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

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.

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