From a distance, the Hollywood sign has never shone brighter.
The box office will hit record numbers this year and television continues to be a cash cow. Yet, a digital economy that roiled the industry continues to sweep away old business models. In some cases, these newer forms of distribution and production are leading to more creativity and innovation. Often, they also mean less money to go around.
To make sense of the technological, artistic and financial disruptions, TheWrap spoke with nine of entertainment’s sharpest thinkers, including Brian Robbins, the CEO and founder of AwesomenessTV (which he sold to DreamWorks Animation), and Bob Greenblatt, the NBC Entertainment chairman who proved with “The Sound of Music” that Broadway can work on broadcast.
Others we spoke to include Paul Presburger, whose Pantelion Films demonstrated the strength of the Latino movie market when its “Instructions Not Included” broke out, and Michele Turnure-Salleo, whose work with the San Francisco Film Society ensured that challenging films such as “Short Term 12” and “Fruitvale Station” saw the light of day.
It’s no longer enough to make a great TV show or a great movie. You need to build a brand. For 20 years, I made a show and then a movie and then another show. It was about individual pieces of content. In building AwesomenessTV, we tried to build a brand teens and tweens will gravitate towards.
If you look at cable TV, CNN and ESPN are brands. They didn’t have a lot of money to make programming when they first started, so they acquired projects and made low-cost programming. Now they are two of the most profitable and beloved brands across the world.
The same thing is possible in the YouTube ecosystem. You can shoot a show for a fraction of what it cost those guys 10 and 20 years ago, and you can release it online and on the myriad devices my kids and other young people are using. Better yet, you can talk to your audience. YouTube is not just a video platform. It’s a social platform as well, and traditional media companies are starting to understand the value of a two-way conversation.
Because younger audiences are watching video in so many different places, you need to build a business beyond YouTube as well. YouTube is a primary outlet and an audience funnel, but you want to package your shows and characters to be seen on every device and in every country.
I don’t think I’m going to be developing any more $55-million comedies, but we can take a popular character like “Fred” and turn it into a TV show or a movie for a whole lot less – and do that again and again and again.
I rarely think about the industry because I’m so consumed with my own side of the world. But I think at least in the broadcast space, we have to do more programming that feels like an event.
Whether it’s a scripted show like “The Blacklist” — I think we’ve done a really good job of making every episode of “Blacklist” feel like something you cannot miss — [or] doing live events — or just events, whether they’re live or not — like ‘The Sound of Music’… things that feel special and important and like you can’t miss.
“The Voice” is a great example. Whether the episodes are live or not we’ve tried to make that show feel like something that you have to watch. Clearly football and live sports do that already. We have our fair share of that.
But I think it’s just about, how do we make every episode, every night, feel like: You can’t miss the show. It’s easier obviously with the Super Bowl, the Academy Awards, the Golden Globes. But that’s our focus.
You cannot pull a fast one on moviegoers. They’re too savvy, they’re too connected. They’re watching trailers, they’re debating things on social media.
The business is being driven by avid moviegoers, which means 15 percent of people are making up 85 percent of the business. Their decisions about what films they want to see are being made months and months in advance. They can tell how committed a studio is to a particular movie, and if they feel that commitment is lacking in any way, that can be trouble. But if a studio is clearly behind a movie, as they were with “Gravity,” “Dallas Buyers Club,” “The Butler” and “Frozen,” that can be the defining factor for audiences. It allows them to decide if this movie is legitimate or if they’re just being marketed to.
Nothing can replace word-of-mouth. Not a television commercial, not a poster and not an online ad. I was in Japan and the pre-sales on “Gravity” were not particularly strong, and people kept asking me, “what’s wrong?” And I remember saying, “Just wait, it’s going to play like gangbusters.” That’s exactly what it did and it was fueled by the sense of discovery that Japanese moviegoers felt.
Steven Spielberg is the success that he is today because of his ability to foresee what’s in front of us and his comments that the movie business is undergoing a sea change and the mid-level movies are going to have difficulties feels right on. Those big movies, like “Gravity” and “The Hobbit,” people still want to see them communally on a giant screen and the indie movies have a built-in audience, but that mid-level movie, that’s not as thought provoking or as intellectually nourishing, is going to have a rough time. Those projects are headed to TV.
There are more Latinos in the U.S. than there are Spaniards in Spain. It’s a huge market, if we could call it one market.
