No, The Blockbuster Movie Isn't Dead

from the it's-got-plenty-of-life dept

Cory Doctorow, who can often write and speak quite convincingly concerning copyright issues, has written a new article for The Guardian in the UK that is unfortunately unconvincing. The discussion surrounds the question that has been asked of me in the past when discussing copyrights and movies: if there were no copyrights, how does the $200 million blockbuster movie get made? Cory's answer is that it doesn't get made... and that's okay. His argument is, effectively, that there's a tradeoff. And, instead of a few $300 million blockbusters (inflation, apparently, has driven up the price), we'll get many more smaller, independent films or amateur creators creating their own works. In other words, the long tail takes over and the "short head" disappears. He has some well known company, by the way. As we've mentioned, George Lucas seems to believe the era of the $200 million blockbuster is over. To Cory (and to many others, I'm sure) the idea that there would be more, cheaper indie films and less Hollywood blockbusters, seems like a worthy tradeoff. I have no opinion on whether one scenario is better than the other or if it's a worthwhile tradeoff. I don't think there's really any tradeoff to deal with at all. In fact, from everything I've seen, the blockbusters can still stick around without freakishly worrying about copyright -- and you'll still get more of the quirky independent films. In other words, everyone wins (and yet, I'm quite sure the big movie industry folks who frequent this site will insist what I'm describing means the death of their films).

First of all, it's important to separate out the $200 million (or $300 million) part from the "blockbuster" part. I have a problem with anyone phrasing the question in terms of the requirements on the cost side. First of all, studies have shown that while the biggest costs for most of those blockbuster movies is the fees paid out to the name-brand stars, those stars don't help a movie do any better. In other words, movie makers are overpaying for stars. That shouldn't be a surprise, actually. When you come from a world where "$200 million" is automatically attached to "blockbuster" there's little reason to think about ways to make a movie more efficiently. You just think about driving up the budget so that the movie is considered a blockbuster because of how much is spent. This doesn't mean, by the way, that you don't hire stars. You just figure out ways to pay them more reasonable rates. At the same time, in just about every other part of the creativity world, the cost of making content is decreasing. Better tools and technologies are making it much cheaper to make much higher quality movies every day. So really what we have is a situation where adding a little competition to the market doesn't mean that the blockbuster, super high quality flicks go away -- but that perhaps they get a little more dollar conscious on the spend side, allowing them to make movies more intelligently to save money. We had hoped that with Wall Street's new found interest in investing in films, that perhaps they would force some of this to happen.

At the same time, there are still plenty of ways for big, expensive movies to make a ton of money -- even if the focus isn't on copyright. It just requires a shift in thinking. We've been saying it for years, for example, but the movie industry has never really relied on the sale of its content to make money before. It thinks it has, but it's always been selling a combined service with the theaters. It's been selling the "experience" of going out to the theater and having a good time with dates, friends or family and getting to watch a new flick on a big screen in comfy seats and a great sound system. It's only more recently, with much of the industry being confused about what they're actually selling, that the movie going experience has declined -- which is a hurting the industry much more than a few downloads ever will. So even if you were in a world without any copyright, there would still be demand for people to go out to watch movies in the theaters -- and the movie industry can continue to make an awful lot of money that way. The restaurant business isn't suffering from the fact that people can cook much cheaper food at home. People like to go out and have a good time -- and they're willing to pay for it.

Furthermore, there are a ton of interesting business models that you can start to build on top of this. These include doing things like selling a DVD with a bunch of extras of the movie people just saw as they leave the theater. That's the point at which they're going to be most interested (assuming they liked the movie) and if the DVD comes with a ton of extras in a useful format and a convenient interface, that's going to be worth buying -- even if they could download the content for free online. Or you could start to include other incentives. Since sequels are so popular these days, why not offer a discount on admission to folks who have the movie stub from the first movie in the series? Or offering a contest where a ticketstub or DVD purchase receipt gets you entered into a raffle to be an extra on another film? These are small examples, but it doesn't take long to come up with a hundred more examples, where the focus is on providing additional value that people will pay for -- even if the content itself is available for free. When you start to look at those models, and start to put a few of them together, you begin to realize that there are more ways than ever to make a lot of money in the movie business, even if copyrights are not an issue at all.

