' Tracking for $60 Million Opening - TheWrap." TheWrap. N.p., n.d. Web. 20 July 2014.
"2013 Most Valuable Blockbuster Final Four – #1 ‘Iron Man 3′ Vs. #5 ‘The Hunger Games: Catching Fire’." Deadlinecom. N.p., n.d. Web. 7 July 2014.
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"Analysts: Sony Needs More Bigscreen Franchises." Variety. N.p., n.d. Web. 8 July 2014.
"Captain America: The Winter Soldier (2014) - Box Office Mojo." Captain America: The Winter Soldier (2014) - Box Office Mojo. N.p., n.d. Web. 20 July 2014.
"Deadline.com's 2013 Most Valuable Blockbuster." Issuu. N.p., n.d. Web. 7 July 2014.
"Divergent (2014) - Box Office Mojo." Divergent (2014) - Box Office Mojo. N.p., n.d. Web. 7 July 2014.
"Michael De Luca Becomes President of Production at Columbia Pictures." Variety. N.p., n.d. Web. 7 July 2014.
"The Parent Trap (1998 film)." Wikipedia. Wikimedia Foundation, 15 July 2014. Web. 21 July 2014.