The Film Industry: In Good Health Or Bad?

In a recent interview with a journalist, I was asked about my thoughts on the state of the film industry. I have seen a growing concern both inside the industry and out about a wide variety of issues. This includes the ongoing windows debate and how the distribution model is being debated, prodded, poked and challenged. It includes concern from exhibitors around driving increased footfall into their real estate. It includes the ever growing concern from distributors around piracy. And many cineastes challenge the existing franchise model and the lack of perceived quality.

There are unquestionably challenges ahead, many of which are outlined in my previous post ‘5 Areas Of Focus’ https://www.dhirubhai.net/pulse/film-industry-2015-5-areas-focus-adam-rubins?trk=mp-reader-card. From a content perspective, I believe we are not quite in a golden era, but not far off. You only have to look at some of the quality original product presented at this years Academy Awards (Boyhood, Whiplash, Birdman, The Grand Budapest Hotel) to see that whilst there will always be a focus on commercialising movies, there will always be artists committed to telling quality and original stories.

Below is the recent interview I gave - please feel free to challenge or question. Only through debate, risk taking and learning will we see the industry we love move forward….

1) We only read about decline in cinema audiences. How do you feel attendances have held up over the past decade?

If you look at Europe as a whole we are not seeing an incremental decline. We are looking at a flat market that's reached its saturation point of screens. In fact, the 1% slump we saw in 2013 was the UK’s first in 10 years. So the up and down nature of the market is primarily driven by the film slate which is and always has been a cyclical model of good and bad years. China's widely reported and quite dramatic increase for example has been organic through extensive screen growth to cater for the demand and yet they still only have 20,000 screens in a 133,000 screen capacity market.

2) Is 2015 expected to be cinema's biggest box office year yet?

Yes driven by the franchise nature of the business and the presence of some of its biggest ambassadors. This year we have an Avengers, a Star Wars, a Bond, a Jurassic World, a Fast and Furious, a Terminator, a Minions and a Mission Impossible. The only thing it's missing is a Transformers and an Avatar. Another box office driver is animation. Last year, we saw 7 big animated releases. This year there are around 10. With the growth of China in both its home grown product and the 34 international titles that will get a release this year, we can expect a good year for film in terms of box office admissions.

3) How wide is the split - in budget and profit terms - between the very big blockbusters and the smaller, independent films?

The scale is extreme if you take a big blockbuster to mean a franchise (a product with existing equity) and an independent to mean a stand alone original story. A blockbuster like Transformers: Age Of Extinction can cost in the ballpark of $200m whereas an independent like Boyhood is more in the region of $5m. The interesting and most relevant question in today’s market is more around profit. Spiralling marketing costs and a higher volume of competition has increased the amount of risk for blockbusters and made it harder for independent product to make itself heard. But profit for a franchise isn't just about monies made in the theatrical window. The vast majority of profits Disney make, for example, are in media networks, consumer products and theme parks meaning the film itself is just a shop front, or advert for ancillary revenue streams. Independent movies live or die on screen due to the decline of the home entertainment market so other viable distribution strategies such as VOD are being explored.

4) In terms of marketing and PR, is 2015 the easiest yet for the business?

Most definitely not! More complex absolutely. Marketing and PR is experiencing a revolution in the film business the likes of which haven't been seen since the introduction of the blockbuster in the late 70's. For the last 40 years, the marketing model has been about generating awareness through high cost traditional media buying. Of course it's still about awareness but there are now more platforms, more direct channels through which you can converse with your audience and more focus on converting existing awareness into ticket sales. Buying media is relatively easy, but now the model is moving away from high cost blanket coverage, marketing to a micro targeted audience is becoming more challenging. Fortunately now, we have more data to support more efficient and effective investment of marketing dollars and the likes of social media has embraced the value of content be it an official asset like a trailer, or a piece of user generated content which can be equally engaging, if not more. The simple question is, if only 4 million people are going to see your movie in the UK, why waste money marketing it to 40 million?

5) How do you bring new viewers to old franchises?

By finding the universal truths and commonalities that appealed to audiences in the first place and making them more relevant to today's audience. 21 Jump St for example is an old franchise, but the movie was made with younger audiences in mind, and the marketing campaign that supported it understood who its audience was and how to reach them effectively. This year we will see ‘older franchises’ like Terminator and Mission Impossible looking to re-engage its existing audience and open up to a wider core cinema going audience.

6) As a cinema fan, does the lack of originality bother you?

This, for me, is overblown. I rarely see the same conversations in other forms of popular culture such as music or gaming, yet there is still an overwhelming amount of quality original product be it on the blockbuster scale (Gravity and Interstellar for example) and especially in the independent sector where Boyhood and Whiplash are my personal favourite films of last year. If the argument is, does the success of the franchise bother me, the answer is a resounding no. Audiences vote with their feet and we have to look at blockbusters through the eyes of the audience its intended for. I only hear cineastes and critics complaining, not general audiences.

7) We are told this is a golden age for TV. What sort of age is this for cinema?

It is certainly a golden age for TV as a lot of creative talent (from writers to directors to heavyweight actors) have migrated across to this medium. Its an opportunity for writers and directors to be noticed and its a breeding ground for future film talent. The film business itself is unquestionably moving further towards the franchise model driven by studios who are investing in lower risk higher cost properties with in built audiences or opening up their libraries to re-launch franchises of old to a new generation of cinema goers. Given the distribution model is changing due to piracy and other revenue streams dissipating, it makes sense for studios to consider how to best commercialise content and leverage that content's potential across other ancillary revenue streams. Where does this leave the independents? Fighting for screen time, challenging the existing high cost (and increasingly ineffective) marketing model and considering alternative routes to market for their product.