by Editor B
Many years back, when discussing new business models that don’t need to rely on copyright at a Cato event, an NBC Universal executive demanded to know how he could keep making $200 million movies. As we said at the time, that’s asking the wrong question. It’s makes no sense at all to start from a cost, and then derive back how to make that profitable. I could just as easily ask how can we possibly make $1 trillion movies in the future? The only thing that should concern Hollywood is how it can make profitable movies in the future. That could mean figuring out ways to make a profit on a movie that costs $200 million (and, certainly big blockbuster movies like Avatar sure seem to still be able to make plenty of money, despite being widely downloaded via unauthorized means). However, it might also mean making really good movies for a lot less money. Of course, we’ve suggested that in the past, and got mocked by Hollywood folks who seem to insist that any good movie has to cost a lot of money. That seems pretty presumptuous.
I’m a bit behind on this (the SOPA/PIPA stuff took up a lot of time), but filmmaker/actor/director/writer Ed Burns, who came to fame a couple decades ago with the massively successful indie film The Brothers McMullen, likely had every opportunity to follow the path of plenty of successful indie moviemakers: go mainstream. He could have hooked up with a big studio and been filming the latest of those $200 million bubble-gum flicks. And while Burns has appeared in a few big studio films (Saving Private Ryan), over the last few years, he’s really focused on staying close to his indie roots. In fact, he’s stayed so close to them, that you could argue his latest efforts are even more indie than his first film.
He filmed his latest movie, Newlyweds for a grand total of $9,000 ($2K for insurance, $2k for actors, $5k for food, transportation, and other costs) and was done in just 12 days — but spread out over 5 months. He used a three-man crew, natural lighting, found locations that didn’t require paying, and filmed with a Canon 5D camera.
Two years ago, Joss Whedon produced Dr. Horrible’s Sing Along Blog for about $200,000 and made over twice that back. It could be more today.
And as shown in this example, it is a nice business model. And it is a business model totally disruptive to the sorts of business models used by Hollywood, whose bloated budgets support an ecosystem which permits them to use arcane accounting schemes resulting in movies that never make a ‘profit.’
The same technologies that can produce this disruptive system also happen to be pretty much the same ones that are also used by the ‘pirate’ they claim to hunt. It is very possible that the regulations they get in place to save their own business model will also be used to prevent market entry to the very same disruptors that threaten them.
A win-win for them and a huge loss for us. And for the creative talent that creates the material for the studios to begin with.
This is how money corrupts so much of our system.The only way to stop this is to make it a crime to do what Whedon and Burns are doing. And a first step along this path is to hamper the use of digital technologies and restrict the innovations they drive from bearing fruit.
Industrial Age approaches created business models that need billion dollar movies in order to sustain them. Or billion dollar drugs. Or 10 million albums sold. Or a million books sold.
Information Age approaches create business models needing 1000-fold lower revenues to sustain them. Instead of fighting this disruption, a healthy system would be working with them, coppting their disruption to further their own business lives.
Not likely to happen as we watch Kodak – who collaborating with Apple sold one of the first personal digital cameras – file for bankruptcy, completely missing the digital revolution it was actually first poised to take advantage of.
Now the studios stand at the same spot Kodak did 15 years ago. WIll they make the same mistake?
But as with all disruptive technologies, the studios can just not see how making a movie for $100,000 and getting back say $300,000 is sustainable. I expect there are huge numbers of creative talent who would disagree.