Do fewer studio movies offer a big opportunity?

Feature Simon Brew 2 Dec 2013 - 06:53

The rise of Lionsgate and the decreasing number of big studio movies might just be shaking up the film marketplace...

Two different news stories relating to modern day blockbuster cinema have landed over the past two weeks, and each in their own way, I can't help but wondering if they mark a slight change in the way that big movies are going.

Firstly, it was revealed that Sony is scaling down the number of films that it's going to make. It's not the first studio to do this: Jeffrey Katzenberg once had Disney pushing for a release a week in the early 90s, and now its annual roster is well under 20. Every other major studio has pulled things back too, investing more and more on fewer and fewer films. And then, cleverly, releasing them all in roughly the same periods of the year.

For Sony, 2013 hasn't been easy. After Earth did decent money in spite of scathing reviews, but it wasn't a cheap film to make and market. The Smurfs 2, meanwhile, has fallen some way short of the half a billion dollars that the original took. Grown Ups 2? Didn't do badly, but Adam Sandler films rarely travel much outside of the US. Mainly because the whole rest of the planet is fed up to the back teeth of shit Adam Sandler films.

Elsewhere on Sony's slate? The hugely ambitious Elysium took a long time to come to the screen, but didn't match District 9 numbers (although it's a film we've got a lot of time for). This Is The End was profitable, although again, the vast bulk of its takings came in the US. Worldwide though, The Smurfs 2 - with $347m - it its top grossing film of the year, in 18th place globally at the time of writing.

Next year looks brighter for Sony certainly, not least because The Amazing Spider-Man 2 is locked and loaded for a summer release. 22 Jump Street is eagerly awaited, too.  But the studio has decided that there's more margin to be made in television rather than cinema, and has adjusted its plans accordingly. It's far from abandoning movies, just betting on a couple less each year. In doing so, it falls into line with many of its major rivals.

That's story one then. Story two: the extraordinary success of The Hunger Games: Catching Fire. With over $300m in the bank in under a week, and the sixth biggest opening weekend of all time in the US under its belt, it's comfortably one of the biggest blockbusters of the year. Thor: The Dark World's money people could only watch in awe as The Hunger Games trampled by. 

What's particularly of note, though, is that it's a huge, huge blockbuster, and not from an established, traditional major studio. Instead, it's come from Lionsgate, one of a bunch of distributors that's taken advantage of the majors' decreasing interest in making lots of films, and has since been tactically filling the schedules up with a bunch of more modestly priced productions.

It struck gold in the end too, with the Saw franchise. Even by the time it was up to films five, six and seven, it kept the price of the Saw movies under $10m. And even when the grosses dropped to the $50m-ish mark in the US, the films were making sizeable profits. Lionsgate was then savvy in how it marketed and pushed the films in home formats, and by applying a mix of savvy business and guerrilla tactics, a major movie house was constructed.

Buoyed by the Saw movies, and the revenues they were bringing in, Lionsgate pushed ahead with a merger with Summit Entertainment. The same Summit Entertainment that was still actively at work on the Twilight films. That's a deal that, ultimately, did Lionsgate's bank balance no harm.

Lionsgate built its business to the point where it was able to pick one very big blockbuster to make, and it chased hard for the rights to The Hunger Games. Even then, it didn't have the immediate funds to make it, trimming the budgets of lots of other projects it was working on to give director Gary Ross and his team the funds they needed to realise the film. Then, Lionsgate had to sink a similar amount again into promoting the film. It might be a cliche to say that someone bet the house on something, but had The Hunger Games failed, Lionsgate would be a very, very different business now.

Yet it didn't. And Lionsgate now finds itself in an interesting position. For the next two years, it's got a huge movie on its slate courtesy of its decision to take on the Hunger Games project, and the many correct decisions it took in doing so will bear fruit for the foreseeable future. It still deals with smaller horror titles, the kind that helped define its early days. But tellingly, the clanking horror-themeed logo of old has gone, to be replaced by something cleaner and broader. This year, it also scored another big hit, with Now You See Me. A sequel to that is already in the works. The Expendables 3 is lined up for next year, too.  

Lionsgate didn't exist in 1996, and now, it's effectively the closest we've got to another major. And it's jumped in the gap left behind by traditional movie studios looking to reduce their exposure. The big studios are still backing their marquee brands - Sony Classics, Fox Searchlight and such like - to hunt for hugely profitable low budget fare. But they've left a gap for mini-studios looking to spend $80m on a movie rather than $180m.

Lionsgate isn't alone. The Weinstein Company, Film District, Focus, Relativity, Open Road Films, Roadside Attractions and CBS Films have, between them, come up with Safe Haven, Olympus Has Fallen, Insidious Chapter 2, Silver Linings Playbook, Lee Daniels' The Butler, Django Unchained, A Haunted House and Last Vegas.

Some of those use studios for distribution, but they're each developing and funding their movies, and each of those films we've just mentioned grossed north of $40m in the US alone, off a far-less-than-movie-studio budget. They're not just making the movies, they're making profits from them.

As bigger studios reduce their output, they leave gaps in the release schedule that are being eagerly filled by smaller, leaner outfits. Earlier this year, Jerry Bruckheimer remarked to us about the difficulty in getting a $40m picture off the ground. The argument was that it's not cheap enough to take a punt on, but not expensive enough to be a major 'event'. The truth is that he's more than likely talking to the wrong people, because there's a growing number of firms spending just that level on increasingly prominent films.

