It may have lacked a
generation-defining event movie like 1977's Star Wars, or even a
technological groundbreaker like 2009's Avatar, but 2013 was still the
year of the Hollywood blockbuster.
This year, 26 films costing more than $100m (£61m) each were
released by the major Hollywood studios - more than ever before. They
are likely to have raked in tens of billions of dollars in worldwide box
office revenues as a result - close to the record $35bn (£21.5bn)
delivered in 2012.
Some of the films did badly. The Lone Ranger, starring Johnny
Depp, barely made back the $250m it cost to make. But the hits
outweighed the flops: Iron Man 3 took $1.2bn in box office receipts
around the world, topping the charts and making it the fifth
highest-grossing film of all time.
But despite the runaway successes, there are concerns within Tinseltown that blockbuster budgets are getting dangerously high.
Bankrupted
"There's eventually going to be an implosion, or a big
meltdown," said Hollywood elder statesman Steven Spielberg in a speech
earlier this year. "Three or four or maybe even a half dozen mega-budget
movies are going to go crashing into the ground, and that's going to
change the paradigm."
Steven Spielberg has warned of an "implosion" in Hollywood
It has happened before. In 1980, Heaven's Gate effectively
bankrupted United Artists. The budget for the sprawling Western got out
of control, the film bombed, and the studio was forced into a takeover
by MGM.
The irony is that Spielberg almost singlehandedly invented
the blockbuster genre. When his film Jaws was released in 1975,
Hollywood realised that making a few big-budget films a year that
appealed to the masses was more lucrative than making dozens of smaller
ones, and a business model was born. Since then budgets have soared and
artistic merit has taken a back seat.
Hollywood watchers say it's a statistical certainty that
another bomb to rival Heaven's Gate, or even 1995's Waterworld, is
around the corner. But the difference, they say, is that modern
Hollywood studios are equipped to cope.
After a wave of acquisitions in the 80s and 90s, the six
"majors" that dominate global box office are now parts of massive media
conglomerates. They have found ways to both boost profitability of their
films and mitigate the risks associated with making such huge
investments.
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HIGHEST-GROSSING FILMS OF 2013 WORLDWIDE
- Iron Man 3 (Walt Disney) - $1.2bn
- Despicable Me 2 (Universal) - $919m
- Fast & Furious 6 (Universal) - $789m
- Monsters University (Walt Disney) - $744m
- The Hunger Games: Catching Fire (Lionsgate) - $730m
- Man of Steel (Warner Brothers) - $663m
- Gravity (Warner Brothers) - $642m
- Thor: The Dark World (Walt Disney) - $620m
- The Croods (20th Century Fox) - $587m
- World War Z (Paramount) - $540m
Source: Box Office Mojo
The first thing the studios have
done is spread the risk by getting dozens of smaller production
companies to invest alongside them, reducing their exposure to a
potential flop.
Revenue streams
The second thing is that they have made the success of their films almost a sure thing.
Recent research by British film academics John Sedgwick and
Mike Pokorny has found that not only have blockbuster films become more
profitable over the past 20 years, they have become more reliably
profitable: in the late 80s just 50% of major studio films turned a
profit. In 2009 it was 90%. Flops have become rare.
"[Studios] are ruthlessly good at getting returns from their
investments," Prof Sedgwick says. "Hollywood has got better and better
at it. The more you spend, the more you get back. It seems to me to be
an extraordinarily successful model."
How have the studios achieved this?
The first step has been to generate new revenue streams. In
the early days of Hollywood, 100% of revenues came from ticket sales.
Now it's just 20%. The rest of the money comes from television
licensing, DVD sales, merchandising and other commercial deals.
"Blockbuster films are not really films," says Charles
Acland, a professor of communication studies at Concordia University in
Montreal, and author of the book Screen Traffic. "They are in fact very
elaborate 'tent-pole' business models that connect all sorts of
different commodities in all sorts of different industries."
The second step has been to look beyond the domestic US
market, where cinema audiences aren't really growing, and look overseas
to developing markets such as China.
Iron Man 3 earned two-thirds of its revenues outside of the US. The
Chinese version of the film even had four extra minutes of footage,
featuring Chinese actors and half a dozen Chinese product placements.
Finally, the studios have become incredibly risk-averse in
terms of the types of films they produce. Instead of taking a chance on
new directors and original ideas, they produce tried-and-tested
franchises, remakes and book adaptations.
Communal experience
A look at this year's top 10 highest-grossing films reveals
just two original screenplays - animation The Croods and 3D epic
Gravity. In both 2012 and 2011 there were none in the top 10.
As a mark of the power of the franchise, The Amazing
Spider-Man was released last year, and Sony has already pencilled in
dates for The Amazing Spider-Man 2, 3 and 4 stretching until May 2018.
That's on top of Spider-Man 1, 2 and 3 released between 2002 and 2007.
Hollywood faces challenges. Executives are sweating over a
virtual collapse in DVD sales in recent years amid the growth of online
streaming services such as Netflix. The major conglomerates that control
the studios are seeing profits faster at their television arms than in
the film industry, and are cutting costs.
But perhaps the more worrying long-term problem is what
Charles Acland calls "aesthetic bankruptcy". The blockbuster business
model necessarily leads to making bad movies.
The perception that Hollywood peddles lowest common
denominator crowd-pleasers at the expense of "serious" cinema means
screenwriting talent is increasingly moving over to television. This
year director Steven Soderbergh threatened to quit altogether.
But while blockbuster franchises continue to bring in
billions worldwide, there is little sign that Hollywood will change its
ways.
"If you want a shared communal experience of the film that
everybody's talking about right now, then you go to the movie theatre,"
Prof Acland says. "The blockbuster is very stable in Hollywood. It's not
going to go away any time soon."
