Over the past decade, the Big Six studios have continually produced fewer movies at an increasing budget:
in 2013, the majors released 32% fewer films than they did in 2003, but spent 75% more per film.
With so much money at stake, studio executives are less and less willing to take chances, and what used to be a preponderance of movies created from original concepts, ideas, and stories has turned into a majority of films based on established IPs.
These huge productions rarely bring a positive return, and an even lower IRR. Their function is progressively becoming that of “a platform for a recurring service”. Studios indeed most of the time don’t make money from the box office but from all the distribution channels that generate multiple revenue streams. Theater has become the initial window that determines the size of all derived grosses.
Since the first licensing deal on Mickey Mouse, studios progressively acknowledged the potential of differentiated exploitation. While Dreamworks Animation just announced its first theme park, one more instrument to increase brand awareness and boost sales of character-related consumer products, Sony showed the impressive figures of the promoting campaign for Smurf 2, with cumulatively $150M from tie-ins with 100 corporations, licensees and retailers from different sectors.(2)
The size of these markets easily explains why it’s so important for studios to create universal and durable characters, which are capable to become brands themselves. This evolution connects with the inner nature of consumerism, linking mass communication and mass marketing with mass consumption. Universal stories, expressed through their brands, aim to reach and tie in a global audience. Today studios dig in their archives looking for properties that can be re-packaged and to build a brand that delivers imaginative stories perfectly attuned to society’s desires.
Among these, the most powerful brands are those that are able to transverse disruptive cultural shifts. Brands that successfully respond to these desires are what Holt calls “brandtopias”.
Batman is the perfect example, as it revolves around the simple and durable concept of “a crime victim seeking revenge”. At the same time it is deeply rooted in the time it is read or viewed. Born as a light, kitsch and colorful pair handing crooks over to the police, selling war bonds, and even waking up in the same bed, in 70 years, Batman has gone from smiling do-gooder to a serious emotional drama, building this way its endurable fortune.
Today’s challenge is represented by the massive presence of superheroes that conflict in the agenda of major theater chains.
The question is: how many superheroes is the audience willing to pay for before it becomes too much?
In an article on Dedaline a few days ago, analysts expressed concern about the fact that “the major studios are all moving towards increasingly indistinguishable strategies, as they all put more and more eggs in the franchise picture basket” . Marketers face the urgency to prove the effectiveness of new penetration strategies, differentiating their project.
Will 2015 be a great summer for big movies, or will they cannibalize one another?