Tuesday, February 2, 2010

Business Models: Play it Safe or Risk/Reward?

Ever notice how there seems to be less and less original content making its way onto movie screens lately? We've seen a dramatic rise in remakes, reboots, spin-offs, and adaptations of proven material in recent years, which points to an overall shift in the industry away from what's novel and towards what's established. Of course, if you're going to finance a movie, it's a safer bet to throw your money behind a franchise that millions of consumers have already thrown their money into. But a lot of times focusing on what's established isn't quite as lucrative as focusing on what's establish-able.

The cover article of this week's "Variety" magazine outlines the new business practices taking shape at the Disney company under new CEO Rich Ross. Disney's strategy for 2010 and beyond is to "make movies that define the Disney brand - and that can be exploited on TV, DVD, online, and through games, theme park attractions and merchandise at its Disney Stores." Hey, it never hurts to have a diversified revenue stream, right?

But what if diversity in money-making areas comes at the expense of diversity in content? Here's a direct quote from Ross: "Going forward, we will focus almost exclusively on making branded films from Disney, Pixar and Marvel." (Disney acquired the comic book giant on the last day of 2009.) A Spiderman reboot that puts Peter Parker back in high school will probably net a fair bit of coin for the Mouse House, but how much potential for expansion is there when your five year plan basically consists of trotting out slightly different variations on well-worn themes?

What we have here is a spectrum of business models. On the one hand, we have Disney's strategy: playing it safe and banking on consistent performers to continue performing consistently. On the other hand, we have a strategy that's usually taken up by smaller and more independent studios: find a premise that's interesting or compelling, then try to get people to see it. This is the motive behind film festivals like Sundance, the 2010 edition of which just completed some pretty high profile sales. Sundance topper John Cooper: "We were showcasing the best, most original work, not what might be commercial. But all of a sudden, what's good has commercial potential."

To bring in a non-entertainment related example, Sports Illustrated's Tim Marchman recently gave a pretty good rationale for adopting the Sundance business model: "the hardwired human desire to hit a jackpot. [Baseball t]eams are more willing than they should be to bet a lot on the small chance that a player will be really great, and curiously uninterested in paying for a sure thing." Suffice it to say that if such great baseball general managers as Billy Beane or Brian Cashman were to apply for a job at Rich Ross's version of Disney, they'd promptly be laughed off the lot.

I don't mean to keep picking on Disney - I'm sure most big studios operate in the same way - it's just that I just happen to have their upcoming slate ready to hand. Alice in Wonderland and Prince of Persia come out this year. They're redoing 80's era classic Tron. Robert Zemeckis is re-adapting Beatles-inspired Yellow Submarine. There's a couple of movies based on Disneyland park (Jungle Cruise and Tomorrowland) and one based on a snippet from a Disney legend (The Sorcerer's Apprentice starring Nicolas Cage as presumably the Sorcerer - he's a bit long in the tooth for the apprentice). And then it's off to sequel town: National Treasure, Pirates of the Caribbean, and Enchanted are all getting companion pieces sometime sometime down the line. And that's not even counting the inevitable Marvel-inspired comic book fare.

Of course, the proof is in the pudding, and no one can say for sure whether this slow and steady tactic in terms of content development will eventually win Disney the box office race. The fact that two of Disney's 2009 remakes - Zemeckis's 3D Christmas Carol and The Rock vehicle Race to Witch Mountain - failed to impress certainly isn't encouraging for the rehash-everything-you-possibly-can strategy. But maybe it's just a question of scaling down and picking projects carefully - Ross recently nixed a McG remake of 20,000 Leagues Under the Sea because he didn't think it was sufficiently brandable.

And if it's a question of branding, I'm inclined to trust Rich Ross, the mastermind behind Disney Channel mega-franchises High School Musical (two sequels, a stage show, a reality TV spin-off, numerous video game adaptations, and High School Musical on Ice) and Hannah Montana (movies, concerts, and an actual music career for star Miley Cyrus). He certainly earned the right to make the big decisions for Disney, and it appears he's going to make some lucrative ones.

But what will be the consequences of such box-office/branding inspired decisions? We'll see Disney's coffers increase for sure. On the surface, the plan looks like it's nice for the consumers, because it provides lots of movies that lots of people will want to see. But in fact, this system really just treats each audience member as a walking cash machine with a smattering of freewill - just enough to decide which big-budget tentpole productions he or she wants to patronize on any given weekend.

But the real consequences of such business practices have to do with the way the films themselves are treated: as commodities to be exploited rather than as pieces of art. I realize that distribution and marketing are handled by different groups of people than the actual creative teams that make the movies. But how must a director feel when his film is financed by a corporate-structured megastudio that only cares about his work insofar as it turns a profit at the box office?

Sure there are people who get into show business for its artistic aspects, but the terms will always be dictated by the corporate types, because they're the ones that have all the money. Because, at bottom, show business is a business, which are usually best run by businessmen. If you think this is a revoltin' development, let me leave you with the immortal words of Arthur Jensen from Network:

"The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live to see that perfect world in which there is no war and famine, no oppression and brutality. One vast and ecumenical holding company, for which all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused..."