The movie industry bloodbath has begun

I’m often rather loudly complaining around here about the devaluation of entertainment products brought about by the internet. This is partly because the internet engenders piracy, but also because piracy itself engenders creators to offer their work for free (because it’s probably going to end up available for free anyway.) The result is the destructions of big chunks of the entertainment industry.

We’ve primarily seen this in the music business. But it stands to reason that as movies become more downloadable, the same thing could happen there. According to this excerpt from a book by screenwriter Lynda Obst, it is.

I leaned back a little on Peter’s comfortable couch, and he sat forward to say, “People will look back and say that probably, from a financial point of view, 1995 through 2005 was the golden age of this generation of the movie business. You had big growth internationally, and you had big growth with DVDs.” He paused to allow a gallows laugh. “That golden age appears to be over.”

“The DVD business represented fifty percent of their profits,” he went on. “Fifty percent. The decline of that business means their entire profit could come down between forty and fifty percent for new movies.”

For those of you like me who are not good at math, let me make Peter’s statement even simpler. If a studio’s margin of profit was only 10 percent in the Old Abnormal, now with the collapsing DVD market that profit margin was hovering around 6 percent. The loss of profit on those little silver discs had nearly halved our profit margin.

This was, literally, a Great Contraction. Something drastic had happened to our industry, and this was it. Surely there were other factors: Young males were disappearing into video games; there were hundreds of home entertainment choices available for nesting families; the Net. But slicing a huge chunk of reliable profits right out of the bottom line forever?

There it was. Technology had destroyed the DVD. When Peter referred to the “transition of the DVD market,” and technology destroying the DVD, he was talking about the implications of the fact that our movies were now proliferating for free—not just on the streets of Beijing and Hong Kong and Rio. And even legitimate users, as Peter pointed out, who would never pirate, were going for $3 or $4 video-on-demand (VOD) rentals instead of $15 DVD purchases.

Frankly, I never understood why people paid 15 bucks to own a DVD movie but I guess they’ve come to their senses on that one. Netflix is probably a big reason for that as you can essentially buy a huge streaming dvd collection for 7 bucks a month.

So what does this collapse mean in terms of movie quality? I think Obst’s article ties into an article I wrote a while back about the noticeable decline in the quality of current film’s stories. I used the blockbuster “WWZ” as an example.

On top of that, “World War Z” was just poorly written. There’s was no sense of ratcheting tension, no sense of real danger. The hallmark of the great horror films is that some of the characters—sometimes characters you really love—get killed. (Even “Shaun of the Dead,” which was something of a horror satire, got this.) Nobody you like in “WWZ” dies. (This is partly because you don’t like any of the characters but that’s another complaint.) And unlike the book, the movie “WWZ” is devoid of clever plot twists. The main conceit of the film—the means by which Pitt formulates a way of stopping the zombies—barely generates a “meh.”

“World War Z” had the sense of being written by committee. When a story is written this way, any interesting proposed plot twist (say, killing a key character, or having a likeable character betray the group) is bound to upset someone in the room. If everyone working on the story is granted veto power, all life gets sucked of a tale.

To quote Obst:

[The studios are] frozen, so the gut is frozen, the heart is frozen, and even the bottom-line spreadsheet is frozen. It was like a cold shower in hard numbers. There was none of the extra cash that fueled competitive commerce, gut calls, or real movies, the extra spec script purchase, the pitch culture, the grease that fueled the Old Abnormal: the way things had always been done. We were running on empty, searching for sources of new revenue. The only reliable entry on the P&L was international. That’s where the moolah was coming from, so that’s what decisions would be based on.

Gut calls are part of what lead to interesting, innovative movies. And deference to the international market means you have to dumb content down for non-English speakers and those who may not get the nuances of certain kinds of storytelling.

As I mention in my article, I think cheap horror flicks are still willing to take risks, as they always have. But I’m curious as to whether they are making any money.

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