Finally, long tail markets don't exist in a vacuum. They follow the power law curve, meaning that there will remain blockbusters -- it's just that the bottom part of the market does open up for many more producers to enter with more niche-focused content. However, demand will still remain for blockbusters, and that's great. With the demand there, smart business people will start to adopt the business models that allow those people to be satisfied with the next big blockbuster flick. And, don't underestimate other sources of funding films as well. BMW realized that it made sense to make short films a few years back, without worrying too much about monetizing those films directly. Don't think they (or others) couldn't do the same for much larger films as well. So, yes, blockbusters will remain -- though the business models to support them may start to look a little different.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Monarch, Oct 26th, 2007 @ 7:32am

    Wow Mike!
    I wish the movie studio execs would read this article! Some of the incentives offered in your article just might get me to buy a movie theater ticket again, if they were actually put into place.
    Why can't the entertainment companies come up with incentives for their products? Especially for those of us who have been disheartened by the same old, same old.
    It's like this, I really want to see "30 Days of Night" because I love vampire movies, but of course I won't see it in the theater. Why, because I can't stand going to movie theaters. So, do I download a pathetic torrent of the movie that may be low quality, or do I wait for the DVD that if I don't buy the week it comes out it will be overpriced the next week. Hmmm, tough decision there.

     

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    RandomThoughts, Oct 26th, 2007 @ 7:44am

    Ummm, I think both the original article and Mike miss the true issue. A blockbuster isn't based on how much it cost to produce. A blockbuster is based on how much revenue it brings in.

    Moving to drugs, Lipitor is a blockbuster drug because it brings in more than a billion dollars, not how much it cost to bring it to market.

    High priced productions of movies that don't make money are not called blockbusters, they are called flops.

     

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  3.  
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    Ajax 4Hire, Oct 26th, 2007 @ 7:48am

    I love going to movie theaters..

    Some of the best Movies are not the $high$ productions. These are the diamond in the rough. When you find these gems it renews your faith in Production Studios.

     

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  4.  
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    Danny, Oct 26th, 2007 @ 7:49am

    I certainly agree about the point of hiring big name talent for films. In the past if you had the formula of big budget + big effects + big talent (for their time mind you)you were almost certain to have a big hit with precious few exceptions. These days you can still make a big hit movie but you just cannot depend that old formula anymore.

     

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  5.  
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    Barrenwaste, Oct 26th, 2007 @ 8:01am

    Greed. Plain and simple, greed. Libraries have not hurt the authors whose books they carry, I can't see some downloads hurting the movie industry. The prices paid to make a movie are already far beyond reason. How can you justify paying an actor that much for two hours of entertainment while paying our soldiers so little to risk thier lives protecting you? Or our firefighters, most of whom are volunteer in my neck of the woods. It's insanity. Entertainment is important, bored societies quickly become violent societies, but it's not that important.

    I'd love to see some incentives at the theater. That said, I rarely make it to the theater. It costs to much. Between the fuel to get there, the refreshments, and the price of admission you end up spending 15 to 20 dollars to go alone. Double that if I'm paying for a date to come as well. Doesn't sound like much, but when taken in perspective, it is only two hours of entertainment, it's outrageous. That's half what I spend for gas, smokes, and pop over an entire week. I'd rather spend a couple bucks at the rental place and watch it on my perfectly adequate home theater. Especially since it isn't considered bad manners to do a bit of necking with a lovely lady at home.

     

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  6.  
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    ehrichweiss, Oct 26th, 2007 @ 8:07am

    Re:

    You're missing the point of the article because you want to argue semantics so how about instead of "blockbuster movie" we use the term "high production cost movie". That's what the studios are saying they won't be able to produce.

