Written by Books

Blockbusters and Sleepless In Hollywood

If it feels to you, as it does to me, that there are an ever greater number of superhero and other franchise films clogging up cinemas, then you’d be right.

And these two books explain pretty well between them what’s happening in Hollywood and beyond. Indeed, it’s the “beyond” that is really driving this.

Blockbusters actually only starts with Hollywood. It also covers music (with Lady Gaga), football (with Real Madrid), the Met Opera, Major League Baseball, and many others. Anita Elberse is from Harvard Business School, and has obviously spent a certain amount of time around a great deal of entertainment industries examining what’s happening.

In summary, she argues that the “blockbuster” strategy is working for many in these fields. It’s easiest to examine in the film business where once upon a time, a studio would invest in variety of films at different scales. But Elberse argues that because the profits are so huge from the blockbuster sized films, that other parts of the business become almost irrelevant.

She acknowledges, in passing, that she’s not making any kind of qualitative judgement – she’s just giving you the facts. Blockbusters has plenty of charts to make the case strongly.

She also dismantles the “long tail” theory, examining several markets to show that investing big in big artists or movies returns that vast majority of profit.

Her case study is Warner Brothers, who she says first jumped on the blockbuster strategy before any other studio. With massively successful franchises like Harry Potter and the Dark Knight trilogy, they undoubtedly profited enormously.

But if there’s a fundamental flaw with the book, I don’t think that Elberse has properly examined what happens when everyone adopts that same approach. It’s one thing if only Warners are doing it, but it’s another completely if every studio is churning out $200m epics. We already see massive clogging up of screens around popular periods, with one massive film opening the week after another. There is saturation marketing around these massive gambles, and it becomes harder and harder to get cut through.

A few blockbusters – yes. But I’m not sure it scales up. At the moment Disney/Marvel can do no wrong. But that lucky streak is bound to come to an end.

And in some respects, the book is already out of date. Lady Gaga’s album releases are held up as great examples of the blockbuster strategy. Not only are enormously complex marketing plans put into action, but there are elaborate partnerships with other brands and retail outlets to ensure that everyone can buy a copy of her new album.

And yet what happens just before Christmas? Beyoncé – arguably even bigger than Gaga right now – releases her new album with no notice at all. No marketing. No partnerships (well new ones anyway – obviously she does have partnerships with Pepsi et al). Fans create the hype. Result: millions of albums are sold.

While the blockbuster strategy clearly still does have a place in the market, it doesn’t obviously explain how you build big stars. Yes there’s an acknowledgement that a certain proportion of superheroes are relative unknowns because you build them alongside the franchise, keeping costs down at the same time – unless your name is Robert Downey Jnr anyway. But how do you create the next Gaga if it’s all about blockbusters?

Lynda Obst is a Hollywood producer who’s largely worked putting together female focused romcoms. Nope – they’re not my favourite films. But they’ve historically found a niche and done well. In a breathless, gossipy way, she takes us through what she colds the “Old Abnormal” and the “New Abnormal” – the old and new rules that Hollywood plays by. “Abnormal” – because everything in Hollywood is.

She deftly explains the financing of these films, and you begin to learn a lot. Once upon a time, a studio might have put a balance sheet together when funding a film, and reckoned on 50% of revenues coming from DVD. That’s just fallen away enormously. Obst reports someone saying that today they’ve no idea what revenues that will get them. Think about it. You’re planning a big epic that will open in 2016 and be in homes when? Christmas 2016? Will we be buying shiny discs? Renting from iTunes? Expecting it to be in our £5.99 a month Netflix subscriptions? What?

So a massive chunk of revenue has dropped out of the market. But they’re still making $200m bets on superheroes and giant robots. That’s because upwards of 70% of revenues is now international. That is, non-US. And the big markets opening up are in places like China and Russia. They’re getting loads of 3D and IMAX screens, and they want to see big robots battling it out on those screens.

Well they may want to see those films in China and Russia, but I don’t. But I understand from both these books why the studios make them. What’s not clear to me is that why it has to be Hollywood that makes them. Obst says a couple of times that only Hollywood has the skills to do that, but I really don’t buy that. Sure – Hollywood has a head start. And most of the world still equates Hollywood with glamour. But the effects are actually created with standard software. FX houses are based all over the world, and it’s not at all unlikely that big Chinese language action films could be made locally and be far more successful. As Obst does say – China is fickle in how many films it lets enter the country, and what the revenue share is anyway. It’s even hard to choose when your film opens (they made Batman and Spiderman open against one other to both studios’ chagrin).

The book does jump around a bit. She names names, but they mostly lovely people. Well, she’s still working there, currently producing Helix for SyFy. And she paints herself as sometimes a little bit more out of the loop than she can possibly be. So we get lots of interviews-cum-guidance from players in the market, often at named LA restaurants.

And I don’t agree with all the conclusions that Obst makes.

She paints the 2007/8 writers’ strike as a critical time and something that fundamentally changed everything. I’m not sure that’s true. I think things were changing anyway.

And the same films get mentioned again and again as great. But sorry – successful does not equal good. The Hangover – I’m looking at you.

But this book is bang up to date, with only a few of the big 2013 summer failures missing. The importance of television is also covered. Partly one suspects, because Obst’s own career has switched from films to television, but also because that’s where the creativity is today.

And the really scary thing is that TV makes way more money for the studios than films do.

And the most soul-destroying thing she says in the book, aside from the rampant growth of dumb-films made to appeal to an unsophisticated Russian and Chinese audience? The fact that Hollywood considers there to be two age demographics: Under 25s, and 25+! No wonder TV is leaving them behind.

[Update] This piece from Forbes suggests that 27 “blockbusters” will be released in 2015. So a lot of films are going to fail then.