Wednesday, July 30, 2014

Heath Holland On...The Billion Dollar Dilemma

by Heath Holland
How does success affect the movie industry?

Sometimes it can be a challenge to tackle an old issue in a new way. I’ve already written about getting older, coming to terms with not being Hollywood’s target audience anymore and the struggle to discover my role in modern movie culture, so I’m not going to do that again. Instead, I want to explore the topic from a different angle.

Let’s talk about Michael Eisner.

Michael Eisner was the head of the Walt Disney Company for over 20 years and was the man of charge of Disney’s “Renaissance Period,” the run of films that included The Little Mermaid, Beauty and the Beast, Aladdin and The Lion King. He steered the company back on course after years of decline following Walt’s death. If you had warm thoughts of the Disney product between the years of 1985 and 2005 it was probably because of decisions made by Michael Eisner.

Before his tenure for the Mouse, however, Eisner spent the better part of a decade serving as the president and CEO of Paramount Pictures. By most reports, Eisner is a shrewd businessman with a hard nose and an abrasive personality. He’s been demonized -- probably justifiably so -- by the people who have worked alongside him and beneath him as being a no-nonsense guy who sticks to the plan with no exceptions. There’s a story out there about a director who went over budget on a Paramount film after being told explicitly by Eisner that there wouldn’t be single a penny given beyond the allotted sum. True to his word, Mr. Eisner required the director to come up with the excess money from outside investors.

It was during Eisner’s tenure at Paramount that he and the studio head Barry Diller green-lit Raiders of the Lost Ark with a budget substantially over the studio’s average investment. It seemed like a good gamble: Spielberg, Lucas, Ford, and a movie that promised all the fun of Star Wars in an adventurous, pulp setting. The film made lots and lots of money and paid off big for Paramount, some $240 million in the U.S. alone.
Seeing the fork in the road ahead of him and the temptations that lay before Paramount, Eisner wrote a 21 page statement that he issued to his executives, recounted in detail within the book Disneywar by James B. Stewart. Eisner wrote (I’m paraphrasing) that one blockbuster success can lead to the idea that a studio will continue to make blockbusters and that true success can make you forget what it was that made you succeed in the first place.

He then went on to write:

We have no obligation to make art. We have no obligation to make history. We have no obligation to make a statement. But to make money, it is often important to make history, to make art, or to make some significant statement…in order to make money, we must always make entertaining movies, and if we make entertaining movies, at times we will reliably make history, art, a statement, or all three. We may even win awards...we cannot expect numerous hits, but if every film has an original and imaginative concept, then we can be confident that something will break through.

Flash forward to 2014. Michael Bay is asked by MTV about the criticisms that have been leveled at him by “fanboys” (a term I loathe) over a perceived lack of depth and character development in his latest and fourth Transformers film. Bay responds, “They love to hate, and I don’t care; let them hate. They’re still going to see the movie.”

And Mr. Bay, it would seem, is correct in that statement. Despite being tarred and feathered by the critical community and having a 55% freshness rating on Rotten Tomatoes, Transformers: Age of Exctinction has grossed almost a billion dollars worldwide as of this writing. That’s BILLION, with a “B.”
Meanwhile, San Diego Comic Con 2014 has come and gone and there have been announcements of films that won’t see the light of day for years. Each of these is either a sequel of an existing franchise property or an adaptation of a comic book series, video game, or toy line. To be clear, Hollywood still makes movies NOT based on comics, video games, and toy lines, but those don’t make nearly as much money as their caped counterparts. They also frequently fail to get wide distribution because if my local theater can put Transformers and Dawn of the Planet of the Apes on a collective six screens and sell out each showing then it makes no economical sense to free up a screen for something like Snowpiercer or A Most Wanted Man, both examples of movies that I have as much of a chance of seeing at my local multiplex as a sasquatch (studies show that both Snowpiercer and A Most Wanted Man tested very high among sasquatches).

A look at the top ten financially successful movies of 2014 so far reveals that seven of them are sequels, four of them are based on comics or cartoons, and that not a single movie in the top ten is based on an original idea or concept. I don’t raise this point to say that the sky is falling or that we’re all going to die (but let’s be clear, WE ARE ALL GOING TO DIE) but rather to point out that this is simply the way things are now.

Hollywood is spending more money than ever on their projects, but we’re also spending more money to go see them. The movie grosses go up, they go down, but they make more than enough money to sustain this current model for years into the future. The geeks (another label I think I’ve about had it with and which has lost all meaning) have inherited the earth and we now have studios that cater the vast majority of their annual budgets to that audience. Eisner’s model of creating interesting and varied ideas is the exact opposite of the mentality I see in the modern marketplace.

Yet the new model seems to be working. These sequels, remakes, and adaptations are a huge financial success and make everyone involved with them so much money that caravans of Brinks trucks are required to deliver it all.
My question is simple: how sustainable is this method of filmmaking? I come from Eisner’s school of thought. Make good movies with an original idea and the people will come to see them. Create something that you’re proud of. Don’t phone it in; don’t do something just for a fat paycheck and if you do your best then quality will always shine through.

