Movie Business Scrambles to Adapt to Changing Consumer Demand | Hacker News Reader

Movie Business Scrambles to Adapt to Changing Consumer Demand

variety.com

45 pointswalterbell59 comments

The proposal: "Premium video rental", at $30 - $50. Right. When VHS first came out, the movie industry thought that a video rental should cost about as much as a theater show for a family of 4, including popcorn. That didn't work, although the reason was the First Sale Doctrine, which allowed video rental without payments to studios and forced prices down. That doesn't apply online, and all the players are now huge near-monopolies. They can push prices up, but can't make people watch.

3D was supposed to save theaters. It didn't. (Incidentally, while "Ghost in the Shell" is reasonably good, don't see it in 3D. The director likes blurry backgrounds. 3D has negative value for blurry backgrounds.)

Lack of originality remains a big problem. "Four of the top 10 highest grossing films last year were based on Marvel or DC Comics characters." In theaters now, the Lego Batman movie. There are currently 69 more comic book movies in the pipeline.[1] Even the duds, such as Ant-Man, are getting sequels. Variety says consumers may be getting tired of comic book movies.

Some original ideas do make big money. Last year, "The Secret Life of Pets" — $875.4 million, "Zootopia" — $1.023 billion, "Finding Dory" — $1.027 billion, were in the top 10. They're all animated. Not one of the top 10 highest grossing movies of 2016 was a live-action non-sequel/remake. Maybe originality now requires a longer format than the one-off film. Consider Game of Thrones.

Meanwhile, I'm watching Korean drama and Japanese anime.

[1] http://www.denofgeek.com/uk/movies/comic-book-adaptations/32...

"Finding Dory" is a sequel.

> The proposal: "Premium video rental", at $30 - $50.

Indeed. On first glance. But do the math the other way round: On average n point m people per household (depending on where you live); all of the family would go to a theatre and they'd have to buy a ticket for each. Does your math still check out?

On a second glance that actually looks like producers understood that they can only beat piracy by providing a better or at least equivalent service (i.e.: acceptable quality worldwide a few weeks after official release to theatres in launch countries).

And even for $50: They got me! Invite friends, heat up the projector, get beer & chips, make guacamole and let's go!

"Not one of the top 10 highest grossing movies of 2016 was a live-action non-sequel/remake."

Actually 1 was: Suicide Squad. It was indeed a live-action non-sequel/remake.

It was, though, based on a comic book.

> Maybe originality now requires a longer format than the one-off film. Consider Game of Thrones.

Not necessarily, see "Black mirror" :)

Anime isnt different. Different tropes same tropes.

Deviations are too risky for studios and they all want to be picked up by America where possible

This doesn't surprise me. With all the good jobs drying up and wages decreasing, young people can't afford to go to the theater when the price of attending has been going up. On top of that, it seems like most big movies are formulaic, following the same pattern and not eliciting anything more than mild amusement. It's just not worth it anymore.

For younger people, restaurants have taken budget away from movies and clothes. Wages aren't a factor. It's true that movie prices have increased, but it's not a significant rate of inflation compared to food.

That's an interesting idea. Do you have any data on this? I could believe that some money that would have previously gone to movies is now going to food, but I find it hard to believe that lower inflation adjusted income wouldn't impact movie sales.

Sure, there are lots of links on Google. Here's one about teens showing restaurant spending increasing significantly and media spending (and some others dropping): http://www.businessinsider.com/how-teens-are-spending-money-...

This report suggests if wages are falling, the auto category is taking the most significant hit. Discretionary spending (both restaurants and movies) stays steady or increases (the PDF has much more detail): http://home.isr.umich.edu/releases/how-teen-workers-spend-th...

This suggests the 2008 recession did change habits, but notes that movies are the only public/external recreation service that's suffered. It blames home viewing being a good enough cheap alternative: http://www.nbcnews.com/business/economy/how-recession-change...

So there are a few different slices that hopefully help isolate the problem for theaters that just as much or more is being spent on recreation, but it's being spent differently.

> home viewing being a good enough cheap alternative. So giving them a lot of options at home is killing going out to the movies? Makes sense. In the ol' days cable TV was like 6 channels. So kids HAD to go outside and do stuff (play).

What do teen kids even do these days? I'm older. We had skateboard parks, video arcades, roller skating, community centers, the mall, mini golf, go kart tracks, cheap movies, etc.