The Latino audience is not underserved, they’re just underrepresented in movies. They go to theaters more than other minority groups. But the movies that have been typically geared to them are art house releases that are not commercial. They want universal stories, not films that are all about the struggles of immigrants. They want aspirational stories. If you look at “Instructions Not Included,” there’s nothing particularly Latino about the story, beyond that it happens to be in Spanish. It’s really about a relationship between a father and a daughter and the struggle that he goes through to keep his child. Anyone can relate to that.
Or look at “The Fast & the Furious.” It works because they have Latino faces and talent like Michelle Rodriguez and car culture is strong with Latinos. They love action movies. They’re going to go to those anyway, but the studio was brilliant in tapping into that segment of the population so they really turned out.
The Latino market is not monolithic, so people have failed when they’ve tried to target a movie as “Latino.” When we release a Mexican movie, it’s not going to open in Florida or the East Coast, for instance, but it will work in California or Texas. What we’re trying to do is to find stories that are universal and are not rooted in one culture, and then we can sprinkle some Latino DNA over them.
At the end of the day, it better be a good movie, because you can’t just take a movie with a nice story and no star and throw some Latinos into it and expect people to show up. They live their lives in this country. They see themselves as part of the bigger fabric of America, and they want to see themselves and their lives represented in Hollywood in ways that are entertaining and not just political.
There’s been a rise in regional filmmaking over the last five years and that’s been really important for films like “Beasts of the Southern Wild” and “Fruitvale Station.” By being firmly rooted in a specific geographical place, filmmakers are able to build audiences and engage with people at a different level. It adds a layer for people, because it helps people feel more a part of the process and tools like KickStarter facilitate that sense of community.
Also read: How to Improve Hollywood, 2012 Edition
Filmmakers are recognizing that with a lower budget comes more creative control. When you’re making a film for between $500,000 to $1.5 million, there’s also the opportunity to have a different relationship with your financiers and funders. Because of new technology, the cost of filmmaker has never been lower and you don’t have to raise astronomical amounts before you head into production. You can do things at a micro-budget and be incredibly creative, but it’s difficult to know how to do this as a sustainable career.
When you’re a first-time filmmaker, you have this fearless attitude and everybody is rallying around you and you can get in-kind services and call in all these favors. That’s fine when you’re in your twenties. But can you afford to do a $300,000 film when you’re in your thirties and forties and you have a family and you want to own a house? It’s exciting because there are all these digital platforms out there, but not many pay off financially, so filmmakers really need to educate themselves about what opportunities there are to distribute their films. They need to own whatever their decision is.
I’m optimistic, because I do think audiences have an appetite for unique stories and still want the thrill of discovery. These films are exploring deep social issues and they’re often coming at their stories from a place of activism. That creates opportunities for engagement that transcend the film. As long as they’re able to enlighten an audience without hitting them over over the head, I think we’ll find that people are up to the challenge.
Diversification is the key to success in modern Hollywood.
Because studios are releasing fewer movies, the creative class must generate more projects on its own. Movie stars are now producers and directors are distributors. Look no further than George Clooney and Brad Pitt, who established viable production companies that make many of the movies that were languishing at studios. Pitt could win an Oscar for “12 Years a Slave,” and Clooney’s track record writing, directing and producing speaks for itself.
Actors, writer and directors who have relied on movies for work also need to look elsewhere. There are more opportunities in TV than ever before, and digital players like Netflix, Amazon, Hulu and YouTube also offer a new outlet for creativity. Permit me to talk about one of our clients for a minute. Judy Greer was an actor, and then she diversified. She partnered with Yahoo for a little show called “Reluctantly Healthy,” and she also got a book deal out of that. All the while she was still working as an actress.
This applies to agencies too. The changing economics of the entertainment industry spurred CAA to launch a sports division (among many others) and helps explain WME’s recent acquisition of IMG. On a smaller scale, we have built a robust production business. We don’t discriminate between film, television and digital series.
The money is just beginning to flow into these “nontraditional” areas, but in a few years they will just be traditional.
Markets come and go, and Hollywood has been around so long it feels like it’s seen it all, but China is something new. It’s more than just a film market coming on line, it’s being fueled by greater development across China. But it’s still a very tough nut to crack culturally, geographically and from a language perspective.
The growth potential hasn’t fully kicked in. Look at the number of screens per capita in the United States. It’s about 35,000 screens, or one screen for every 7,500 people. In China they’re building 10 screens a day, but they’re only at 15,000 screens. That’s one screen for every 93,000 people. Theoretically, to reach the U.S. ratio, would take 165,000 screens.