But Eisner’s school of thought would crash and burn in today’s climate. As much as I admire Eisner’s keen business sense and would have modern studios replicate it today, it doesn’t look like it would work. If a studio attempted to do this in today’s climate, their movies would likely never see the light of day. If you are director or screenwriter today with delusions of art then you’re doomed to spend years in obscurity before someone higher up notices you. The endgame seems to be that if you work really hard you may one day get to direct a big budget comic book movie. Look at Gareth Edwards and his film Monsters. He made that movie for almost nothing and now he’s got Godzilla, a Godzilla sequel, and Star Wars. It’s like punk music: you can be an anarchist, but sell a few records and you’ll be driving a Cadillac before you know it.

The movie industry has had its ups and downs in the century or so that it’s been around, but I don’t know that it has ever been faced with the unique challenges that it finds itself dealing with currently. If you ask me, the new Hollywood is trapped in a cycle of prosperity, each new movie being born from the shadow of a success that came before it, attempting to replicate any formula that worked at one time or another. That seems like a risky proposition to me, but so far it’s a gamble that’s paid off. It appears that success really does breed success, at least in the short term, and the movie train continues on down the track to the next blockbuster.

But what happens when we reach the end of the line?


  1. Dear FthisMovie:
    You guys rock. every posting a beacon of sense in the bloated. Always a pleasure to read, and listen to, your posts. Keep up the good work!
    Dave in Calgary

  2. Great article. I feel like a big test of the prevailing "wisdom" that people just want the same thing over and over again will be Guardians of the Galaxy—a movie with massive critical buzz, but zero popular characters. It's a weird example because it has the Marvel name attached to it, but even with all the hype there are still people convinced it will "flop" (add that to your list of awful words) because it has a talking raccoon or whatever.

    If GoTG is embraced by audiences (and I think it will be because it looks FUN), it may be a baby step towards getting the kind of raucous, inventive blockbusters we got in the late-'70s/'80s. That's one thing I appreciate about the Marvel movies, warts and all. Unlike other comic book movies, they are bright and colorful and fun. If one of them ever happens to be about something more than what we see on screen, then hey—bonus!

    1. I think we're all watching Guardians of the Galaxy to see how it all turns out. I hope it's successful because I want Marvel to be rewarded for taking a gamble with what appears to be an offbeat character movie. And I love Marvel movies! I hope you're right and if it's successful then studios will want to make more offbeat, weird movies. But I suspect they'll just look for comic books that have offbeat characters in them and make movies about those. Ambush Bug, here we come.

    2. All I want in this world is a Plastic Man movie.

    3. Would an Elongated Man movie suffice?

  3. You know what scares me? That Spielberg and Lucas last year said Hollywood is headed for an implosion when, inevitably, a half-a-dozen $250 million plus blockbusters in a row fail during one season. I don't mind Hollywood being spanked for its lack of originality, but those losses are going to be felt by thousands of technicians, SFX artists and actors that are going to be out of work before the suits that green-lit, micromanaged-to-death and sucked the joy out of these films are all in the unemployment line.

    Shit, just the fact Spielberg, with all the clout and financial security he's amassed over the years, had to beg and struggle to get "Lincoln" financed and made perfectly encapsulates what you've talked about, Keith. Money talks, and in Hollywood right now Michael Bay is a bigger deal than Steven Spielberg.

    1. Spielberg also said that Lincoln almost ended up on HBO... and as good as the movie is, I can't help but wonder if that would have been a better outcome. Kushner says he didn't get the idea to specifically focus on the story of the Thirteenth Amendment until after he'd written a 600-page monster script. Well, great, but as terrific as a bunch of the subplots were - Lincoln's son wanting to join the Army, Mary's declining mental health, the details of the military peace talks, and lots of other small colorful scenes sprinkled throughout - the movie might have been even stronger had it been leaner. Alternatively, an even more developed HBO miniseries might have been even more wonderful, albeit in a different way.

      Maybe Day-Lewis wouldn't have consented to do a multi-part miniseries. Maybe there were budget concerns; maybe HBO's John Adams underperformed. Or maybe Spielberg just correctly judged, against studio projections, that there was more money to be made in making a big-screen movie, and wanted to pay some bills. (It did, after all, gross 270m worldwide on a 65m budget.)

      What I am saying is, you can't just keep art in a cage. Art fights, it evolves... art... well, art finds a way. :P

  4. That last sentence makes me so sad :-(

  5. The only thing I know is that while overall grosses may be up...that the money is still pouring in...

    Overall, ticket SALES are down. Less of us are going.

    And that's really, truly sad.

    1. I didn't mean to be a bummer. So ticket sales go down and prices go up. Is it a successful business model to keep prices where they are and diversify projects? I wonder if this option is even on the table or if execs continue to chase trends instead of creating them. What I wouldn't give to be a fly on the wall in some of those board meetings.

    2. The article wasn't a bummer at all, Heath; it was really quite good. I simply meant that it's sad that fewer people are going to the theaters these days (I wish I went more, too -- but this last year that's been more a money issue to be honest).

