The concerning future of the tentpole Studio strategy

2014 tentpole releases

 

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?

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2 thoughts on “The concerning future of the tentpole Studio strategy

  1. Gregory Strompolos (@STROMPOLOS) says:

    The fan “cults” that have expanded in popularity are a confirmation that Creutz’ theory is true. For example, more people are in love with Freaks and Geeks than they ever were back in what was on air for the first time because fans don’t have anything fresh, unique, and original to admire anymore. So in the absence of new IPs being created, fans are looking back into ones that they may have overlooked when there was still a relatively strong abundance of options. But I’m speaking of a TV series, not a movie, and so maybe that itself is another sign that movies are on the decline. How many people walk in to the office and talk about new movie releases? The number is low in comparison to all the chatter around new series (e.g. GOT, HOC, all the new Amazon stuff, etc.).

    Nice post Natália. Keep em coming.

    Liked by 1 person

    • Natalia H.V. Justino says:

      Hey Greg, thanks for commenting. Indeed series have been stealing the spotlight for a while now. In general, TV has more freedom to pursue niche content since it’s cheaper to produce and a show can be cancelled at any time. The stakes are much higher in film. Because of the larger availability of interesting characters we’ve also been seeing huge movie stars flock to TV which adds immensely to the final quality of what we see. There is a growing trend though of tv shows becoming more expensive to make, as is the case with House of Cards whose budget for the first two season was in the $100 million-plus range. It will be interesting to see what the financial strategy becomes for these big shows and how audiences react but so far it’s looking good!

      Like

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