William Goldman’s adage “Nobody knows Anything” rings truer today than when he first published those indelible words. Today, nobody really does. In fact, they probably know less than before.
The biblical collapse of the financial world affectionately dubbed the GFC has still got producers, agents, managers and writers reeling. The entertainment world is standing at the sidelines waiting for the second coming. However, following such epic destruction, when we are stripped from everything familiar and secure (although not good for us), comes a period of reconstruction. Not tinkering, but fundamental, structural change.
Tried and tested business models no longer apply and we’re scrambling to find a sustainable way to move our industry forward. Everyone is forced to accept savage cuts in their paychecks, despite the fact that media juggernaut financiers such as Dune Entertainment and Relativity Media have recapitalized. Even though agents and development executives are increasingly becoming MBA rather than creative graduates, few concrete answers are forthcoming. Executives such as Rupert Murdoch are often uninterested in movies.
Part of the answer lies in bypassing traditional theatrical distribution systems in favour of VOD, direct to DVD and various niche distribution models. The older Hollywood adage of “film it and they’ll watch it” is pilloried today as audiences become more sophisticate, fickle and specialized.
Theatrical to home exhibition windows are being tightened from 10-12 weeks to 4-6 weeks in some cases. Cinema owners are being forced to squeeze as much box office profit from their films in an impossibly reduced time frame. It has been argued that the widely known non viability of theatrical releases are justified because they serve as an advertisement to the home exhibition market to sustain the market. No more.
The average cost of a Hollywood blockbuster has crossed the $200 million mark (including P&A). Even during the frothy years of too easy money, such unabated economic growth is not sustainable. God has already punished excessive human greed with a great financial flood lasting almost forty months. As creatures of habit, we’re repeating these mistakes all over again.
The US witnessed an astonishing economic growth north of 5% in 2009, with an annualized box office return more than double this amount. While the technical GFC is a faint, ugly spot confined to economic history, employment rates remain stubbornly high. Production expenditure in California has increased by around 18% this year, from lows of around 60-70% of it’s peak. It really is a rose with many thorns.
Since much of America’s economic activity has been artificially stimulated by Obama’s spending spree, this life support cannot continue indefinitely. Foreign investors won’t support our debt indefinitely. Similarly, although box office during 2009 rose impressively, it was attributed to higher ticket prices rather than increased headcount, especially 3D, which has has reported prices of up to $18 per adult ticket. With the advent of 3D television and the initial investment of 3D projection equipment, ticket prices will be forced to drop.
The $4 billion Marvel Comics-Disney tie up suggests that these comic book properties will be exploited for years to come. It all depends on the box office of films such as “Green Lantern”. Some analysts say they may run out of steam in as little as 2 to 5 years. The already crowded market for comic books and graphic novels is already in decline. It has been likened to the dotcom boom that we’d rather forget.
What does this mean for writers? The rules of drama are robust and audience will always respond to it, despite the financial hell, fire and damnation occurring around us.
Traditional tentpole film business models are based on four quadrant audiences; males and females aged above and below 25 years old. New microniche audiences are appearing such as tween-aged girls (aged 8 to 12), grey movies (aged 60 plus) and such like. Producers are trying to define and incorporate these microniche audiences into future tentpole pictures.
Males are more disinclined to part company with their X-boxes and buy a movie ticket than ever. Empowered woman are leaving their man dates behind and embracing cinema in female packs like never before.
It’s scary, but exhilarating at the same time as we take baby steps further out into the unknown.