The Big Picture

1. The Rise of Franchise Films Transformed Hollywood's Business Model

"The dawn of the franchise film era is the most meaningful revolution in the movie business since the studio system ended, in the 1950s."

Franchise dominance: The 2010s saw a dramatic shift in Hollywood's approach to filmmaking. Studios increasingly focused on creating and expanding cinematic universes based on popular intellectual properties. This strategy aimed to produce reliable box office hits and generate ancillary revenue through merchandise, theme park attractions, and other tie-ins.

Risk reduction: Franchise films became the preferred business model because they offered:

• Built-in audience awareness
• Global appeal
• Merchandising opportunities
• Potential for multiple sequels and spin-offs

However, this shift also led to:

• Reduced diversity in theatrical releases
• Fewer opportunities for original, mid-budget films
• Increased pressure on non-franchise films to perform

2. Streaming Services Disrupted Traditional Movie Distribution

"Netflix and Amazon emerged as major players in film production, offering a new home for mid-budget and indie films that traditional studios were increasingly reluctant to make."

Changing viewing habits: The rise of streaming platforms like Netflix and Amazon Prime Video fundamentally altered how audiences consume content. This shift challenged the traditional theatrical release model and forced studios to reconsider their distribution strategies.

Impact on the industry:

• Shortened theatrical windows
• Increased competition for audience attention
• New opportunities for filmmakers and diverse content
• Blurring lines between film and television

Streaming services also began producing their own original films, often attracting A-list talent and competing directly with traditional studios for both audience share and industry prestige.

3. China's Growing Influence Reshaped Hollywood's Global Strategy

"China was now a major, fast-growing source of revenue, and as DVD sales plummeted, studios increasingly focused on it."

Market expansion: As China's economy boomed and its middle class grew, it became the second-largest box office market in the world. This rapid growth led Hollywood studios to prioritize the Chinese market in their global strategies.

Adapting to Chinese preferences:

• Increased focus on spectacle and visual effects
• Inclusion of Chinese elements and actors in major productions
• Self-censorship to avoid offending Chinese regulators

However, this focus on China also led to concerns about creative compromise and Hollywood's increasing dependence on a market controlled by a authoritarian government.

4. The Decline of Mid-Budget Films and Rise of Tentpole Productions

"Left alone, the economic forces of the film business will generate only reboots, sequels, and spinoffs with as little originality, risk taking, and interesting ideas as possible."

Polarization of budgets: The 2010s saw a widening gap between high-budget tentpole films and low-budget indie productions, with fewer mid-budget movies being made.

Reasons for this shift:

• Declining DVD sales eliminated a key revenue stream for mid-budget films
• Increased competition from high-quality television and streaming content
• Global box office favoring spectacle-driven blockbusters

Consequences:

• Fewer opportunities for original scripts and new talent
• Reduced diversity in theatrical offerings
• Increased pressure on every release to be a massive hit

5. Netflix and Amazon Emerged as Major Players in Film Production

"Amazon left the Sundance festival in 2016 with four movies, which together with other acquisitions gave it a lineup of more than a dozen pictures that year alone."

Disrupting the status quo: Streaming giants Netflix and Amazon entered the film production and distribution space with significant financial resources and a willingness to take risks on projects traditional studios were passing on.

Key strategies:

• Aggressive acquisition of indie films at festivals
• Production of original content with A-list talent
• Flexible release strategies combining limited theatrical runs with streaming premieres

Impact on the industry:

• New opportunities for filmmakers and diverse stories
• Increased competition for talent and projects
• Challenges to traditional distribution models and award show eligibility rules

6. Sony Pictures' Struggles Exemplified Hollywood's Changing Landscape

"Sony essentially had three major franchises: James Bond, Men in Black, and Spider-Man, all of which came with baggage from bad decisions in the past."

Adapting to change: Sony Pictures' difficulties in the 2010s illustrated the challenges faced by traditional studios in adapting to the new realities of the film industry.

Key issues:

• Lack of strong franchise properties compared to competitors
• Overreliance on star-driven vehicles in a franchise-dominated market
• Struggles to compete in the growing international market, particularly China

The studio's efforts to turn things around, including leadership changes and attempts to build new franchises, highlighted the industry-wide scramble to find a sustainable business model in the face of rapidly changing audience preferences and distribution channels.

7. The Future of Cinema: Balancing Theatrical and Streaming Releases

"Are they still movies, though, if more than 99 percent of the people who watch them don't do so in a movie theater? Who cares."

Evolving definitions: As streaming becomes increasingly dominant, the industry is grappling with fundamental questions about what constitutes a "movie" and how to balance theatrical and digital releases.

Key considerations:

• Preserving the theatrical experience for event films and spectacles
• Utilizing streaming for mid-budget and niche content
• Adapting award shows and industry recognition to include streaming releases

The future of cinema likely involves:

• Shorter theatrical windows
• Simultaneous theatrical and streaming releases for some films
• Increased flexibility in release strategies based on individual film characteristics

This new landscape presents both challenges and opportunities for filmmakers, studios, and audiences as the industry continues to evolve.

Last updated: November 19, 2024