Major Hollywood Studios Current Business Approach: Big Budget Franchise and Low-Budget Genre

August 27th, 2014 by

I have written about the bifurcated business approach currently in vogue with Hollywood’s major studios: Big budget franchise movies on the one end, low budget genre films on the other. This Variety article from last week — “Universal Veers From Superhero Trend for a Monster Plan” — is further proof of this business model:

While most studios in Hollywood are betting on superheroes to save the box office, Universal Pictures is doubling down on creature features.

This month, the studio acquired rights to Anne Rice’s “The Vampire Chronicles” book series. In July, it announced plans to create a Marvel-like cinematic universe around Dracula, Frankenstein, the Mummy, the Invisible Man and the Creature From the Black Lagoon.

At the same time, the studio inked an eyebrow-raising 10-year, first-look deal with microbudget horror producer Jason Blum, whose Blumhouse Films is behind the profitable “Paranormal Activity,” “Sinister,” “Insidious” and “The Purge” franchises. Last summer, the studio lured Legendary Entertainment into the fold, and now the production firm is co-financing U’s “Jurassic World” and “Dracula Untold,” and has its own upcoming thrillers, including “As Above, So Below” and King Kong tentpole “Skull Island,” which Universal will release.

Right there in that third paragraph, we see these two strategies butted up against each other: Microbudget horror movies (Blumhouse Films); Big budget franchise movies (Legendary Entertainment).

Of course, writers well-versed in subtext will note: There’s nothing in the middle. No mid-budget movies anywhere in sight. For fans of adult dramas and thrillers, or comedies with A-list talent, by and large the fate of those type of films is in the hands of various financiers and their co-productions. Fortunately, there are a lot of those filling the void created by the major studios.

But the question is: Will this bifurcated model be able to sustain itself for the next 5-10 years? What do you think?


For the rest of the Variety article, go here.

6 thoughts on “Major Hollywood Studios Current Business Approach: Big Budget Franchise and Low-Budget Genre

  1. […] Hollywood Studios Current Business Approach: Big Budget Franchise and Low-Budget […]

  2. […] Hollywood Studios Current Business Approach: Big Budget Franchise and Low-Budget […]

  3. blueneumann says:

    The thing is… we’re smack dab in the middle of a complete paradigm shift of how we create and consume media, and we have no idea how it’s going to play out. I don’t blame movies for sticking with their strengths, but I think that by sticking with action/adventure tentpoles, they’re short-changing their other advantages.

    1. Scott says:

      Concur, Chris. Summer 2014 B.O. is down 22% compared to last year and lowest ticket sales perhaps since 1992. Granted there were a couple of big movies originally slated for this summer that got pushed including the annual Pixar smash, but unless Guardians hits $300M, it will be first year in a long time in which no summer movie will hit that mark in domestic B.O.

      Meanwhile TV is hot, female audience is the largest out there, Baby Boomers are supporting movies aimed at them, the most active ethnic movie watching group is Latinos, etc.

      Studios want to play it safe. Hence franchises and ultra-low budget movies. But what happens when China stops watching Transformers?

      In 10 years, we may not even recognize the business. There may be little distinction between what we now call “TV” and “movies”.

      We’ll know a lot more after the next two summers which are crammed full of big budget franchise movies. If several of them crash and burn, that could expedite a revision in business policy. If, on the other hand, it’s a record summer box office-wise, we could be in for more of the same.

      1. blueneumann says:

        I think once Netflix and Amazon figure out how to make a $20-30 million dollar stand-alone non-franchise flick profitable on their platforms, that’s gonna be the game changer. We already have too many tentpoles THIS summer that we’ve had four delays (Seventh Son, The Interview, Kingsmen, and Jupiter Ascending) and they’ve been shifted into an even busier year, but in between all those movies, there’s no counter-programming. And, you know, big budget movies are the ones that are okay to wait for, the anticipation of a new Star Wars is part of the fun. But a comedy like Neighbors? Or a drama like The Judge? All that waiting does for me is either give me time to forget about them or decide to wait for the rental to come out. There’s got to be a glut of quality material out there that doesn’t fit into the narrow perimeters that make a successful box office weekend. The second that the numbers balance, there’s gonna be a buying frenzy.

      2. blueneumann says:

        BTW, this blurring has already started to happen: the show Futurama has four movies in the middle of its’ run, Doctor Who had a 3D theatrical movie come out last year that’s sandwiched between the last season finale (itself film-like) and the Christmas special (also film-like). Shows like Farscape and Stargate SG-1 ended with their own TV-movies… I can see this happening with Game Of Thrones (when they get to a particularly expensive moment), maybe Modern Family could do that on one of the thousand vacations the family takes, they want to make a movie of Arrested Development, why not stick that into the timeline, then follow up with another season?

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