I don't believe any of those are socially acceptable for teens now. These things are either gone, or only used by younger-than-teens. I guess they just hang out at each other's homes?

All of those things still exist (except cheap movies), and people still do them. I think you're just assuming that teenagers all did what you did and that teenagers now just do what all other teenagers do. But as it turns out, teenagers are people with vastly differing interests, and they don't all fit one mold.

>All of those things still exist (except cheap movies), and people still do them.

Yes and no. Video arcades, for example, are not ubiquitous the way they used to be. Similar for rolling skating rinks.

> I think you're just assuming that teenagers all did what you did

That's an odd takeaway. I'm noting, for example, roller skating was highly popular with teenagers. Maybe not all, but many. If you went to a roller skating rink on Friday night, it was filled with them. That's not the case now.

I've been wondering the same thing. In my city the malls are not what they used to be, and I don't see the kids there much, now.

We only have one roller skate rink left, and I haven't seen a busy parking lot in front for years.

Arcades here are gone, and the theaters aren't as busy as they once were (I think... I rarely go anymore. I might be wrong, there.)

Local skate park looks empty a lot, too.

Yeah... where are they? Gaming indoors?

For some reason, downtown Redwood City, CA has a downtown that works. There's a big open plaza in front of the old courthouse, where the city sometimes shows free movies or has other events. There's a 20-theater multiplex. There's a theater that runs local productions of musicals ("The Producers" closes tomorrow) and cover bands for old rock groups. There's a little space that has jazz and blues. There's a live theater space which runs Asian productions. There's a nightclub. There are about a dozen modestly priced restaurants. All this is in an area about 500 feet square. It's a warm Saturday night, and it's probably full of teenagers right now.

It took about 10 years for this to start working. For years after the theater multiplex was built, few people came. Then, somehow, it started working as a public space.

Only one data point (well, 3) but one of my parents remarried and I have 3 half siblings 15y-19y old. They pretty much just eat out every time they go out with friends, and are obsessed with finding new places to eat out and share online. "Instaburgers" (burgers made entirely look good on Instagram/Snapchat)) anduff like that. Otherwise they hang at home with friends or at friends places, and go to beach a lot (they don't live near a beach, it's a day trip).

I don't think I've ever heard of them doing ANY of the stuff we did as kids. No arcades, skate parks, parks in general, and movies are once a year, maybe twice. They mostly get their content legally online (Netflix, iTunes, etc). None pirate or know how. None do any "geek" stuff either. Tech is purely for media and games.

> We had skateboard parks, video arcades, roller skating, community centers, the mall, mini golf, go kart tracks, cheap movies, etc.

> I don't believe any of those are socially acceptable for teens now.

Really? Can you elaborate on this? The teen family members I have would happily do all or most of these.

Just my experience, in several different places in the US, going to these kinds of places with my kids.

Some of them are still popular, just not with teens...the kids are younger.

I believe there are some places that are different. But the decline of skating rinks, arcades, and malls in popularity is pretty well documented.

This article has some data: https://qz.com/197740/american-teens-dont-hang-out-at-malls-...

What do teen kids even do these days?

Homework.

I've noticed that compared to my own teen years, my kids are deluged with homework. Much of it is good stuff. For instance they've been writing substantive essays and papers since middle school, whereas I did very little writing while in school. But there's a lot of it.

Second is surfing the web and interacting with friends via their phones.

> On top of that, it seems like most big movies are formulaic, following the same pattern and not eliciting anything more than mild amusement

Yeah. The problem is that studios have gone risk-averse. A movie production can run way up to 250-300M US$ in budget plus promotion costs (earlier movies had analog reproduction and logistic costs, too, but most cinemas are digital now which has basically no distribution cost). So they tend to stick to either sequels or adaptations of popular comics, to reduce the risk of having to shoulder a 250M $ loss.

The same mindset exists in the cinema industry: either fill your screens with "blockbuster" movies and have an okay-ish visitor count, or risk having a couple indie films which gather no audience.

In old times, there was stuff like the German "Filmförderungsanstalt" (roughly translated to "movie subvention agency") which provided subventions and financial help to all parts of the chain - from production to distribution. But with costs increasing (labor, advertising, and especially the extremely expensive switch to digital), subventions don't have the same impact on production cost to also make indie films viable.

(Exceptions like Iron Sky proving the general rule)

This is why I don't watch current/recent Hollywood movies. There still are some good foreign and indie films being made, and I find I don't mind the lower production values after getting used to it.