     

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  7.  
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    Overcast, Oct 26th, 2007 @ 8:09am

    George Lucas seems to believe the era of the $200 million blockbuster is over.

    If it is, it's because of the garbage Hollywood tries to pass of as 'entertainment' now.

     

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  8.  
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    Wolfger, Oct 26th, 2007 @ 8:19am

    Here it is:

    You want the correlation between "$200 million" and "blockbuster"? The secret link is that once the studio commits to a ridiculously high priced film, it's not shy about spending money on advertising and promotion. People get worked into a frenzy, and rush out to see the movie on opening weekend, and whether the movie is good or bad really has no relation to how much money it makes that first weekend. Opening weekend is all a measure of "how well did we hype this product?" So, yeah. $200-million movies are blockbusters, even if(when) they're crap.

     

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  9.  
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    Anonymous Coward, Oct 26th, 2007 @ 8:29am

    I go to a lot of movies. I simply love the theater experience. I like the roar of laughter of the crowd without canned laugh tracks. I like seeing a hundred people cheer whenever the "Lucas Films" or whatever starts to disappear from the screen and the opening credits roll. And believe it or not, I love shout outs from the crowd. I'm not talking about the guy talking on the cell phone, or the guy who talks through the whole movie, no. What I'm talking about is the one guy(actually normally a girl), who can't contain themselves during a climactic or obviously fan moment, and says a one worder, or a one liner while the whole theater is silent, which causes everyone in the house to burst out laughing. I love those moments. And because of that, the theater will never die for me as a viable means of entertainment. Sure, many times I go and I don't get any of that, worse; I get an annoying crowd who talks, lets a cell ring, what have you. But when everything comes together.. the right movie, with the right audience. Then its an experience that doesn't exist anywhere else, and is unique to the movies.

     

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  10.  
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    Cotton-Eyed Joe, Oct 26th, 2007 @ 8:41am

    Re:

    Ummm, RTFA

    First of all, it's important to separate out the $200 million (or $300 million) part from the "blockbuster" part.

     

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  11.  
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    Anonymous Coward, Oct 26th, 2007 @ 8:58am

    Re:

    The experience can be very fun. Your example reminds me of when I saw Star Wars Episode 2 at the theater. Right after Obi Wan and Anakin chased the bounty hunter to into bar Obi Wan says to Anakin, "You're going to be the death of me." I laughed out loud at that comment and started a chain reaction that led to about half the audience laughing.

     

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  12.  
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    Tom, Oct 26th, 2007 @ 9:07am

    The Money that Movies Make

    I seem to remember that theaters don't make any money on showing the movie (sorry, selling tickets to movies). They make money on the $30 box of popcorn and the $30 cup of soda.

    I personally have stopped going out to see movies. At a realistic $20 for two tickets and another $20 for popcorn and soda, it's more cost effective to buy the DVD and pay $2 for popcorn and $1.20 for two cans of soda. Then I save myself 20 minutes finding a parking spot, 20 minutes in line for the ticket, 30 minutes in line for getting a seat, and another 20 minute walk back out to the car. Add in the 120 minutes of promos, commercials (gosh I thought I paid to see this movie), charitable donation pitches, and finally the movie, and it is a good 4 hour ordeal. And, I only get to see it once (ever miss part running to the bathroom?). Nope, one $20 DVD is a much better deal for me. Especially with the kid since he will watch it over and over and over and over again and still enjoy it each time. Plus, if a phone rings I can stop the movie (cause it's for me) and there are no rude people at my home theater (or at least they are only ever invited once).

    Sorry, the theater experience has been ruined for me. It's just not enjoyable anymore.

     

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  13.  
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    2gravey, Oct 26th, 2007 @ 9:09am

    Blockbuster?

    I don't see what the article has to do with Blockbuster Video being dead or not.

     

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  14.  
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    Comboman, Oct 26th, 2007 @ 9:35am

    How?

