Box Office

Hollywood’s Tanking Business Model

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Illustration by Jasper Rietman

My commentary: I came across this great article written by Catherine Rampell for the New York Times the other day and I felt it was worth sharing. Rampell’s article highlights how major film studios overuse the strategy of releasing their blockbusters during the summer months. According to the Rampell,  31 films ran on over 3,000 screens across the country this past summer, the most ever. She examines the thinking behind Hollywood’s reliance on this model and why it is becoming less and less effective, especially when considering how many of last summer’s releases flopped. Rampell also dives into the nature of the film industry and how studios attempts at avoiding risk can have an adverse effect on tickets sales and may be the reason of the countless sequels and remakes in production today. I’ve always been curious about the summer blockbuster theory and how major studios decide on the best times to release their films. I think Rampell provides an interesting perspective on the subject, one you can’t find (*deep movie-announcer voice*) in the theatres nearest you!

Here is the article:

Hollywood’s Tanking Business Model

By Catherine Rampell www.nytimes.com
September 3rd, 2013
Original Article

Nearly 40 years ago, a great white dorsal fin sliced through American cinemas with its ominous, minor-second-interval leitmotif, and a new business model was born. “Jaws,” which cost $7 million to make, was deemed a good fit for a June release in 1975 partly because it took place at a beach around Independence Day. But its extraordinary success — the movie went on to earn $471 million at box offices worldwide — subsequently helped spawn Hollywood’s now-conventional wisdom that if you’re going to make a blockbuster, then summer, when kids are out of school and people are in search of industrial-strength air-conditioning, is the best time to release it. After “Star Wars” became a huge hit two summers later, all the big studios seemed to take notice.

In the years since, those studios have crammed more man-eating marine life, aliens, pirates, superheroes, robots, dinosaurs and car chases (and their exploding iterations) into an increasingly crowded season. A decade ago, there were 22 films that each ran on 3,000 screens during the summer. This year, there were 31, the most ever. A lot of them, however, bombed. “R.I.P.D.,” “Turbo,” “Lone Ranger,” “Pacific Rim” and “White House Down” all cost more than $100 million, only to tank at the domestic box office. After a bit of soul searching, several explanations have been suggested — Ryan Reynolds’s inability to open a movie, why anyone would want to see the “Lone Ranger” in 2013 and so forth. But a number of economists are coming around to a more unsettling idea: The summer-blockbuster strategy itself may have tanked.

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