2 posts tagged industry
2 posts tagged industry
Edward Jay Epstein, industry expert and author of The Hollywood Economist 2.0: The Hidden Financial Reality Behind the Movies (one of the best books on the business of film) says that despite what you read, studios are making money. Here’s how:
The ways that Hollywood loses money are the meat of news reporting on Hollywood. The headlines screamed in early 2012: “Movie Attendance Falls to 16-year Low,” reflecting a secular decline at the box-office that has gone on since 1949; “Hollywood in Turmoil as DVD Sales Drop,” reporting on what had been, earlier this decade, the cash cows of the big studios; and “John Carter a Financial Disaster For Disney,” a $200 million fiasco which led the resignation of the studio chief.
What goes largely unreported is that the studios have found other ways to make money. Despite all the bad press, most of the major studios are making record profits. Even Disney, the John Carter loss not withstanding, will make more money this year than it ever has before.
Here are five ways that the big studios are now greatly enhancing their profits:
1. Licensing to new media
Since 2010, there has been an explosive growth in license fees for studio-owned recent/still-airing TV series and older series. The big studios have tens of thousands of TV episodes, movies, and animated shorts in their libraries. Warner Bros, for example, has over 30,000. Non-exclusivity is gone for the ones most in demand as their competition heats up between Amazon, Hulu, and Netflix. Each are buying exclusive rights to compete which each other. As a top Warner Bros. executive recently wrote me, “license fees that were chump change two years ago are now mind-boggling. Since studios do not pay for advertising or prints on licensed material, almost all the revenues, except for residuals, go directly to the bottom line. As a result, the surging license fees have more than compensated for the decline in DVDs.
In this exclusive guest post, Hawley offers an insider’s perspective on the potential creative costs of lucrative overall deals.
There have been a flurry of posts on Deadline Hollywood in the past month about TV writers landing overall deals. In television, an overall deal is a multiyear agreement that pays a writer a six- or seven-figure salary, and guarantees them at least one pilot script in exchange for the writer agreeing to work exclusively for that studio.
For decades the overall deal has been the holy grail for television writers. These big-money deals are offered to very few writers. They are a sign that a writer/producer has reached the top tier in the business. Not to mention they offer something rare in the tumultuous world of television. Stability.
So if you’re a TV writer you want an overall, right? Wrong.
At least in my opinion. And here’s why. Ownership. When you make an exclusive deal with a studio they own you. And in my experience once a studio owns you, your value to them actually goes down.
Say what? That doesn’t make sense. You’re telling me I’ve just signed a deal worth a million dollars, and the first thing that happened is that the studio I’m working for
suddenly loses interest in me?
Yes. That’s exactly what I’m saying. The fact is, there is a strange inverse equation in Hollywood that goes like this: The thing you can’t have is always more exciting than the thing you can have or already have. It’s about coolness. This is Hollywood after all.