Their second or third tier cities are also growing rapidly. While Shanghai is home to 27 million people, these “small” cities boast populations in the 1 million to 4 million range. These are going to be very important markets to capture, but they’re also the farthest away from an American sensibility.
China is not worried about the Hollywood film industry. There are certain times of a year when a foreign film may get through, and there are other times when their domestic product is not doing so well, so they may be more restrictive. Politics is the trump card for everything. If they want the box office to rise 30 percent and Hollywood can help, great. You’ll see more Hollywood films get in.
Look at what happened when “Hunger Games” and “Gravity” came out at the same time, “Hunger Games” did poorly. Studios were so focused on the amount of films that got in, that they didn’t realize it’s only part of the story. You still can not be allowed to market it correctly or to release it in theaters for a long time.
Everybody is trying to figure out the rules and make changes on the fly. Everything is happening so quickly. It took decades to build the movie business, but look at the size of the market growth here. The key is to go back to the birth of Hollywood. People were more entreprenuerial and much more innovative from a business perspective. That can be very exciting if you embrace that attitude and it becomes part of your DNA.
It was a really strong year for movies. In fact this year was better than last year, which was a pretty good year. I have some misgivings about the people who didn’t make movies. There were a lot of great white directors and black filmmakers and male directors, but there were not a lot of women or Latinos or Asian-Americans.
The argument that TV was more compelling than the movies was wiped out. There’s a lot of good stuff on TV, but I don’t think the movies are in danger in the way they once were. It reminds me of how when TV was a threat to the movies in the ’50s and ’60s, movies had to find a way to innovate to compete. They’re doing that again. There are more stars in movies being movie stars, which is something TV can’t do. It can’t have Julia Roberts or Meryl Streep in a show together or send Sandra Bullock and George Clooney into space. “Gravity” is a refutation of the idea that TV has eclipsed movies, because that could only be made for the big screen.
There are a number of people who are really committed to making art. I have yet to have a conversation with [“Her” and “American Hustle” producer] Megan Ellison, but she seems like a person who loves movie, and who happens to have the money to get them made. Production wise she’s an angel. Even the movies of hers I’m not crazy about, I’m so glad they got made, because they’re fun to talk about and fight over with people.
There were also a lot of movies from big studios that were riskier even though they were put in the hands of directors who won’t ever let you down. Risk may not be the right word for “Gravity.” It didn’t cost $300 million, and Sandra Bullock and George Clooney were in it. It wasn’t so much that it got made, it was how well it got made. This was an example of a great director being left alone. Alfonso Cuaron made compromises, but they were his compromises.
The other thing I was excited about was that Martin Scorsese’s filmmaking vigor has returned [with “Wolf of Wall Street]. I don’t know what it was that fired him up, but it was a really heartening thing to see. This is a guy I tend to write off as not being as vital as he was when he was younger and he just came out with the most exciting movie he’s done in 20 years.
Not everything has to be about art, but I do wish that J.J. Abrams and Joss Whedon would do more of their own material instead of “Star Trek” and “Star Wars” and rehashing everything because they’re fans of it. Joss Whedon made “Much Ado About Nothing” in his house and joked “The Avengers” paid for it. I’d like to see him do more of that.
From a distribution perspective, there isn’t a better story than the development of the electronic-sell-through business. The Digital Entertainment Group reported sales of electronic copies of movies increased 50 percent this year. Our titles have grown 100 percent.
With faster broadband, more connected devices, smart TVs, gaming consoles, cloud storage and new online retail stores like Comcast’s, the consumer has more places than ever before to buy and watch video at home or on-the-go. That means the entertainment industry has to make it easier for people to watch their movies where they want, when they want – and for a reasonable price.
The industry has done a good job locating an appropriate price point for consumers while still making money for our partners. The next step is focusing on the product. When we transitioned from VHS to DVD, that experience was transformational for the consumer. You went from a big fat cassette to a shiny new disc that let you jump between scenes and access special features. We need to find something transformational for electronic copies.
As the physical DVD business continues to slide, EST is a completely new revenue stream. We can transition consumers to this new business while doing everything possible to preserve the physical business. If you call [Fox Chairman] Jim Gianopulos or [Warner Bros. CEO] Kevin Tsujihara, they will tell you a similar story. EST hasn’t solved all the woes of the industry, but there is a positive trend taking place.