ec·o·sys·tem
ˈēkōˌsistəm/
noun
ECOLOGY
1. a biological community of interacting organisms and their physical environment.
(in general use) a complex network or interconnected system.
“Silicon Valley’s entrepreneurial ecosystem”
Everything is this world is part of an ecosystem. An ecosystem sets out the natural order of things and if properly maintained provides balance and equity. If an ecosystem is disrupted or the order of things is seriously maligned then the ecosystem breaks down and slowly ends up destroying itself. That is just nature. It can be applied in our own lives and in the life cycle of business.
Harry Cohn, the force behind Columbia Pictures was once quoted as saying “I have a foolproof device for judging whether a picture is good or bad. If my fanny squirms, it’s bad. If my fanny doesn’t squirm, it’s good.”. Personally I kiss Harry Cohn’s posterior because it has been replaced by herds of accountants, statisticians and prognosticators who are all getting it so very very wrong. They have lost all concept of what the public wants and think for some bizarre reason that a pie chart knows more about what the American public likes than the American public. Oh I forgot….the Chinese public too.
This has been an interesting summer. It really could be labeled the summer of discontent for many reasons, not just the weak theatrical box office. There seems to be a huge communal vacuum of leadership in America today. Instead of acting, people and markets are reacting which is never good. We are facing in all sectors; business, politics, and the arts, a crisis of having no real choice. The current models are failing and people are descending into absolutes. It is not good.
America is looking for alternatives. While the fringes scatter to embrace some wacky and isolating dogma, the majority of people are just looking for value and for common sense. American people as a whole are far more collectively intelligent and wiser that the people that end up governing them. There is great goodness and pragmatism in them and they know that the economy and society as a whole is adrift. Rising distrust surrounds established institutions like movie studios. People know they are not giving them what they want.
There is great potential still left for movie theatres. I live in a town that has a 623 seat movie theatre and often it fills to capacity. It is run with discipline and is highly reactive to the market. They ask people what they want to see. They do not gouge on concessions. Interaction and conversation is encouraged. It is like stepping back into a time machine. Crowds line up politely well in advance of the movie, they linger under the marquee and chat about the movie and the experience illuminated by the soft pulsating glow of running lights. People come time and time again.
Folks get value and in return they deeply value this aspect of their community.
People love going to the movies, the problems is that Hollywood does not seem to love the people who go to the movies. The movies today don’t speak well to an America culture or reality. They seem to be more concerned about appealing to a foreign master than the people who made them what they are.
Imagine if a movie like the original Hangover was released this summer. This situational comedy grabbed the attention of movie goers and did $277 million domestic box office. It told the story of a series of mishaps from a purely American perspective. Americans making movies for Americans sold the story. It also did $188 million in foreign. Globally, in all markets this film made three quarters of a billion dollars inclusive of DVD and television sales. The budget for this movie was $35 million, the majority of which went to pay for development costs and studio overhead. In my humble opinion about 10 million was seen on the screen.
In 1979, Meatballs, a million dollar Canadian summer camp movie, did $44 million in domestic box office. It starred a yet unknown Bill Murray and packed theatres across the continent, when movies were on average $2.50 admission. It was made by independents and found a place on screens across North America. Today it would be relegated to some some streaming service and would be quickly forgotten. As I scan the choices offered on Netflix and Amazon I see scores of movies that should have been seen on the big screen.
Let me share something with you that Hollywood does not want you to know. If fact they are deathly afraid that you are going to find this out yourselves. You do not need them.
There are many times in the history of the movies, when a movement of business independence occurred. The first one that comes to mind is the migration to Hollywood to avoid the legal maneuverings of the Motion Picture Patents Company head by the Edison Company, the next was the Paramount decree of 1948, then The Feature Motion Picture Fair Business Practices Law in 1980 (due to efforts of Marvin Troutman and other theatre operators in Pennsylvania.) . All of these events caused a deep change in the way the studios do business. And each case they were forced to change due to external pressures.
The rest of the world is rejecting the globalization trend which has gripped Hollywood. Hollywood is trying to find its way among Netflix , Amazon and other streaming services and is getting lost in the woods. They are quickly find out that as a market they are great for after theatrical releases or original productions (but that that’s about to see a deep decline) but as prime markets they do not provide ready revenue.
They need theatrical release in order to provide market awareness and a platform of value for titles that will enter the VOD market. Amazon gets it and gets it well. You need the theatres to attach the cachet of value on a film property. Any theatrical release will provide a movie with a multiple of earning potential as opposed to a release purely on a streaming platform. A theatrical release is the best commercial a movie can have. No theatrical release, then for Netflix rights in the UK and the USA go for about twenty thousand dollars. Pretty sad.