Granted, marketing and marketing budgets are still where the studios dominate, and it'll be fascinating now to see whether Lionsgate adopts more of a studio feel or ensures its roots are still fully in tact. But either way, opportunities are opening up for the savvier operators, and the success of The Hunger Games, and the relative failure of The Smurfs 2, demonstrate the riches and risks involved.

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these budgets allow Lionsgate to be far more creative and make more interesting films. I hope they're paying attention to the history of Orion in the 80s

Just to correct you slightly, Elysium actually made slightly over 280 million while District 9 only made around 210 million. So even accounting for inflation Elysium did slightly better at the box office! Having said that District 9 is still the more successful film because of how much smaller its budget was.

I almost think the smaller budgets force the film-makers to be more inventive and visually creative in putting these films together. You can't just throw expensive special effects at the screen and expect it to make money - you need to carefully engage the audience.

Credit goes to the central performance quality in most of the films you mention too, without which we might have a different outcome. But even that needs careful casting and a quality director to translate the performances to film well.

What I know about a Lionsgate film: If the logo comes up before a film I've chosen to watch, 9 times out of 10 I will be entertained. Its all in knowing your audience and making choices. The big studios have a very narrow idea of success whereas, it seems, Lionsgate takes a much broader view. That, in the end, is a good thing for all of us that love the movies.

The Hunger Games is, in financial terms, an anomaly.

Lionsgate is a somewhat successful studio. But they also make Tyler Perry Movies.

And hugely profitable those movies are too.

Hmm, yes. I am seriously wondering how The Hunger Games 3.1 and 3.2 will do. The third book has the weakest story of the three and Lionsgate is going to split it up in two. Much unlike Harry Potter 7.1 and 7.2. Of course they can tweak the story and avoid the failures of the book and those who loved the first two movies will go to the third.

Marvel studios seems to be doing OK too. Individual movies such as Iron Man and Thor. Cross-character movies such as Avengers and cross-tv with Agents of SHIELD and the upcoming Netflix ones. That's without X-Men under Sony too.

It's what Paramount used to do with their Star Trek.

Other studios look on in envy and Warners and Sony are now trying to do this with DC properties with Batman vs Superman and Spiderman perhaps shoehorning Wonder Woman in, the much mooted Justice League movie and the Gordon tv series.

...And Carolco who had Terminator.

I actually enjoyed Harry Potter 7.2 and thought it was the best of the series.

Cannon, Carolco, Palace, Goldcrest, Film 4 and Orion were all independents that tried to take on the major studios and produce big budget films and were all sunk by one or two costly flops. Look how many big studios have had massive flop films trying to chase the teen market and fill the void that the Harry Potter films left. They've all bid for series of books and cancelled the remaining films when the box office expectations of the first films didn't meet expectations. Good luck to Lionsgate with The Hunger Games but lets see where they are in 10 years or so. As William Goldman once said about the film industry "Nobody knows anything!"

Or maybe we want creative blockbusters again like they had in the 70s unlike now where everything looks the same (cough, Marvel).

You mean the hugely profitable Tyler Perry movies? The ones that cater to a very specific group of people who are outright ignored by other studios, thereby cornering the market for Lionsgate?

Seems like a very sound business plan.

Alex Cross and Peeples failed.

Maybe if studios didn't spend so much on the marketing side of the big films, they'd be able to both make a profit and take more chances.

Also, considering a multi million dollar nature of blockbusters, you'd think they could afford to always employ a decent script writer.

Too many 'big' films aren't labours of love and that usually shines through, so it serves them right when it makes (relatively) little.

Alex Cross wasn't a Tyler Perry movie. Alex Cross was a movie that just happened to star Tyler Perry. It wasn't a movie that was written and marketed toward Black audiences.

Peebles is an anomaly in this instance.

I actually ment that Harry Potter 7 has one of the best stories of the series. That why I think it was justified to split the story over two movies. The Hunger Games 3 on the other hand should have enough time to tell its story in one movie.

Ah, but the Marvel Studios movies are supposed to look the same because they are in the same universe together. I see the Marvel Studios movies as a prelude to or a sequel to The Avengers movies.
Your argument would stand for The Dark Knight trilogy and Man of Steel, though.

I have a very soft spot for those studios. They were so cool churning out hits on tiny budgets.

The problem with the majors is that they spend all their money on a handful of gargantuan tentpole flicks a year in order for get them to to break a billion. A lot of them don't. Bruckheimer is spot on when he says it's harder to get a $40m movie made - look at everything made now. There's no middle ground. I can guarantee if they made five $20m films all from filmmakers doing it for the love of it, they'll make more than a single $100m movie. Marketing really needs to get better too with the middle ground films. It can be done, they just don't want to do it. It's easier to greenlight another comic book film.

I agree.

Swings and roundabouts. All it takes is a another blair witch film (I mean shot for nothing and made £250 million) and lionsgate to have a couple fo flops. I'm sure there is a cycle as with most things. The CGI blockbuster is another people will get tired of these films and start looking for something more intimate again.

I agree Laura. How many reiterations of the same story are we supposed to take. I turned Ironman 3 off as its more of the same. After watching gravity it is easy to make a good film without its protagonist having superpowers. I feel Hollywood is fgetting lazy and thats why people aren't watching the films as we've seen them hundreds of times before.

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