(I'm a native American English speaker, and I had to look up "subvention". I think "subsidy" would be a better translation.)

> There still are some good foreign and indie films being made, and I find I don't mind the lower production values after getting used to it.

Funny thing is, stuff like Sharknado sucks when compared on the visual effects, but it's at least an original story compared to all the stuff currently in cinemas.

> (I'm a native American English speaker, and I had to look up "subvention". I think "subsidy" would be a better translation.)

I'm a German, thanks for the hint :)

Hollywood seems content to continue milking comic books and lately anime for storylines instead of coming up with anything original and then applying the same, cliched formula.

I can't wait for the demise of this system so that we can see fresh, original approaches to film-making where the starring actor/actress is the biggest expense.

Did they learn the lesson from the music industry? Namely, not to attack the consumer as the cause of its downfall before it was eventually swallowed up by a tech company (Apple). Perhaps if they transition graciously, Amazon or other firms will offer them a better deal. Or, preferably, they take the route used by Veronica Mars by getting funding through kickstarter, indiegogo or some other fundraising platform. This way, maybe fans won't be severely disappointed and movie adaptations of popular franchises aren't dumbed down and white-washed to appeal to as broad an audience as possible.

And, yes, I'm a bit upset after seeing the treatment Ghost in the Shell, one of my favorite franchises, received. Akira and Cowboy Bebop are next, but I actually like Jordan Peele and Keanu Reeves so I'm crossing my fingers.

I think there are still lots of fresh, original movies being made, but they tend to get a bit drowned out by the marketing for all those comic book movies, bad reboots, and whatever Fast/Furious movie is about to come out, so it is easy to think that those are the only things being made.

I'm less bothered by the fact that they are still churning out marvel movies at the same rate than I am at how difficult it is to avoid them.

Here's Lynda Obst explaining why we're seeing current crap movies (Marvel and alike) predominantly from Hollywood https://www.youtube.com/watch?v=t_oHW31jQfg That's not your average reader/analyst, but someone who knows what they're talking about. It works too, so I wouldn't bet on it disappearing too soon. I think they will, and when they do there will be a spectacular crash as it's a spectacular business success right now.

I think part of the problem is that the cost to produce a movie is so expensive and the risk of creating a new story/IP is large enough that few studios are willing to take that chance. Pixar is one of the few.

How can movie production be costly, at least in comparison to decades past? No film, no processing, no laborious cutting/splicing.... with CGI no model-making, much less set-building, no stop-motion, no special frame-by-frame retouching. Must be much cheaper today at least in terms of the infrasturcture required.

The rise in salaries of the "superstars", those who are at the top of their field. In this case actors, the the same phenomenon is seen in Wall St pros, professional sports players, musicians, etc.

Watch the credits of thousands of animators and technicians at the end of any major animation project. Yes, you can now put anything on screen, but somebody has to create all that detail.

The costs of some things have indeed plummeted. It still costs a lot of money to eg. close off city streets, hire cranes, ensure 200 cast and crew are in the right places at the right times with the right skills and equipment. Also marketing is typically a huge chunk of the cost involved.

Btw lots of frame-by-frame retouching happens on modern movies. Doing decent VFX is extremely laborious.

> formulaic

It actually is a formula:

http://www.slate.com/articles/arts/culturebox/2013/07/hollyw...

I see two things they can change to improve.

- Make going to the movies more of an event. Alamo Drafthouse understands this. Don't tolerate disturbances. Sell food and alcohol. Don't run ads for the local mattress store before the film.

- Price B movies lower than tentpole releases. Guardians of the Galaxy I'll gladly pay $10-12 for. Some romantic comedy that will quickly be forgotten and the studio only spent $30 million on ought to be priced less.

So your plan is to price movie tickets in accordance with their production budget? That's a great way to select for lower quality.

It seems smart to me. It can get people into the habit of going to see a movie as a minor event, instead of saving for only a couple movies a year.

That's only one indicator of it's potential quality. You can also judge (and price) a film by the caliber of actors in it.

But sometimes that doesn't work - Kevin Spacey, Jennifer Garner, and Christopher Walken -- should be a total winner, right? Not always...

https://www.rottentomatoes.com/m/nine_lives_2016

> Don't run ads for the local mattress store before the film.

