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Risky Business: The No-Win Scenario of Entertainment Economics

By Derek May:

Hollywood seems to be striking out. You can take that at face value in reference to the two major ongoing strikes by the Writer’s Guild of America (WGA) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), but it goes much, much further than that. Artists are unable to push new ideas. Blockbusters are flaming out while simultaneously overwhelming independent films. Content is being shelved for tax write-offs. Internet trolls are killing entertainment before it’s even released. And audiences are being treated half the time like enemies in a war for dominance rather than partners in a symbiotic relationship.

It unclear where things may go from here, but one this is indisputable: they can’t continue like this.

For real change to happen, we need to dig into the root cause, and I don’t just mean assigning blame. There’s enough of that happening now.

The WGA and SAG-AFTRA are blaming producers and streamers. Audiences are blaming the lot of them. Investors are blaming the economy and the pandemic. There’s truth in all of it, and it’ll take the village to fix.

The true culprit here may be change itself. Making art has never been easy, but during the past 100 years of film and television, we’ve seen access expand exponentially through theatres, to television, to the VCR, and finally to the internet and streaming. Entertainment is able to reach more people now than ever—and yet the playing field has shrunk dramatically. The theory is that with a diverse pool of eager consumers there’s now room for infinitely more diverse content; everyone now gets a chance to play. But while there is certainly truth to that, the opposite has also manifested. The battle to pull as many eyes (and dollars) as possible toward YOUR thing has become a compulsion that’s created an unsustainable Catch-22 for much of Hollywood: spend more and more money on something, and thus require more and more money in return.

That mentality has driven production costs to astronomical levels. A season of television may cost up to half a billion dollars. Movies routinely cost $300–$500 million, not including marketing. It takes a spider-web of investors to fund such projects, and they don’t just want their money back; like any business, they are looking for a profit.

Adding to this is the worldwide continuous restriction of time. Long-term strategies are condensed to 5-year plans at the outmost. Instant gratification isn’t just a demand by consumers, it’s coming from producers, too. This means that any project that doesn’t meet or exceed expectations immediately is considered a bust. And whereas “immediately” in film once meant opening week, that has whittled down to opening weekend, then to opening day, then even to freakin’ preview night. In television, you’re lucky to get a full season (even these now-typical shorter seasons); most of the time you get a few episodes to break through.

If you don’t kill it with the first shot, you’re the one who’s dead.

Our current summer movie season is the best case study you’ll find. For example, both pre and post release, Mission: Impossible—Dead Reckoning, Part 1 has had some of the best reviews of the series. But having been out for just over two weeks at the time of this writing (just two weeks), the film that has grossed around $380 million worldwide is being largely considered a bust. How can that be? Well, it starts with the $290 million production cost that ballooned because of pandemic and other delays. (Add another $100 million easy in marketing costs.) But surely, even with that, it seems on track to finish its theatrical run in the black, right? After all, Rotten Tomatoes shows a listing of 96% fresh with a 94% audience score, so people are enjoying it. But they may not get the chance. This weekend the film will lose 1,130 screens across the U.S., a penalty for not doing Top Gun: Maverick–level box office. Similarly, Indiana Jones and the Dial of Destiny has been out for barely a month and it’s all but vanished from most theatres.

The current market offers no room for development. No time for growth. No chance for repeat business outside, say, the first week. So much new content is constantly coming down the pike, it’s blink and you missed it. Gone are the days when a summer season meant taking your time to savor and enjoy the myriad of films available to all tastes. Imagine if you had only a week or two to catch Ghostbusters, Gremlins, The Karate Kid, The Natural, Romancing the Stone, Police Academy, Indiana Jones and the Temple of Doom, and more in summer 1984. How many of those do you think would have become the classics they are now?

On the other hand, this year’s Barbie movie has had both strong scores (89% critic and 86% audience) and has taken in over $500 million in just its first week! But we have to be careful not to look at this accomplishment in a vacuum. While the film owes a large chunk of its success to simply being good, no one could have predicted the self-driving marketing juggernaut that emerged as Barbenheimer. The unique storm of two polar-opposite films (Barbie and Oppenheimer), both relative underdogs (unlike MI:7) with arguably niche audiences, thrown together as something of an internet joke has rocketed both films beyond expectations. It’s a unique demonstration of how audiences still have the power to make or break films, even if that power is somewhat subversive in origin.

