George Lucas and Steven Spielberg aren’t so bullish on the future of the film industry. At a talk at USC, the pair agreed that it’s on track to have a “massive implosion”. At the core of their argument: there just isn’t enough time in the day for consumers to support all the films released in theaters. Films are competing with all the content and options that the Internet provides.
Studios in Hollywood are the equivalent of venture capital firms of Silicon Valley. They live and die on the homeruns. Each movie could be thought of as a startup. It all starts with an idea and grows into a team that creates and releases some piece of content out into the world where it’s loved or hated. When loved, you get Christopher Nolan’s Batman, and when it’s hated, you get any Ben Affleck movie from 2000 – 2010.
The summer is filled with the biggest bets. The cost to produce and market a single film these days can balloon to over $300 million. The studios need a film to pull in nearly a billion in box office revenue, the same on DVD and have a good, multi-year sale to television for it to be considered a success. Sprinkle in some airplane viewing rights and that’s a win for them.
Lucas and Spielberg don’t think that’s a sustainable model. Soon, a couple of those megabudget films are going to nosedive, and everything will change.
They suggest the marketplace will contract because there isn’t enough time in the week for us to go to the movies anymore. With Netflix producing top quality content, and video games cutting into weekends, it leaves little room for date night out at the cineplex. It’s getting so bad that Lucas complains about how hard it is even for him to get a film in a theater. This should probably make producers of films nervous.
The duo says that the studios will be forced to reevaluate how to distribute films. Perhaps a film like Lincoln will cost less to see than, say Iron Man? Or perhaps, we don’t even get movies like Lincoln in theaters anymore. They will come straight to our homes. And actually going to the theater? It’s going to change to a model where a movie will cost $50+, but it’ll become a more high end experience with movies staying in the theater for a year or more. Or, just don’t make shitty films.
For over a decade, the films that can’t find an audience in the theater have found their niche on the internet where they can be marketed and sold on iTunes to those who will love them. Companies like Netflix and Hulu are able to focus on these niches and program specifically for them, for much cheaper than the $300 million it cost to release a summer film.
That translates to these Internet companies being able to take bigger risks on content, similar to HBO’s model. And technology winning.
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Image via Francesco Dazzi