In response to an article by John Horn, Ben Fritz, and Rachel Abramowitz on latimes.com
I am not in Hollywood. I am in Cleveland. But movies have always been a dream, an aspiration, a passion of mine. I studied Film production in college, I began my own thriving small-scale video production company, and have been passionate about the interworkings of Hollwood ever since. But I continue to look at it from the outside, from a fan’s point of view, from the angle of a prospective consumer, but also as someone who cares about film from deep within my heart.
With all the financial upheaval in this country, it is no wonder that even Hollywood is beginning to panic about the loss of revenue. Times, they are a-changing. It is time to asjust, things are going to be different and change is never easy, but in times like these it is a necessity. Everyone is feeling it. I’m no economist, and even I have been effected by this recent recession, but I know that I have to adapt to this changing economy. I haven’t been hit has hard as most, but I too must evolve my business model to cope in this new world. Now, I’m not saying I have all or any of the answers for the higher-ups in Hollyood, but sometimes, when panic sets in, it helps to look to an objective outside opinion.
DVD sales can no longer be Hollywood’s main source of revenue. It has been counted on as being as much as 50% of the profit for a film over the last few years as well as a major source of revenue generated from releasing library titles onto the new format. Of course DVD sales have declined over time. Many studios have exhausted their library releasing sometimes as many a 4 different editions of a film (not including anniversary editions). Consumers snatched them up to bring their home video collection into the new millennium. But now that everyone has rebuilt their collection after the death of VHS, why is Hollywood surprised that DVD sales are in decline?
Blu-Ray discs came along at the wrong time. Sure the initial feud with HD-DVD didn’t help while everyone was waiting for a definitive format winner so they could begin building a high-def home video collection, but by the time a victor was determined, the economy was beginning to decline. Blu-Ray players are just now, 2 years later, starting to become affordable for the average home viewer. Blu-Ray discs are still fairly expensive for consumers who recently purchased their favorite films on DVD. Blu-Ray came out too soon after DVD took off to be a “must have”. Blu-Ray ended up essentially competing with DVD and DVD was far more affordable, and in a declining economy affordable will win.
Then again, DVD sales are down even on new release titles. Of course they are. This again makes sense. DVD titles are now being released within 3 months of a theatrical release. The market knows this, the people know this. Many opt to wait for a $5 DVD rental (or even $1 through RedBox, thank you NetFlix) over paying $20 for a theatrical viewing. Again, affordable will win. Others don’t see the need to purchase a $25 DVD of a movie they feel they “just saw,” especially when the average movie-goer seems to feel that current movies are (of lesser quality and) nothing but a way for studios to make a buck.
I have a friend who refuses to go to theaters because A) he can’t smoke in the theater but can in his own home, B) he can pause the film if he needs to leave, and C) because he doesn’t have to deal with the distraction of other people talking or using their cell phones during the movie. While the public atmosphere of movie-going is part of the experience, the cell phones are a nuisance, but that’s a rant for another time.
So the income model of the film market is changing. So DVDs (and home video – including downloads and VideoOnDemand) cannot be counted on as your primary source of income. Yeah, that’s too bad. But there was a time when it wasn’t the primary source of income. There was a different model that worked once upon a time. Theatrical releases used to be the primary source of income. This could happen again, but this too has changed: the scourge of cell phones, the outrageous ticket prices, the rude audience, and the abundance of expensive food (whatever happened to a simple popcorn and soda??) have driven, rather than attracted, movie-goers back to their homes where their big-scree high-def TVs and (and soon 3D capable monitors) let them enjoy similar entertainment experiences to the theater but in more comfortable surroundings (again, a rant for another time). Hollywood has always competed with Television. Home video was a concession and it worked well. It will continue to work well in our convenience-driven, sloth-like society. But now, until Blu-Ray, or the next format, becomes an affordable “must-have” it is not a viable source of primary income.
So returning to the theatrical release as a primary source, what is to be done to drive people out of their homes and back into the theaters?
In a scramble, studios are tossing out old guard management and bringing in new up-and-comers with hopes that they will be able to generate new income for the studios. So their solution seems to be this thing called “branded entertainment” – taking an already existing market and making a film to add another layer of revenue for the successful brand. Is this a boom for the film studios or for the companies on whose products the movies are based? Who wins with a Transformers movie? Does Hasbro win by selling more toys? Does Dreamworks and Paramount win by creating the film? The answer: those who own the rights will win. Hasbro owns the characters. Hasbro wins. A movie may be exciting and drive fans of the toys to the theater, but the overall market of the characters is where the profit lies. A studio licensing characters from a toy company can make a good movie, maybe even two (or one good one and one bad one), but will it become a reliable source of renewable income for the studio? No.
Older Hollywood models of profit were based on studios having ownership of their content and profiting from selling the license to those characters. Disney made a mint on Mickey Mouse and even had copyright limitations extended to protect its investment. Leon Schlesinger did the same with the Looney Tunes characters. Paramount did well rebooting Star Trek because A) it was an exciting film and B) it owns the property.
“Branded entertainment” property (intellectual property, that is) that is owned by someone else can make a good rescue move. It is a temporary fix. It is not a solution. But, even “branded entertainment” needs to be good quality to drive people to spend their money. Word of mouth is still the best marketing in Hollywood. A good trailer can give you a good opening weekend. Good word of mouth can give you repeat business, a longer theatrical run, a must-have home video and, “Titanic” income.