I had never come across this type of ad in the movie theater until I started going to local theaters. For decades I was going only to Big Mega-Chain theaters because they were the only ones available -- and none of them ran local ads.

I just lost interest in virtually all movies in my mid twenties. They're too short, too alike, to predictable and frankly boring most of the time. There are very very occasional exceptions, but for me, movies just stopped being entertaining at some point. I don't know if movies changed, or I did.

A friend of mine and I marathoned two seasons of Game of Thrones; that was by far a better experience than any movie has ever provided. Movies are the abridged books of the audiovisual world, in my opinion, with some notable exceptions. Those exceptions seem (to me at least) to be getting incredibly rare compared to the deafening background noise of cynical money grabs, re-makes, sequels, and highly compressed storytelling bolstered with sfx.

What I'm saying is, if I'm not just some oddity in this (and I don't think that I am) then over time people are just going to mostly outgrow movies. It's not that movies are pro tanto bad, it's just that most movies don't play to the strengths of the medium; they exist as remnants of a time when the options were: Book, Broadcast TV, Movie. Frankly, the writing has been on the wall since 'The Sopranos', DVR brought closer, and Streaming means it's actually here, now.

There is definitely a place for movies, but I think a lot of people really enjoy longer spanning series. In the past TV shows were largely episodic in format and with lower production values compared to movies. But now there is less of a difference in the quality of the medium and the difference becomes long va short format. There are definitely some stories that are best told in one brief sitting, but there is a large market for longer running storylines that you can consume an hour at a time, or binge all day.

Great point about the Sopranos and how that was a forerunner to these successful shows that act as today's benchmarks.

I prefer movies, over this stretched story arc that is quite common with series. To meet the goal a few episodes of each season are just filler with little going on. I don't want to waste my time watching TV series. I would prefer movies, but not the boring super hero recycling movies of late but high quality good 1990s style action and comedy movies that rarely get produced.

One of the few series I completely watch is "Silicon Valley", though it also contains some fillers, but at least the series is satire and funny.

What's with the comic book movie hate? Most of the Marvel ones are pretty good.

I'd say the one exception is the soundtracks. Movies used to have memorable soundtracks. Nowadays the soundtracks are pretty boring. They use a process of filming using another movies soundtrack nowadays and then going back and recording a soundtrack afterwards. It makes movies sound the same. It's cheaper to make but it makes the movie going experience cheaper too. It reduces one of the best parts of going to the theater, the sound system.

I'm pretty sure that Marvel used the soundtrack to Mad Max for the filming Winter Soldier and then went out and recorded for the winter soldier.

Tony Zhou did a video about this: https://www.youtube.com/watch?v=7vfqkvwW2fs

Because a soundtrack that is effectively "computer looped" is cheap and easy to edit into the film. Thus lots of short staccato instruments and lots of percussion.

A soundtrack that is melodic requires a lot of effort to edit in, and may require you to go hire musicians if you just can't quite make it work. Or, you may have to wipe the soundtrack completely (cf. Chinatown) and start from scratch for a lot of money.

If you are making a film, which one are you gonna do?

    There is a belief, accepted as dogma in some studio
    boardrooms, that streaming services like Netflix have
    conditioned consumers to access content whenever and
    wherever they would like it.

Huh. Boardrooms doing dogma about customer preferences, in 2017, eh?

Makes me think of a very silly kids' book from a few years back. The title was The Stupids Die.

If the multiplex movie theaters can't come up with ways to measure customer preferences and insist on relying on preconceived notions, investors should simply abandon them.

I think what is also broken, and surprisingly not mentioned, is the broken theatre licensing model that the large studios impose on theatres to be able to show their blockbusters. Blockbusters are sold in packages that require a certain number of screenings throughout the day as well as mandatory screening of their B grade movies also. Theatres aren't free to just show what they want, when they want, and pay per screening fees. Innovation here would help create more intimacy in local movie theatre communities and also mean crap doesn't get screen time just because it's from a big studio.

I have so many entertainment choices at home. I can't imagine ever paying $30 or more! for a movie.

My wife and I go frequently to our local movie theater, even though our small town multi-theater lacks some of the tech available in large cities. Sitting in a theater with a few hundred people all enjoying a movie is a positive human experience. At home we cut out cable TV and have so much good content available on Netflix, Hulu Prime, and HBO Now that we don't need anything else.