A proper window for movie’s release widens the want to see value and accelerates a greater buzz for release on streaming platforms. I have said it before I think that the shorter window has more to do with a studios 10Q (a quarterly stock market reporting requirement) than it does attaching value to a movie title. By insisting on at least 90 day theatrical window you are actually doing Hollywood a deep favor. Ask yourself a simple question; how does day and date assist in increasing a movies value, it doesn’t…. in fact it cheapens it. Theatre organizations are fighting tooth and nail to push back the tide of shrinking windows and they are losing. They are losing because organizations like AMC who should be leading the charge are playing ah shucks with the studios. They should be talking boycott instead they are being seduced for a share of the ancillary markets,
Amazon, one of the most thoughtful players in today’s business world understands the problems with shrinking windows and see the need for theatres. A deep need for theatres to be the foundation of of a motion picture ecosystem.
At this year’s Cannes Film Festival, Amazon’s Roy Price made the following statements about theatrical releases and the Amazon model.”I think customers appreciate the opportunity to see films in a cinema where you get a full theatrical experience, and we want to create that opportunity for customers. And also … a lot of people who became filmmakers they want people to have the opportunity to see their film as intended in the full experience. Whatever you may predict to happen six or seven years from now, theaters play an important role in the movie ecosystem now, so why not participate in that? “ He went on to say “Once the movie comes on the service having been in theaters, I think there is a perception that it’s a legit movie: It was reviewed, and it was in a theater — it’s like, a movie. It helps with customer perception, it helps with filmmakers, so we’re very supportive of the theatrical window.”
That comment of course was countered by Ted Sarandos Netflix Chief Content Officer who publicly stated that “Some people should get over the romantic notion of going to a theater” Ted does not get it and I think log term, Amazon will win out in the streaming game.
Although Amazon has bought and produced several films since 2015, like the Oscar-nominated Manchester by the Sea and this year’s Landline, it has always partnered with a studio for theatrical distribution in the past. Manchester by the Sea was distributed with help from Roadside Attractions; Landline was through Magnolia Pictures. This winter, Woody Allen’s Wonder Wheel is scheduled to open in theaters. It will be the first film by Amazon Studios released without the help of a distribution partner, The movie is about a carousel operator (Jim Belushi) and his wife (Kate Winslet) in 1950s Coney Island. The movie also stars Juno Temple as the couple’s daughter and Justin Timberlake as a lifeguard.
This move makes Amazon more similar to a traditional film studio than its streaming competitors like Netflix. Netflix has expressed mild interest in theatrical releases, with some movies receiving a limited theatrical run. But the company has been clear that its movies will continue to be released online simultaneously with theatrical opens, while Amazon has been more aggressive about getting its movies into theaters. Netflix’s model in my humble opinion is short sighted and will be short lived once they realize that by diminishing windows they too are diminished.
Netflix has been criticized by old-school industry types like director Christopher Nolan and the Cannes Film Festival for its release strategy. They argue that by bringing movies directly online, Netflix undermines what a theatrical release even means. In the meantime, Amazon, a massive company with its own streaming service, is now forgoing any help from traditional studios. I suggest strongly that organizations like NATO run not walk to Amazon and start building strategies for a recommittment to the classic theatrical windows.
This makes perfect sense to me. If the theatres can get Amazon to commit to a 90 day window prior to a prime release them I think that might begin a trend which if pushed and pushed hard could firmly re-instate a proper window. A window that will endure and not be subject to the whims of Hollywood’s confused stream of analysts. The studios need a wake up call quite frankly. In the past there would have been some judicial ruling that would have corrected the market, but several legal changes made during the Clinton and Reagan era put an end to that form of market correction. The best thing theatres should do is boycott movies that do not allow at least a 90 day window.
As the market constricting veil of the VPF’s is lifted, theatres will hopefully begin to realize that there are a vast amount of alternatives to programming. Innovative theatres will start to experiment with a mix of product and will find themselves doing better financially. The large chains will suffer, some will collapse but the real growth will be the independents and within them will be the salvation of the movie going experience. The structure of the American VPF was harmful and damaged this ecosystem horribly.
Ecosystems are damaged whenever species within the system are lost or habitat is destroyed. Because all species live in complex interdependent systems, the loss of any single species has negative consequences on others within the ecosystem. Hollywood has to be stopped because frankly I think they really do not have a clue and you will be saving them from themselves if you push back. Remind them in every which way possible this industry when it works well all flows from a healthy, diverse and robust theatrical market. I have seen the number produced by streaming and frankly I do not know why they are on this path to self destruction. Until they get their act together it’s probably best to avoid them.
I miss a business made up of showmen (and women). I miss a business that was guided by heart, instinct , and just knowing what your audience wanted….and of course the odd butt twitch.
There is hope and there is much opportunity. Think, Analyze, Remember…. Fight back