A quality film can become a franchise; a successful film can warrant spending more money for a more lucrative sequel. But planning a franchise based on zero experience with the property is unwise. Even time-tested material doesn’t always stand the test of time. Casablanca is an amazing work. It still holds up today. Turning Casablanca into a remake (or a TV show) doesn’t work. I was amazed at Peter Jackson’s King Kong. Here was a true fan-made film. It even works; it’s emotional and the special effects are amazing. But given the choice, which Kong will I watch? I opt for the 1933 original. We’ve all heard bad cover songs, and we’ve all seen bad remakes. Sometimes a classic is best left alone. But likewise, some material is best to be re-explored; but it is best explored because the material works for the current audience, or the story has a message that applies to current times. It is not best to explore old material simply to remake it. Don’t cover a song that already works unless you have a new take on it. And don’t remake a film just because you can! The results are rarely successful.
A planned franchise is a poor idea. Unless you have a team (and financial backers) 100% committed to a great endeavor, come hell or high water, it simply won’t work. Remember that Battlefield Earth was a planned franchise. So planning a franchise based around “branded entertainment” like a toy line, is a quick-fix. It’s not reliable income merely to put butts in the seats on a single Friday night, that’s like putting a band-aid on a gushing open wound. Hollywood is bleeding and we keep handing out band-aids. This financial trauma needs surgery: a new plan.
Change is scary. I am phobic of it. I am terrified to take steps off of dead center. So I am the last one to be saying this, but it takes guts to face change and to be patient through the transition. Wise investors know and believe that over time most investments will make money. It’s hard to see the forest through the trees. It’s a big risk. But it can pay off. Take Cleveland sports teams for example. Every year we struggle. The Indians are the worst team in baseball, again (and yes, they even made a movie (no, two!) about how bad the Indians have been). The Cleveland Browns, well, you know. Every year in Cleveland we optimistically say the same thing, “maybe this is our year!” And then a few weeks later in Cleveland we optimistically say the same thing, “maybe next year.” And this year, maybe this is our year… The Cleveland Cavaliers have superstars LeBron James and Shaquille O’Neal (“Kazaam” himself). There is lots of hype about a championship, a first in franchise history. This change has been a long time coming. It’s taken a lot of work, a lot of patience, and a lot of negotiations. But this year, maybe finally it will all pay off. In Cleveland we are patient. In Hollywood, we can’t be impulsive.
So what needs to change? Almost everything. This goes against much of current Hollywood financial advice, but the Old Hollywood System needs to make a come-back.
Studios need to own their own content so that they can stretch any “brand” across multiple markets: toys, clothes, DVDs, spin-offs, etc. Actors need to partner with studios rather than be their competitors. Studios can’t make films without actors. Actors realistically can’t work without big studio films (independents and theatre are again a rant for another time). Actors need to take greater profit participation deals rather than huge up-front salaries. Someone with something to lose will work harder than someone with nothing to lose – currently all of the financial risk lies with the studios and producers – this kind of deal paid off in spades for Jack Nicholson on Batman. Hard work does pay. And an attractive and lucrative deal will likely lead to another, much as a successful film now almost automatically leads to a franchise.
Additionally, franchises need to be based on more than profit. A good film, no matter if it was made now or in the past, has always been measured by how good the story is. And we’re not talking the latest Michael Bay flash-in-the-pan special effects driven high-opening-weekend-box-office good. I mean a movie that people will love and cherish and want to view again and again. Casablanca, Titanic, and Star Wars have good stories, great ideas and compelling characters. This is what makes a film good. This is what makes a franchise viable. Making a million dollars doesn’t automatically give you the same return on investment for a sequel. A franchise needs to be based on compelling characters that can drive a continuing story. Do we care what happens to Rick after Casablanca ends? We can assume he went on with his life and we can be content with that. Do we need to see what happens to Luke and Darth Vader? No, but we sure as hell want to!
Films show us characters we would like to know. They hold a mirror up to life for us and we begin to relate to them. Over the course of a story (in a sitcom, a play, a television drama, a radio show or a film) we begin to care about them as they take us on their journey. When the journey ends either we can make our peace with the outcome and let a story live by itself, or we can be compelled to want to relate to those characters again and again, as in the case of television shows. It is this type of compelling story that needs to drive a franchise. Stories shouldn’t be made just to fill a void. Stories should exist because they need to, because an idea or need or viewpoint is out there and needs to be expressed. Characters in film need to drive the story, their story. We get to spend 2, sometimes 3 hours with them, but ultimately and subconsciously it is the story that compels us to stay in our seats. It is fine to spend an hour with the cast of ER, for example, or a half-hour with The Simpsons, because the characters are hollow enough to be a way to tell a story, not enough to drive one. Nor is the story compelling enough to keep us engrossed. This is the trouble with “branded entertainment,” it exists to fill its own need; it’s not necessarily designed to drive a 6 hour film franchise.
Franchise films and “branded entertainment” are instant gratification tactics, a product of, and fuel for, this instant gratification society. They are the band-aid, not the solution. They are the quick fix and the problem. Films are magical; they whisk us away in realistic ways that otherwise we could only dream about. But our dreams are becoming tainted by the bottom line. Do we want dreams and the rewards that come with a restful night or do we want to knock ourselves out with sleeping pills? What are the dreams worth?
Be patient. Change is coming. Evolution happens naturally and organically, much like a film develops from the imagination of a writer with a compelling idea. I hope these seeds can help. I believe in Hollywood. It still allows me to dream.