Friday, 12 December 2014

Hollywood Babble On & On #1203: Universal Just Proved Me Right.

If you're a regular reader of this blog you'll know that I'm not a big fan of the Hollywood Blockbuster as a business model.

If you're not a regular reader I will explain.

The Blockbuster Model is where studios cut back on the number of films they make and release to bet almost all of their money on a small number of big budget productions that will break all the world's box office records and leave them rolling in cash. 

Or if you want an even simpler explanation:
There's just one flaw with this program.

It doesn't work.

It reminds me of a story about 20th Century Fox in the 1960s. The company was on the verge of bankruptcy. They had to shut their doors and send their employees home because they didn't have the cash to make payroll. The reason they were in this jam was because the studio's management had spent way too much on what they hoped would be hit movies, but for every profitable hit they had, they had two mega-turkeys that nearly sucked the company dry.

That regime was ousted by the board and new one put in place. The new regime though was in for a shock when they announced their own business plan: "From now on we only make hit movies."

Oy gevalt!

No one sets out to make a flop. The previous regime at Fox didn't choose to make money-losers, they just made too big bets on too few movies. In fact, the films had become so expensive, like today's blockbusters, they had to break box office records just to break even.

The model I've suggested for studios is to offer a more diverse slate of films, made for smaller budgets, that way your risk is smaller, and the potential for profit greater.

Guess who proved me right.


I know, I'm shocked too.

For years they were the epitome of the Blockbuster Model. They spent hundreds of millions of dollars making and releasing dozens of movies they thought were going to be massive franchises. Some did succeed, like the later Fast & Furious films, and Despicable Me, did become successful franchises. 

But, and this is a brontosaurus sized but, for every one of them were more than one money losing turkeys like Will Ferrell's Land of the Lost rehash.

This put the company in deep dino-doo-doo. The new owners Comcast didn't like losing money, so they cleaned out some key positions and brought in new people.

Those new people brought in a new philosophy. They'd stick with the franchises that made money, like Fast & Furious, but instead of trying to make every film a home run, they went for my plan of smaller scale singles and doubles.

And guess what.

Universal Pictures had its most profitable year in like ever, without a single mega-budget tentpole blockbuster.

Even the films that tanked, and flops are inevitable, didn't do any real damage to their profit margins because they didn't cost hundreds of millions of dollars.

Now you're probably wondering why Universal did such a major about-face when the other struggling studios don't.

As I mentioned earlier the company had recently been purchased by cable giant Comcast. Comcast hadn't owned a studio before, and hadn't been completely taken in by the glamour of Hollywood. When they bought NBC-Universal, they bought it because they WANTED TO MAKE MONEY. 
They didn't care about trends, Oscars, or getting so-called "A-Listers" to remember their names at industry parties. What they cared about what making money in a fiscally responsible way. That meant more variety of movies made cheaper, so that when they have a hit like Lucy the profits are huge, and a flop like A Million Ways To Die In The West, can't erase those profits the way a Land of the Lost can.

Since I now have concrete proof that I'm right, I'm going to become incredibly huge headed.

Even more so...

1 comment:

  1. That is cool. But I will like to see more politically incorrect movies and t.v. shows.