|Posted by Jason on June 11, 2018 at 5:40 AM|
There is a general decline in the movie business, and the future does not look very good. Anyone who says otherwise is probably lying or just ignorant, and there are plenty of reasons to be afraid. First off, it has been about 130 years since Thomas Edison invented the kinetoscope and ushered a revolution in the theatre industry. In the 20th century, the cinema business has been at the forefront of new stars such as Garbo and Rin Tin Tin, Rambo, Commando, and impressed crowds with dangerous sharks and huge dinosaurs. Blockbusters made millions of dollars in revenue and created the most famous movie industry in Hollywood. Nonetheless, there is anxiety among producers, theatre owners, studio executives, and filmmakers alike as the cinema lights begin to flicker.
Presently, Hollywood is struggling to adapt to the changing tastes and demands. Instead of giving in to the existential dreads, studio executives have a chance to experiment more because they simply cannot rely on old franchises. That is particularly important to releasing home movies after a few weeks of theatrical debuts for about $30 per rental. What is appealing about the home release is that it introduces a new distribution and exhibition system since the DVD introduction led to a revolution in home entertainment in the 90's. what's more, with the dwindling theatre debut revenues, it is one way to keep up with the changing customer dynamics.
However, there is a fundamental challenge facing the studios and for some, they are unlikely to survive the current trend in the industry. From studios to agencies to exhibitors, there is little structural innovation. It is a sprawled, slow-moving, and somewhat old-fashioned industry. What most do not realize is that it is time for new movie franchises. Many are entangled in a systematic business adapted to antique business practices. Most major studios lack the ability to innovate and be entrepreneurial. That is proving a challenge as evidenced by the recent failure of Han Solo and another Transformers spin-off movie called Bumblebee. The system in Hollywood is defective and many people are doing things that are counterproductive.
The first major problem facing the industry is that younger and financially able potential customers are more interested in stream-able content that is accessible on their smartphones and tablets. Occasionally they will turn up at the theatres to catch a glimpse on the latest Spiderman movies or watch Star Wars on the big screen but despite that, there is a general trend away from the big screen to the small portable devices and home television systems. As such, there is a need for the industry to recognize that it is time for new movie franchises. As can be seen in the recent growth in cables, it seems that is where the action is headed. More directors are choosing to get into the stream services because they can tell interesting stories there.
A second major problem in the industry is that the financial resilience is dwindling. Increasingly, there are new barriers between Hollywood and sources of capital. Over the years, most investors in the sector have shifted towards Silicon Valley for the promise of riches. Also, there is an increasing number of creative content that costs a lot but ends up as financial losses. For quite some time, the Chinese have propped up the industry with their money, but that seems to be reduced as well. Chinese authorities have increasingly tightened the noose and limited cash inflows into the entertainment industry. The most prominent example is the failed $1 billion acquisition of Dick Clark Productions by Dalian Wanda. There is also a potential backfire of a $1 billion financing of Paramount and two Chinese players, Huahua Media and Shanghai Film Group. What this means is that it doesn't look good.
In fact, most analysts agree that the theatre business has even fewer prospects moving forward, much more than at any time in the last 30 years. The evidence is all over, with superheroes, blockbusters all failing at worrying rates. Too many things are wrong, and that has its dangers. Weaker prospects mean less financing for the sector. It is already happening as investors get scared by the diminishing returns and seek for new investment avenues such as virtual reality and gaming. There are numerous opportunities within the media industry that have better returns than film these days.
However, it is not all sad news as some films have managed to win the hearts of the new age customer. Disney is one exception with Pixar's "Finding Dory" and Marvel's "Captain America: Civil War" being sensational successes. The big hits of recent times include "Deadpool" and "Zootopia", which have driven sales when they debuted in the theatres. What the industry has done to counter the low attendance is increase the price of tickets. 3D, Imax, and other premium formats have saved the industry from the millennials who are avoiding theatres. Worryingly, the movie going individual per capita is at its lowest for nearly a century, and according to Motion Picture Association of America, the last five years have been characterized by a decline in the number of 18- 39-year-old audiences.
The statistics could only mean one thing: that the millennials are not impressed by what is going on in the theatres. The content there is simply not appealing to them. There are also many avenues to seek out ratings especially on social media. The reaction is instant, and if a few people don't like a move, word spreads fast. The current trend in most sectors is focussed on maximizing revenues at all cost. It is a trend that has sought to minimize risk and, in the process, killed creativity. What most directors are doing nowadays is redoing the old stuff and branding it differently. Honestly, it makes no sense to repeat the same kind of content over and over again. When people don't get fresh content, they simply won't show up.
There is a general trend towards niche business because studios are looking to cater to fanboys and therefore mitigate risk. There are new superhero films being released in theatres now more than ever that dive into the comic book canon. About half the domestic revenue of Hollywood films is from frequent moviegoers or those who show up at least once per month. The number of tickets purchased by the fanboys increased by 2.9 million in 2015, but their numbers fell by 3.7 million in the same period. TV and online streaming services have upped their game and now have compelling content to show. In some cases, the shows availed through these channels are of better quality than that of big screens. A few of those insanely popular shows are "24," "Game of Thrones," or "Breaking Bad." There is little in the cineplex to match that kind of impact.
The digital age is giving users more choices to pick from, and the box-office is an embodiment of the perennial problems facing the industry. It has not been able to keep up the pace and offer moviegoers more variety. It seems not clear yet that they cannot rely on old franchises with all the alternatives from Netflix to Pokémon Go. Millennials have so many options besides films such as playing games or streaming music and repetition of similar content at the theatre is abhorrent to them. For more than a decade now, the disaster has been formulating and quite a substantial part of it is self-inflicted. There is a mixture of both greed and fear and a lack of imagination that has led to the evolution of irrelevant business. Out of all the recent big-screen debuts, there has only been one new blockbuster franchise emerging, Illumination's "The Secret Life of Pets," and Warner Bros.' big-budget bet, "Suicide Squad." So, the lack of originality is probably the biggest industry failure.
It is difficult to predict the kind of films that resonate well with the dynamic audiences. Things are changing too fast and trends fade away even before new original content can play in their waves. It is no wonder that modern studios with their obsession with risk mitigation try to safeguard against unpopular tastes. But since there is no way of knowing that, they have embarked on sequels and spinoffs with diminishing revenues. They are not cooking up new chapters in the popular movies, rather they are simply scavenging for popular waste and reviving pieces that no one cares about anymore.
For instance, Fox tried to revive "Independence Day" but the audience was least amused despite having taken the box office by storm 20 years ago. Sony has also been a victim and failed miserably when trying to reinvigorate "Ghostbusters" 30 years after debut. The list does not end there, in fact, there are a number of costly redos in the pipeline such as "Blade Runner," "Ben-Hur," and "Spider-Man." There's also the upcoming "Indiana Jones" film starring a 73-year-old Harrison Ford. What is most evident that filmmakers cannot rely on old franchises is Disney's "Alice in Wonderland." Having grossed over $1 billion in 2010, its follow-up, "Alice Through the Looking Glass" was a big flop. Maybe creative producers will finally hear the audience screaming that it is time for new movie franchises.