I think the interesting story is many more smaller productions done by Netflix, Amazon, Hulu, HBO, etc. It almost feels like genetic algorithm optimization - running lots of small experiments, measure viewers, and repeat...

We live in Sedona Arizona and every year we have a fairly large film festival (for a small town), and getting to meet and hear from directors and producers of lower budget productions is more than interesting.

Working on games for Nintendo and VR for Disney in the 1990s provided a view to very well funded development. I think a lot has changed, and lowering costs producing content is much more important.

I personally think that there's a new way. On Kickstarter, Arrowstorm Entertainment regularly launches new campaigns for movies. One of the more succesful ones is a fantasy movie series called Mythica, already at part 5: https://www.kickstarter.com/projects/arrowstorm/mythica-5-th...

One of the more recent ones is 626 Evolution, a science fiction movie: https://www.kickstarter.com/projects/arrowstorm/626-evolutio...

These are low budget movies aimed at a specific crowd. You join in for $15 or more. I love them.

The first 2 films in this series recruited about $80K. How is that enough for producing a movie ? does anybody know how their business model works?

In general when features get made for that kind of money, it means the production values are low and everybody is working for nothing or low rates in the hope it'll help them get paid work in future. It's shockingly easy to find film crew who'll work for free.

This is true. And also because there's nothing quite like working on a movie. Some of my fondest memories are of working on various film and TV shows in a wide variety of capacities.

You can make a feature very cheap but it's difficult to make a profit on it, plus there's a big trade-off between the quality of work you get if you pay or not. Film people help each other out for free frequently cause they're artists, but sadly the model for micro- and no-budget films has shrunk by about half over the last 15 years, so it's very difficult to make a living on small projects compared to even a decade ago.

The production values are quite good,at least according to promos , that's what's surprising about this.

It's absolutely doable on a small budget. The tricky part is bootstrapping that to get to a higher budget. When you produce a great product at a low budget there's some pressure to promote the cheapness/economy angle as a selling point. But as you go for a higher level of quality, whether technical or aesthetic, the costs don't scale linearly with the budget. So above a certain budget you might come under pressure to sign industry agreements on guild membership or labor contracts in order to be able to hire the people you want, so the financial calculus changes.

I'll believe it when someone raises a realistic budget, on a regular basis. For TV episodes that's $2-3 million per episode and two to three times as much for a pilot and for a 'low budget' movie it's $20 million. Ultra low budget and indies aren't what we're talking about though. Same with games - I can't remember, but wasn't Star Citizen only one that raised enough funds to be considered AAA? It's a different business model too. TV and Film business is vastly complicated area.

Adapt? Really? It doesn't seem so. They are in their own world, and don't care.

But no wonder when you read about the crazy head of Sony Pictures, the woman that got kicked because of the scandals that got made public (emails leaked). For example we can "thank" her for that the Steve Jobs movie lost the The Social Network director and is now such a boring piece of movie.

We don't need hundreds of super hero movies, such a mass is stupid. Where are the funny movies, the action movies, the adventure movies? We want less CGI and more real action, or CGI looking like real action.

We want movies not boring hour long series, we have no time to waste hours for a stretched story arc.

The Accountant, (second half of) Bourne 2016, Jack Reacher 2, Mission Impossible Rogue Nation ... were good movies. But it gets harder and harder to find a few movies per year that are watchable. The last two X-Men movies were so bad, so many CGI effects, so dark, so little content that made the previous X-Men movies great. Were are the Die Hard 1-2, Air Force One, first three Tom Clancy movies of this decade - right, directors and script writers forgot how to pace a movie, as constant action is just wrong, you need intense action then calm situations and then action again and a bit humour does't hurt (something almost completely forgotten). I just saw a 1968 action movie and it was so much better (Steven Spielberg mentioned it's his favourite movie he sees up to), this decades Hollywood is in a sad state.

For Hollywood movies, I only do matinees. Frack paying $20+ for a single ticket. At that price point, if the movie sucks, it generates massive butthurt. These days I only go to a nighttime movie if somebody I like wants me there. Maybe 2 a year?

Art house tickets are like 5-10 bucks on smaller screens. I can buy pizza and beer at these places. There is a narrow table to hold my pizza and beer. This is my price point for a nighttime movie.

Good luck to Hollywood at those dollars.

Would be interesting if theaters find a way to reduce audience interference while still capturing the audience atmosphere. The last couple of outings have had me sit next to people playing with phones or talking during the movie.

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