The Movie Business

No one goes to a movie for the theatre, and all the innovation and investment has been on the exhibition side of the film business for the past two decades. And now the industry is paying the price.

Also for being out of touch with the changing world. In all verticals, it's about niches. Narrower products appealing greatly to smaller groups. Instead, the film companies are making generic, broad-based films hoping to reach everybody, and when you try to appeal to everybody, you appeal to nobody.

The world keeps changing and the film studios have not kept up. Not only did they miss the Netflix/streaming tsunami, they have not kept up with the viewing habits of customers. The studios have to provide something that can't be seen at home, something so important that it gets people to leave their houses and go to the theatre just so they can experience the film and have the right to intelligently discuss it thereafter.

However, most of the films being released are not worthy of discussion. Movies as religion has been on the decrease ever since "Jaws." "Jaws" and "Star Wars" showed the riches that can be rained down by a blockbuster, and then the studios only wanted to make blockbusters. This is hurting the major record labels right now. They're releasing fewer records trying to appeal to everybody via marketing and promotion that is no longer as effective as in the past and their market share keeps being eaten by indies. This is a recipe for death. There will always be a couple of big acts, but if you're not in the process of cultivating and releasing high quality, niche product, you're on the road to death.

How come Netflix realizes this and no one else does? Competitors keep criticizing Netflix for its plethora of product. And, of course, not all of it is good, far from it, but it gives the subscriber options, and what I love, that may keep me subscribing, 98% of other Netflix viewers might hate. But that one show for me, and that one show for others, is enough to get us to keep laying down our cash.

Which is different from the film business/theatre exhibition. Look at software, it's gone from a sales model to a subscription model. The transition was wrenching, but Adobe now makes more money, even Microsoft sells its software via subscription. I'm not saying subscription is the right way for film, but I am saying every flick is a heavy lift, getting people off the couch to buy tickets and see movies at set times in an on demand world. In the rest of commerce it's all about knowing your customer and having an ongoing relationship with them, and here film has failed miserably. I go and I'm gone.

And Hollywood believes fads never fade. Just like the music business. Remember when they thought "Guitar Hero" was forever? No, you get in and ride the wave and then get out. Anybody who thought superheroes were forever is just plain dumb. Just like the people who believe since sequels have a built-in audience it's best to pursue that angle. Traditionally sequels do less business, and only a handful of sequels was ever better than the original. Sheeple go to see sequels, and they're dissatisfied after the experience, and therefore less eager to go to a movie in the future.

There's no excitement around movies anymore. It's seen as a business as opposed to an art form. There's not a person in the world who respects David Zaslav, who is so busy cutting to make his numbers that he's undercutting future revenue. And let's not get started with Paramount.

Films sustained after the advent of television because they provided something TV did not. Grit, authenticity, dangerous topics. But then you could get nudity on HBO and then "The Sopranos" was better than anything released in the theatre. And it was a series. Who said filmed entertainment must be a one shot, two hour thing? If you truly hook your audience, you can go on forever. And "The Sopranos" ended. That's the mantra of modern TV, you do it until there are no more storylines. In film, you do it until no one is willing to go to the theatre, long after creativity has left the building.

But it was Covid that put the movies in the dumper. We're never returning back to normal. Covid killed the magazine and the movie. Quick, does your favorite magazine even exist anymore? I've stopped renewing because every time I do the title goes out of business. And the very few that sustain have changed their business model. Used to be you amped up circulation to charge advertisers, in other words you wanted a larger base to get more ad revenue. But that paradigm died. Now the title has to stand on its own, based primarily on subscription revenue. If you want "The New Yorker," it will cost you a minimum of $149.99 a year, prohibitive for the casual reader/fan. Today it's all about finding the dedicated fan and superserving them and charging them for the experience. Who are the dedicated fans of the movie business?
Well, there's a cohort of youngsters who need somewhere to go without supervision. And dying baby boomers who got into the habit in the sixties and seventies. But other than that...
The movies have no vibe, they don't connect overall, which is one reason the Oscars are a poorly rated joke. But it's not only the film business, but the film business infrastructure, i.e. the media hype machine. Do we really care about this competition? The young audience is much more interested in social media influencer culture, but big media abhors it, thinks the smartphone is the devil, and studio heads all think they're Samuel Goldwyn, who's been dead for fifty years, never mind Robert Evans.
Everybody in L.A. used to know the heads of the studios, they were royalty. Today everybody knows Ted Sarandos. An innovator, not riding on fumes, but continuing to innovate, because in tech if you don't, you die.
But studios keep generating more of what came before. As for last summer's "Barbenheimer"...that was a one-off, nearly impossible to replicate. Netflix was built on giving auteurs cash to make their pet projects, ironically the ones studios refused to greenlight. Whereas making a movie for a studio... All you get is interference, if you get the budget to begin with. You've got to change it, as if the brass knows better than the creator.

All to say we are never going back to the past. Many things are not forever. Or if they come back, they do so with a twist. In order to thrive, films must be different, unique, must-see. And they must have legs in conversation. If you want to break a movie today you should platform it, build excitement as it goes from city to city as opposed to opening in thousands of theatres on Friday and being gone in a matter of weeks. Today everything is here today and gone tomorrow. To succeed film must go a different way. Evanescence is anathema to film. Sure, there's anticipation for some movies, but most need marketing, and the best way to do this is to get the audience excited about it and let word of mouth flourish. Stop railing against RottenTomatoes. What next, get rid of the star system on Amazon? It too is imperfect, but eliminate it and business tanks. You're asking people to lay down their money, they're supposed to do so blind? That ship sailed with the advent of the internet.

So in order to survive, theatrical distribution requires many more movies with ever narrower appeal. This doesn't mean that every film will do minor box office. You never know when something niche will blow up wide. Like "March of the Penguins," or "My Octopus Teacher." If you get it right on a narrow basis people who are otherwise uninterested are intrigued. People are looking for excellence, credibility, heart, that's what gets people off the couch, not what they've seen before.

But that formula has been lost. Just like the worldwide success. Native films now do better in mainland China than Hollywood blockbusters, and if you're not following the explosion of electric cars in China... A broad choice of product, constantly refreshed. There is excitement about electric cars in China whereas in America not only is half the population against them, "The Wall Street Journal" relishes negative news. But anybody who studies the sphere knows that electric is the future, and without tariffs, Chinese cars would wipe the so-called Big Three off the map nearly instantly. Stay locked in the past to your detriment.

Innovation is always around the corner, which is why you have to see the future and disrupt yourself. But we're not seeing this with the movie studios, not at all.


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