The film industry has long been standing on a schizophrenic system also known as the tentpole system. Production and marketing costs have skyrocketed and tentpole movies have starting budgets of $200 million that can reach absurd sums of money as have the two most recent Pirates of The Caribbean movies that both costed more than $300 million to be made.
But Studios see a return on these investments, right? Well, ideally, yes, but it isn’t so easy. You’d be surprised to know how little of the box-office money actually make their way back to the studio and then we have to add to that the demise of the DVD business, which once accounted to half of a movies source of investment return, and the enormous effect piracy has on diminishing exploitation revenues. It’s a tough time to be trying to make a profit on movies.
The Studios response to the increase in production costs and fragmented audiences has been to put in place a system that produces less movies a year and bets on huge, tentpole movies to hold the fort. These huge movies not only have to make a profit to pay themselves off but also offset any financial shortcomings other movies from the Studio’s slate might have suffered.
Such a huge bet has to be as safe as possible. That’s why we barely see anything original being made anymore, it’s mostly the usual Superhero fare, the everlasting franchises or the book adaptations. Those come with a loyal audience from the start and diminishes the risks. But it also accounts for a very homogenized and quite boring offer for the movie-goer.
Earlier this week Doug Creutz released a report entitled “Memo to Hollywood: You Can’t All Be Successful Doing the Same Thing”. In it he noted that the numbers suggest we are on a downward shift in theatrical demand and that there’s a clear convergence to nearly identical film franchise strategies at the major studios which risks “damaging the ecology of the business and accelerating already existing negative secular trends.” Tricky business.
Want to know more? Check out this Hollywood Reporter article on the subject.
What’s your take on the future of the tentpole system?