In contrast, however, is The Flash. Like Mission: Impossible, the audience and critical buzz going in was through the roof. People were calling it one of the best superhero movies of all time. Seriously! And the film IS good. I have yet to encounter a real audience member (not a critic or troll) who claims otherwise. And yet, it is being berated as one of the biggest commercial bombs in recent memory. Why?

We can blame Ezra Miller’s numerous off-screen troubles, or the notably poor use of CGI, or the fact that James Gunn declared the end of this incarnation of the characters going forward, leaving audiences with little incentive to watch. All of these are legitimate causes. But I’ve noted one other that speaks to a larger issue: the internet just collectively decided it was a bomb. After the initial weekend release, every media outlet reported the same story hammering the film’s lukewarm debut. And from there, social media took that opinion viral. Suddenly, a film that was considered universally excellent but with its troubles was dead in the water. And this comment was repeated ad nauseum across the digital landscape. And hampered by a narrow theatrical window as is, there was no opportunity for the film to overcome its naysayers. To be fair, the film isn’t without its flaws (far from it), but this wasn’t simply critical or audience reviews sinking a film; it was the impression of it not being worth anyone’s time that killed it. It bombed because the internet said it bombed.

Of course, critics and audience have always been the arbiters of what succeeds or fails, what stays and what goes. But I think what we’re seeing is a new extreme. Films like Flash, Mission: Impossible, and Indiana Jones are not even given the chance to overcome the haters. In some cases, people who haven’t even SEEN a film can bury it before it’s even released (as seems to be the case with the upcoming Blue Beetle). In our digital age of social media saturation, we’ve seen the destructive ends of viral opinion. Whether the source is legitimate or not, whether the conclusion is valid or not, anything that is repeated long enough or wide enough becomes fact.

And whether politics or film, once a perception is embedded it’s very hard to overcome.

The frontrunner solution to these problems used to be seeing how films did post-theatre. DVD/BluRay sales or cable viewership could eventually pull a film back into the black. Today, this has shifted to the streamers to save a film or series. But as the WGA and SAG-AFTRA have brought to light, the economics of this are just as worrisome—if not more so. Some streamers/studios would rather simply take the tax write-off than give films a chance (as with Batgirl or Crater). Other films and series in a catalogue may be pulled for any other number of reasons, costing the creators revenue (one of the issues of the strike) and audiences opportunities to discover new and old content. It’s a double-edged sword to have streamers in a position to rescue films such as The Flash (coming in #1 in digital sales) while also fighting hard to deny actors and writers their fair compensation for the output driving those sales.

What this means is that the promise of the digital age of an endless pool of content may actually be providing us with less in the long run. With physical media disappearing, films and shows that vanish off the internet are simply gone. Therefore, the competition to remain online is becoming nearly as difficult as that to stay in theatres.

It’s no longer enough to be good. Or even great. Only the truly exceptional survive.

And if the blockbusters can’t do that, then what does that mean for the small fries? Audiences constantly bemoan there’s little to no original content being produced, but with this current business framework you might see why. Original is risky, and if it’s not an instant meteoric hit, then it’s not worth it.

There are no easy answers or fixes to these issues, as the strikes have proven. But I think what we need the most is a shift in approach from both the production and consumer ends. Both sides need to take a step back and slow down. We need to drop this instant gratification mindset. We need to allow works to breath, to find their audience, and for audiences to find them. We need to stop killing entertainment before it’s even out, and entertainment needs to adjust beyond the lowest common denominator. Streamers need to fulfill their promise of being a repository for diverse content, and studios need to back creators who are pushing the envelope and trying to deliver something original. The relationship is not, and never has been, one-sided. It is a complex, interdependent entwining that requires us to respect each other. Business and art can coexist, but not without help.

Both sides ultimately want the same thing. And isn’t leaving everyone happy the ultimate Hollywood ending?


Derek May, of San Antonio, TX, is Editor-in-Chief and occasional writer for Flapper Press. He has written nearly 50 movie reviews for and completed 13 original feature film and television screenplays, many of which have been winners or finalists in such prestigious competitions as the Walt Disney and Nicholl Fellowships, the Austin Film Festival, and the Creative World Awards. He served as a judge for 10 years for the Austin Film Festival and Texas Film Institute screenplay competitions. His latest project has been the highly acclaimed stop-motion animation fan series Highlander: Veritas, which released its second season in July 2022.

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