Mega studios are teetering on the brink of collapse based on the ratio of mega hits versus losers they field. The industry is already projecting a downward trend of the comic and action/adventure franchises that generated the rebound for Hollywood over the past ten years.
For the consumer, the blame is focused on increased technologies reducing the price of a high quality theater experience at home compared to the rising ticket prices at theaters. For the artists, the blame falls upon the marketing and business people forcing the creatives to regurgitate franchise installments and sequels over and over again – Driving the creatives to independent projects and “television” (in its latest Internet form), where they can create something new and unique.
Within this setting is the rise of independent niche production companies including, and most notably, the faith-based and horror genres. Today there are tens of thousands of production companies due to easy access to less expensive technologies. Anyone with a wealthy friend can now make a feature length movie.
Unfortunately, this glut of material is turning major distributors away from purchasing independent films, as the vast majority of the films lack great techniques and story structure. The films that can’t get a viewing with a distributor and those that are rejected by distributors, are creating a massive transition to digital releases to niche markets, sabotaging the numbers within existing audience venues.
Since no independent filmmaker has enough fans to perpetuate his products, the need has grown for joint ventures within the independent marketplace. This is closely following the corporate trend of jobs being farmed out to boutique companies that pool their resources from one project to the next.
The companies that are attracting the pros and generating sustainable work, rather than just collecting points for backend payoffs that rarely occur due to creative financing, are expanding into macro studios. This enormous growth is being tracked by studios who plan to infiltrate and take advantage of the new production finance models.
While Orlando was first considered to be the east coast of Hollywood, it evaporated when the economy dropped. This was due to the fact that studios only sent overflow work to Orlando. However, the high risk ventures of big box office mega pictures created additional constraints and forced Hollywood to pick up as many titles as possible without the up front risks.
Everyone, filmmakers included, decided they were capable of making films and created a glut of bad movies. Last year, out of the 400+ horror films produced, less than 50 got distribution deals. Out of the 470+ faith-based and Christian films produced, about 200 were self-distributed and 19 received a major release. The glut of bad movies that distributors had to sort through was on the increase; causing distributors to focus only on companies they can trust.
In other words, the onslaught of amateur films in 2014 made it very difficult for professional companies to start off 2015 with any traction. This trend will continue, as Hollywood knows that only great production techniques coupled with great storytelling is paramount to wide distribution success.
The ramifications will force the professionals to create macro studios and joint ventures in order to consolidate audiences and accumulate enough revenue to cover better techniques and storytelling.
Thanks to a new stream of creative control in cable and Internet television, many macro studios are already in place and waiting for the transition to grow their businesses. Unfortunately, some smaller studios are still trying to make films for the dispersing markets instead of consolidating audiences with like-minded projects.
This shake up is as significant as the one that hit in the late 70’s with the introduction of home video. In the long run, the mom and pop shop studios that survived were the ones who shifted to digital production over film. The ones who held tight to film fell by the wayside.
Over the next three years, production companies that partner on bigger projects will see a great deal of growth, while those trying to keep everything within their full control and low budget will be forced to stay within their niche markets. Horror film companies will be sorted based on the categories of thriller versus blood and guts. Faith-based films will be most likely sorted by denomination.
The companies rising to the top will be limited to higher budgets, production values, great unique stories, and universal appeal. Amateur companies can’t fake these key elements, which is why it will become the differentiator within the world of motion picture production, regardless of release format.
Great analysis, great insight, great article!
Thanks, Paul. I’m always amazed at the obvious trends and how different people adjust or choose not to adjust.