    So even if you were in a world without any copyright, there would still be demand for people to go out to watch movies in the theaters -- and the movie industry can continue to make an awful lot of money that way.

    The movie theater industry would still make money in a world without copyrights, but I fail to see how the movie production industry would make money. Without copyrights, the theater owner could download the movie and show it in the theater without paying the studio.

     

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    4-80-sicks, Oct 26th, 2007 @ 10:05am

    Re: #13

    Blockbuster movie /= Blockbuster Video, ya goof

     

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  16.  
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    Killer_Tofu (profile), Oct 26th, 2007 @ 10:32am

    For Mike & More

    Comment 1: Those are some good incentive ideas to get people to go to the movies.
    For the idea of discounts on sequels, they try to do this sometimes when the sequel is coming out (they did it with Bourne Ultimatum and many many others).
    The problem here is, if I love a movie, and buy the DVD when it comes out, I am ALWAYS left out of this.
    Not fair.
    They should include the discounts initially saying that it can be used IF they make a sequel. That way, everybody who buys it, not just those who get a DVD right before the release of the sequel will get to enjoy a discount.

    Comment 2: I would like the idea of those niche market targeted movies to come back. We could use some new good sci-fi movies since their quantity has been steadily declining. Was it tech dirt who did an article on this a few months back, or did I read that one on wired? I think it was on wired.

    Comment #3: Actors & Actresses do get paid too much. There are tons of people who can act just as good as many of them, and would do it for far far less. As has been pointed to, using big names actors doesn't necessarily make a movie any better.

    Comment 4: This isn't about the main article, but in general. I have said it before. We do not need previews or advertisements in ANY way on the DVDs we buy. Maybe if they were added as an additional menu selection, that would be okay. But putting them before a movie or the menu on a DVD is pointless, as they will be irrelevant about 6 months down the road.

    Comment 5: Along those same lines, that is one part that I love about going to theatres. The previews. Advertisements suck hard, but previews are awesome. I like seeing the preview on a large screen. For the previews for Matrix Reloaded, Star Wars Ep 3 (mainly when you see Vader rise, even though he ended up being such a small part =( ), Spiderman 3 (esp when I first saw Venom was involved), those previews gave me chills. Such awesomeness. But yah, ads before movies suck. They are okay ONLY in that spot where you got there so early you are waiting for the previews. Have ads during the preview section ruins the feeling.


    Comment about local establishment: There is a movie theatre that is approaching 1 year old by me. It is about 4 - 5 miles away. They are currently building an IMAX addition (freaking awesome to be so close to one, and its going to be BIG judging by the size of addition there). It is an NCG Movie theatre. (ncgmovies.com) Every Sunday they have any show before Noon only costs 4$ per ticket. That is freaking awesome. It is pretty much the only time I go to see a movie now. Between it being so close, costing so little, and me not buying drinks or snacks, going to the movies costs about 5$ right now, unless I am taking a lady friend, then its 9$. If she wants a snack, she can buy it herself =P
    But, that incentive is definitely enough to get me to go see a movie.

    One last comment: I also recall hearing that the movie theatres make no money on ticket sales for the most part. Don't remember where from though.

     

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  17.  
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    Sean, Oct 26th, 2007 @ 10:40am

    Re:

    "or do I wait for the DVD that if I don't buy the week it comes out it will be overpriced the next "

    Rent it.

     

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  18.  
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    Mike (profile), Oct 26th, 2007 @ 11:53am

    Re:

    Ummm, I think both the original article and Mike miss the true issue. A blockbuster isn't based on how much it cost to produce. A blockbuster is based on how much revenue it brings in.

    Ummmm... that *was* the point I was trying to make. Obviously not well enough... But that's what the whole second paragraph is about.

     

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  19.  
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    Max Powers at http://ConsumerFight.com, Oct 26th, 2007 @ 12:50pm

    Movie Experience Will Never Die

    Regardless of the cost, people will continue to enjoy the movie experience. Look at the parking lot of any theatre on Fri., Sat., or Sun.

