An interesting footnote to the economy is that despite the strikes, the high cost of making motion pictures and the Internet cutting into entertainment, movies are going bigger than ever. I’ve noticed that despite the cash bleed of film production outside of Los Angeles to Canada, Europe, Asia and even other states in this country, there are a lot of movies that have been saving studios.
The mega-blockbuster doesn’t appear to be dead and with the recession/depression we are in, it has been my observation that people will pay to go to the movies. Sure they can watch and rent on DVD, streaming video, etc but there is still the social aspect of leaving the house to get away from the things that surround them (kids, bills, leaky faucets, etc) and escape to worlds of space ships, bat mobiles and romance.
Studios are cycliing again between boom and bust and a lot of them are just catching up on their cycle of layoffs. For people in the entertainment division, bad economic cycles are nothing new to them. The gotcha this time around is that people who work in the entertainment business are now finding that they are in competition with people laid off from other sectors in the part time filler jobs that they try to get to hang on until the next project materializes.
It may be some time for some of the projects to materialize as well depending on how the strike situations get handled. I would love to see a business model where the studios take a movie and just directly start showing it from the Internet. Forget about theatrical releases. I would love to see what kind of sales or rentals, similar to pay-per-view would be generated from taking a hit like a Star Trek movie or a James Bond film and just go straight to a streaming format. That would be a great metric as to what people would be willing to pay for and how accurate my statement above is about people wanting to go out for their entertainment.
In most major US cities, a first run movie, if seen in the evening is about $10-13 a ticket (US currency) and popcorn and drinks can add another $15-20. A date for two easily can be $50 just to get into the door and I don’t think that includes parking if you need to pay for it, even if you get a discount for seeing the movie. A movie rental is a few dollars and you can watch the movie in your underwear though that may or may not make it harder for you to get a date that night.
In good movie making, the producers, writers and directors have to have something that is entertaining enough that people will want to give up two hours (or 90 minutes) of their time and cough up $4 – 13 for. Studios these days aren’t taking chances with experimental stuff unless it has proved through the Internet or something viral that it will get millions of butts into the seats at the theaters. Fantasy and super heroic movies do well in times of economic depression. We should expect the trend to continue for that. Movies that look to be bootlegged will be released in Asia and Europe first to try and make some money before the cold reality of the marketplace kicks in. There are people who have a price point of free that don’t want to spend anything for a product. I wonder if that means that they will work for free for their entire lives.
If you have a decent, low cost documentary, you might have a market for it if you have a nice twist as to the topic that you are covering. Everything else is being milked to death in the reality tv shows on cable.
Overall, my take on the business of movie making is that it hasn’t really changed during the current economy. The delivery systems and business models for making a buck may be in flux, but they have been that way since the introduction of VHS tape decades ago and television even earlier than that. If something is entertaining and people want it, they will find a way to pay for it and see it.
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Kim Isaac Greenblatt
The Business of Movie Making
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