In this era of corporate mergers, mega companies, and minimized competition, the film industry giants are looking for new ways to profit in an ever changing marketplace. But as they search for innovation, they are discovering that there is an expanding opening because of mass business deregulation over the past eight years of casino capitalism. Because of this deregulation, they are beginning to return to some classic business models instead such as being a vertically integrated industry. Think of big oil for the best example of what vertical integration is and can do. The oil giants produce, refine, distribute, and retail their product. They control all aspects of their business from start to finish, maximizing profits and allowing for price gouging when appropriate. For the film industry, being vertically integrated means producing the films, distributing the films, and exhibiting the films. Several media conglomerates are practicing vertically integrated models with no legal consequences for their monopolistic activities. This is bad news for independent filmmakers across the country including those of us in Tucson.
Many companies possess two of the three elements needed for vertical integration. But recently, instances of companies having all three of the elements in place are on the rise. This is especially true when the company has a strong international presence. For example, Time Warner has vertically integrated itself by keeping its Warner Bros. International Cinemas an international venture only. Do the math and you realize Warner Bros. exhibits almost all of their U.S. releases internationally. Time Warner has long had a powerful presence in film production and distribution in this country. Time Warner’s holdings include Warner Bros. Entertainment Group, Castle Rock (big hit was Seinfeld), Warner Independent Pictures (an oxymoron if there ever was one), and New Line Cinema among others. So if Time Warner owned theaters in the U.S., it would in theory be in violation of anti-trust laws. Cable giant Viacom, who counts among its holdings MTV, VH1, Comedy Central, and film production giant Paramount Pictures, has a similar setup. They own a 50% interest in Mann Theaters, which seem by rational investigation to be located in the U.S. This seems to be something the U.S. Justice Department should be looking into because the holdings of Time Warner and Viacom resemble corporations involved in monopolistic business practices that violate anti-trust laws laid out as early as 1948 in the United States v. Paramount Pictures.
Upon further examination, on some level, vertical integration monopolies are legal now as long as your exhibition rights are on network television or cable. Corporations like G.E. (NBC’s parent), Walt Disney (ABC’s parent), CBS, and News Corp. (Fox’s parent) have long held television network outlets, newspapers, film and television production companies, publishing houses, and radio networks. This arrangement is attempting to squeeze out small companies or swallow them up in a merger or straight buyout. This is bad news for independent filmmakers of Tucson unless the enforcement of anti-trust laws improves and the penalties for the violation of the laws become more punitive. Try and think of these issues the next time you fork over your $9 for a movie and it is the quality of Transformers 2. It may be that way because we all reap what we sow.
Choose a film institution to produce, market, distribute and exhibit your coursework film:
Will you choose Film4 or Warner Bros? Why?
Who is your audience and how would the institution market and distribute your film to attract them?
Is this company an example of being vertically or horizontally integrated?
How would this benefit your film and why?
Use the slideshare below as an example of how to structure/set out your presentation:
Film Distribution, Marketing, Publicity and Promotion Activities
For the film 'Gravity':
Identify the main target audience, their profile - psychographic or demographic - how were they targeted?
Identify key cast and the film’s USP (unique selling point - what makes it different from other films?).
Now research the 360 degree, saturated campaign including poster, theatrical trailer, outdoor and online marketing; publicity; and promotions that maximised the film’s profit potential and create a document to present to the rest of the class.
Questions to think about
Which production, distribution and marketing companies were involved with this film? Are they one of the 'big players'/'mainstream'/'Hollywood' companies? Or are they a smaller, independent company? Who were the target audience for the film? (This may depend on whether it comes from mainstream Hollywood or independent company...although there are exceptions to that rule...)
How was the film marketed? How did they use modern technology for the filming/marketing? Features of Web 2.0 to involve the audience?
The Difference Between Mainstream and independent Campaigns
Mainstream, mass audience appeal films (those usually produced by the Hollywood studios) differ significantly to the independent productions which tend to target a ABC1, white male, 25-40 audience (though not always this specific audience, they generally aim to target those outside of the mainstream in order to offer an alternative to Hollywood).
Due to the difference in audience, art house films tend to focus on different aspects in their marketing campaign, below are some of the key differences:
Use the information above to choose a recent film from either Hollywood mainstream or Art House. Research the institution and find out:
* their ideology,
* their most recent releases + box office figures (use IMDB website),
* other companies they own.
Then, select a film produced by this institution and explain how (at all stages of production, distribution/marketing and exhibition/consumption/exchange) each decision shows that it's part of a Hollywood or Art House production.
Some useful starting points for Institutions:
Hollywood: Universal Studios, Fox Searchlight Pictures, 20th Century Fox.
Hollywood’s old guard is not happy. At the banquets, screenings and question and answer sessions that make up the ever-longer awards seasons, culminating with the Oscar ceremony itself at the Dolby Theatre on Sunday, the word that is coming up with some frequency among the 6,000-plus members of the Academy is “disappointed”.
This year the only bona fide studio film with a shot at winning best picture isAmerican Sniper,directed by Clint Eastwood and its $58m budget financed by Warner Brothers. The rest of the nominees are made up of indies (Boyhood,Whiplash), quasi indies distributed by the studio’s speciality divisions (The Grand Budapest Hotel,Birdman), British imports (The Imitation Game,The Theory of Everything) or studio movies in name only (Selma, which was distributed by Paramount but financed independently). Increasingly, the Oscars seem to be functioning almost as a kind of wish fulfilment — a visit to an alternate universe where, for one night of the year, the industry can reward the very films it spent the other 364 days of the year coming up with watertight reasons not to make.