    Nothing at home can replace the movie going experience.

    My wife works for AMC theatres at the concession stand and the average transaction is about $30. Add the tickets and that's about $50 for two people.

    I also agree there are many opportunities to make more money for the studio's through creative marketing.

    The studio's paid these actors these huge prices and now they have to deal with it. Notice how small independent productions are luring big name actors to their movies lately?

     

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  20.  
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    Anonymous Coward, Oct 26th, 2007 @ 3:07pm

    Clearly you'd love to be right, but saying things over and over again for years doesn't make them right or even far sighted, and the views you are railing against have a certain cogency.

     

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  21.  
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    Michael Long, Oct 27th, 2007 @ 2:09am

    Loophole

    So even if there were no copyrights, people would still pay to go to a theater?

    Umm... okay. But if there are no copyrights, what's stopping theaters from just ripping off the studios with the first copy they can find? Especially as we move into the digital-delivery DLP-projector era where the first copy is as good as the original?

    Or will we devolve to the point where a given theater chain will only show films that happen to be produced by the single studio that owns them?

    Which still doesn't stop a discount chain from snagging a copy and selling tickets for half off. Seems like a chain can make a LOT of money once they no longer have to pay for the product they sell.

    Wait. Wait. I know. We can pass laws that make stealing copy-written works illegal! That way the studio can get paid for...

    Hey! Wait a minute!

     

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  22.  
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    Anonymous Coward, Oct 27th, 2007 @ 7:35am

    Re: Movie Experience Will Never Die

    "Nothing at home can replace the movie going experience."

    The above statement is way too general. While it clearly applies to you and no doubt others it does NOT apply to me and many other people.

    I find the whole movie going experience to be very boring, and anti-social (read stuck in a crappy dark room where you can't talk to or sociliase with others). I get my socialising else where and enjoy it a great deal more.

    If I want to watch a movie I'll rent it and watch it on TV. Much more enjoyable.

     

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  23.  
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    Anonymous Coward, Oct 27th, 2007 @ 2:09pm

    Re: Re:

    But that's what the whole second paragraph is about.

    Not in RandomThought's world. There, words have whatever meaning he assigns them.

     

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  24.  
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    Anonymous Coward, Oct 27th, 2007 @ 2:37pm

    The restaurant business

    The restaurant business isn't suffering from the fact that people can cook much cheaper food at home.
    Sure it is. They haven't ceased to exist, but they could be doing much better and, sadly, a lot of people are getting out of the business. Cooks and waiters generally don't make anywher near the kind of money that movie directors and actors do and they should. Now imagine for a minute if food "sharing" was illegal. In other words, meals put together from ingredients you purchased from someone else (think "derivative works") could not be legally shared with someone else and you could only feed your family with food you grew yourself. Imagine how much more popular restaurants would be then! Now compare this to how the movie industry is doing with protections. So, compared to how it could be doing with government protection, the restaurant business certainly is suffering. Obviously, we need more government protections, not less! In fact, why can't we all live like movie stars with the right protections?

     

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  25.  
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    Christopher J. Carlson, Oct 28th, 2007 @ 8:16am

    Yes, theatres themselves get a terrible deal when it comes to ticket sales, which is indeed why the food and drink cost so much. (And why I always buy at least a drink.) Unless a movie is a sure bet to bring in a full house in its first weekend, my local theatre often waits a week to a month before bringing a movie in, since the percentage of ticket sales they get compared to what the studios get increases as the weeks go by. On opening weekend, the percentage is terribly low. And it really rubs me the wrong way. Especially when a film ends up making hundreds of millions, and my local theatre can barely keep its doors open. Anyhoo...

     

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  26.  
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    Anonymous Coward, Oct 29th, 2007 @ 9:12pm

    Re:

    Yes, theatres themselves get a terrible deal when it comes to ticket sales, which is indeed why the food and drink cost so much. (And why I always buy at least a drink.)

    Will you send me some money or do you only believe in corporate welfare?

     

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