Article courtesy of William Dever, Chief Creative Officer at Harena Data Inc
I ask myself constantly why exhibitors continually permit themselves to engage in a business that is so blatantly unfair. I also ask myself what the measures are that exhibitors can engage in that can liberate themselves from an ecosystem that consistently strangles them and restricts their ability to gain profit. I think if you take a careful look at the studio behavior you will come to the conclusion that they are neither insidious or evil…..they are just bone lazy. It is this laziness that is shaping the industry and allowing theatrical exhibition to descend into the doldrums.
When B Movie legend Roger Corman was producing movies, his goal was to receive 30-40% on his investment. Now, most businesses would be ecstatic with a 30% return. For me I would be thrilled if I could take my money and get a consistent 30% return. That’s good and that’s free enterprise. The problem is that we have allowed the business of exhibition to be controlled by a group of financial interests who seem to only want the big payday. They want movies that will move their stock and return multiples on their investment. The problem is that they are putting fewer eggs in their baskets and subjecting theater owners to greater risks. They also are servicing a tumultuous streaming business which is turning out to be full of surprises.
As a result of the new and faulty perspective of the studios, giant swarths of product are being immediately relegated to streaming outlets when before they would have enjoyed a level of theatrical exhibition. Movies like “Home Alone”, “The Hangover ” , “The Rainmaker”, or “The Shawshank Redemption” would not get made today. Instead all resources are being thrown towards comic book movies. There is a deep shrinkage in the production of mid budget movies. Analysts have studied the decline of the mid budget feature length movie and have discovered that horror, thriller, romance, biography, and drama movies all saw substantial declines in their budgets. The studios are just seeing this business as a series of home runs, no first or second base hits….it all has to be home runs or running.
Main image credit: LinkedIn, The Hangover Directed by Tod Phillips