An interesting analysis of the state of filmmaking, delivered at the LA Film Festival by Mark Gill, former head of Miramax, is at this link
http://www.indiewire.com/biz/2008/06/irst_person_fil.html It is kind of long, but seems insightful.
- Mick Hoegen
Here are selected exerpts:
We've heard "the sky is falling" in the movie business before--notably with the introduction of TV, home video and DVD. On all three occasions, the business survived. And DVDs arguably helped grow the worldwide movie-viewing habit considerably-- even as they threw off a ton of cash. But this time, at least as it relates to independent film, the sky really is falling.
The marginally good news is it won't hit the ground everywhere. The strongest of the strong will survive and in fact prosper. But it will feel like we just survived a medieval plague. The carnage and the stench will be overwhelming.
Here's how bad the odds are: of the 5000 films submitted to Sundance each year-- generally with budgets under $10 million--maybe 100 of them got a US theatrical release three years ago. And it used to be that 20 of those would make money. Now maybe five do. That's one-tenth
of one percent.
Put another way, if you decide to make a movie budgeted under $10 million on your own tomorrow, you have a 99.9% chance of failure.
Those terrible odds for movies under $10 million? Ironically, they get far better if you spend more money. All the financial data I've looked at--and it's a lot--clearly shows that the sweet spot is between $15 and $50 million. But that has a lot to do with being able to pay professionals who know what they're doing to create quality emotional content that has a market. And it has a fair amount to do with the prices that international distributors can afford to pay in the top 12
countries, which is what gives financiers enough comfort to commit capital.
Clearly, only the better films will succeed in the theaters of the future. Certainly the number of releases will drop--by half or more. Probably everyone other than the folks who work on tentpoles will be paid less. The words "theatrical necessity" will take on greater and greater meaning. Probably a lot of theaters will close. But I think the best theaters showing the best films will always have an audience. And the rest of the films will have their premiere in Walmart, or on
your cell phone.
Interestingly enough, in this Darwinian new future, there will absolutely be a premium for good films on tv, pay per view, on-demand, internet--or whatever that large pipe that goes to all of our houses will be called.
Why do I know this? Because one of the big research companies conducted a study recently which gave viewers on-demand everything. No more schedules. No more appointment television. Just tune in anything--any movie, any TV show--at any time. And guess what: the best stuff won out. Hands down.
In a nutshell, the audience is sick & tired of the atrocious but all too familiar version of television on a schedule: 500 channels to choose from, and nothing to watch.
Some of this is purely a function of demography. There actually is a growing audience for quality.
*It's not hard to figure out why: the baby boom is aging. And as they do, their tastes mature. But they don't behave like their parents at the same age. They are smarter, more active, have more disposable income. And because of pay cable, home video and DVD in particular, they've
become much more movie literate-- and more sophisticated in their tastes.
*Traditionally specialized films accounted for 5-6% of tickets sold. In the last few summers, it's been over 10% on average. And that's the season when Hollywood is supposed to dominate and indies are supposed to cower in the corners, waiting for the arrival of fall.
*And to back that up, for the first time in the roughly 20 years I've been looking at this data, more than 10% of the audience now is telling pollsters they prefer independent films.
When the movie business went from tape to digital, we dropped the wholesale price per unit from $65 to $10. And everyone said: "Oh my god, they're killing the business. Our profit margins are ruined." Well, the margin was smaller, but sales exploded. The studios made tens of billions of dollars on the difference. And consumers mostly like what they're getting. So much so that movies are the second-highest rated consumer value for the money. Behind only chicken.
The next big change will be when we start shooting movies to mobile devices in a big way. The wholesale price will drop again--probably to $3 per unit. But we'll sell so many more of them that revenue will explode all over again. This has very favorable implications for getting past piracy problems that helped kill the music business: the charge for downloading a film will land on your phone bill. And the moviemakers can hold the phone companies accountable (whereas now
internet providers duck and hide when we try to pursue them for what amounts to transfer of stolen goods).