      I don't have a specific answer for the problem but I would love to think Hollywood will simply make better movies and that will solve everything, but really there are always enjoyable films and always crap. It feels like they operate from a place of fear more often now, though. Or maybe it's just something William Goldman said once: "Movies used to be a tug of war between art and commerce; these days, commerce is just wiping the floor with the little guy."

  6. Nice column Heath, I gotta imagine a lot of the execs are looking at the big tentpole movies and are pulling a Yogurt by saying the movie is all about "Merchandising, merchandising, merchandising!" Cause even if Guardians ends up underperforming they will still sell a lot of the toys as well as crossover with Avengers and I think thats what the execs are looking at.

    The thing I really miss is those nice middle budget movies that actually keep it between 40 to 60 million budget wise and arent necessarily about saving the entire world. These type of movies as well as smaller dramas or independent films are the ones suffering and I've made it a point lately to get out to the smaller theatres to catch them (Obvious Child, The Raid 2).

    Hopefully we get more directors in the future doing the "One for them, one for me" gameplan that Christopher Nolan has been enacting during most of his career.

    1. I agree, and would also like to see several of the $200 million budgets scaled back to around $120 million (I'm looking at you, Edge of Tomorrow). One of the challenges for small movies is getting sufficient distribution and marketing. Films need to play in at least 750 theaters to make over $10 million. Low budget movies don't usually get wide releases, but there can be exceptions (Begin Again peaked at over 1300 theaters).

  7. Worldwide revenue is increasingly important and helps reduce the risk of a flop. However, the studios get a smaller share of foreign box office: about 25% in China, 40-45% in other markets, and 50-55% in the U.S. There remains significant incentive to maximize domestic gross, especially in the first week of release when the studios typically take 80% of ticket sales. I expect the studios will eventually establish production and/or distribution operations in China, South Korea, and a few other key markets in order to improve financial returns.

  8. It all starts with the people in the seats. Viewers need to be more selective or at least delay watching bad movies until a few weeks into the run. There will be no pressure on the studios to improve quality or reduce budgets as long as consumers keep paying to watch movies they don't like. Consider the following: Identity Thief had a domestic gross of $135M even though only 54% of viewers liked it. By contrast, Edge of Tomorrow was liked by 91% of viewers but will only sell around $100M of tickets domestically. (Sources: Rotten Tomatoes, Box Office Mojo.)

  9. Excellent article! Completely agree! I've been thinking about these issues a lot lately and how Hollywood has evolved. I think it says something if some of your favorite movies of all time, weren't made in the past 20 years.

    I rarely, and I mean rarely, go to the theater to see a movie. I'm not going to see a movie that I know I won't like, why should I? All the movies I want to see (like independents, documentaries, etc) never make it to my theater (and I live in a college town). As several of you have pointed out, the art of film making is suffering. As Patrick and Heath pointed out in the podcast, nothing coming out of the studios these days are original ideas.

    That is where I lose respect for studios. Give me something original and unpredictable! Over the past 20 years (I started out young), I have seen this slow decay of Hollywood and some of my favorite directors have become less creative with every movie. What will the directors/creators of 2035 say were their most influential movie? What movie today would they say caused them to write that story or to compose that score?

  10. Great article, Heath and a good surface look at an issue someone could write volumes about. So many complex things going on that have brought us to this point. As I started reading (and prejudging) that Eisner quote I thought the fucker was just going to say, like fucker Michael Bay, that they only have an obligation to make money, so was glad to see that he's what I'd call a good capitalist. Make something good and you'll make money. Unfortunately what that has become, and maybe it's a result of perfected marketing, psychology, social media or some combination or whatever, is make something that simply pushes the right buttons and the masses will buy it whether it's actually good or not. Sometimes it also works for the more discerning consumer (as JB mentioned in the podcast re DotPotA) but it doesn't have to, so there's very little incentive to really TRY.

    And this applies to capitalist/consumerist world in general - the film industry has the additional hurdle - and it's a doozy - of the fact that millions of people are just stealing their shit! And not even feeling bad about it! I know so many people that look at my relatively massive blu-ray collection and think I'm so stupid for buying media - like I'm the asshole! As we all know, it's killed the medium-budget picture - unless you can convince people something is worth a "theatre experience" they'll just steal that shit.

    Sorry, on a rant - to try and cut it short, it's hard to say whether it's modern consumer culture or pirating that's more to blame for driving the film industry to the weird and potentially untenable position it's in now, but I'm tempted to say the latter. And as much as I hate to side with THE MAN, to protect this art form I love I have to hope that they start seriously cracking down on the pirating shit - I think that may be the one tangible thing that can be done to correct the course we're on and save the film industry from implosion.

    1. That's an interesting point about piracy. I didn't think about that, but it's true. You hear about how The Expendables 3 got leaked and was downloaded thousands and thousands of times? That's certainly got to hurt the bottom line, right? I don't even know what to say about that. It makes me feel icky. The question is how do you truly stop movies from being pirated? Music piracy dropped drastically when iTunes came on the scene. Comic book piracy stopped when the publishers started offering digital comics on the same day and date as the physical book release. With movies is the answer really to offer a digital download? then the theatrical experience dies.