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“I had a former studio executive say to me, ‘We all loveBoyhood because it’s the kind of movie we wished we could make and can’t,’ ” says Jonathan Sehring, the president of IFC Films, the independent New York distributor that gave director Richard Linklater the $200,000 a year needed to shoot Boyhood over 12 years. “This was from someone who used to run a studio, successfully, for many, many years. Would a movie like Boyhood ever be made by a studio? No. Just the return on investment is not something that makes a lot of sense for them.
“They’re talking global economics,” he continues. “I sat at a round table several months ago with all of the studio heads, and all they were talking about was China. Could Driving Miss Daisy travel to China? I doubt it in this day and age. It’s just a different economic model. The middle-budget movie has, more-or-less, disappeared now and the independents, or speciality divisions within the studios, are filling in the gap.”
Observers have been talking about the impending death of the mid-budget movie — films costing $50m to $70m to make, somewhere in between low-budget indie and big studio spectacular — since at least 1997, when Steven Spielberg warned: “It’s kinda like India where there’s an upper class and a poverty class and no middle class. Right now we are squeezing the middle class out of Hollywood and only allowing the $70m-plus films or the $10m-minus films [to be made].”
Costs have almost doubled since then: the price of the average studio blockbuster is between $150m to $200m, with another $100m going on marketing. Even Lincoln(2012), directed by Spielberg with a budget of around $65m, came “this close” to being an HBO movie, the director confided in 2013. In the recent words of one Disney executive: “Everything in the middle is toast.”
“The cost of advertising is so exorbitant now and the internet so all-pervasive, so much harder to control,” says Andrew Eaton, a British film producer who pulled together the money for Rush (2013), about the 1976 Formula One season, from a mixture of independent and overseas financing. Directed by Oscar-winner Ron Howard, it may have looked like the latest high-pedigree biopic from Universal but, in essence, it was a British indie.
‘American Sniper’
“The studios are much more comfortable doing a $100m-plus film, like [recent sci-fi blockbuster] Jupiter Ascending, and taking a risk on it,” adds Eaton. “Even though they’re much more at risk, the potential upside is much higher. [If] you’re in that middle ground, your road is so much harder.”
Not that mid-budget movies don’t get made but they tend to fall into one of three categories: comedies with an established star such as Seth Rogen or Melissa McCarthy; films directed by stars, such as Angelina Jolie’s Unbroken (2014) or Eastwood’s American Sniper; or films by triple-A-list directors such as David Fincher and Martin Scorsese. “They exist, but they’re like Fabergé eggs,” says Lynda Obst, producer of Interstellar (2014), the Christopher Nolan space epic that played the role of studio behemoth in everyone’s favourite Oscar narrative, Goliath defeated by David, collecting only a smattering of technical nominations in an otherwise indie-packed field.
‘Boyhood’
“They’re like Medici gifts given to the studio’s most precious assets,” says Obst. “Warner Brothers are in the Clint Eastwood business in the same way Paramount are in the Marty Scorsese business. George Clooney can make a mid-budget movie because he has more leverage. It’s just very, very hard for normal people. The pumpkin patch hasn’t quite disappeared but it’s definitely endangered, ceding ground to multiverses of superheroes. The studios are filling their huge production slates with movies that can open around the world. What you’re committed to flourishes. If the studios were committed to making Oscar-winners, those would flourish instead.”
‘The Theory of Everything’
The problem for the Academy Awards is that the mid-budget range is the very “pumpkin patch” from which studios used to grow their Best Picture winners, such asDriving Miss Daisy (1989), Dances with Wolves (1990), Braveheart (1995). These craft-heavy humanist epics, often in period settings, celebrated the moral ability of a single individual to effect or inspire some sort of societal change. The Oscar movie isn’t exactly a genre but if you had to boil it down to a pitch, it might be this: one individual, making a difference, in costume. It was the Indian chief hoisting the hydrotherapy basin in One Flew over the Cuckoo’s Nest (1975). It was Miss Daisy inviting Hoke to the Martin Luther King dinner in Driving Miss Daisy. It was Ethan Hawke standing on his desk to salute Robin Williams at the end of Dead Poets Society (1989).
‘Birdman’
The market for such films has been judged by the studios too small to be worth bothering with. Films bearing DNA trace elements of those old Oscar runners still show up, often to be declared favourites by Oscar prognosticators before they’ve even been seen — in 2009 it was Eastwood’s Invictus, while last year everyone was running scared of Angelina Jolie’sUnbroken — but they invariably turn into the biggest disappointments of the season, quickly left in the dust by the more robust independents.
“It’s clear that the studios have concentrated more and more on the international market and creating franchises,” says Obst. “They’re hiring anyone they can — often out of the indie world, such as Rian Johnson who went from Looper [2012] to Star Wars, or Marc Webb, who went from 500 Days of Summer [2009] to The Amazing Spider-Man [2012]. They’re taking these great young film-makers and putting them into blockbusters, and it’s hard to then go backwards. Once you’ve directed a big film, they don’t often want to make a small film again.”
. . .
‘The Imitation Game’
There’s a reason “David v Goliath” has become the favoured Oscar narrative over the past 10 years: it exactly reproduces the contours of an industry that has itself bifurcated between studio spectacle and indie initiative. And there’s a reason that narrative always seems to end with David winning: the indies are invariably better.
In the five years since the Academy expanded the best picture list to a possible 10, independents have taken up roughly half the nominations; and four times out of five, they’ve gone on to win — The Hurt Locker (2009), The King’s Speech (2010), The Artist (2011), 12 Years a Slave (2013). The studios can claim only one bona fide best picture scalp: Argo (2012), for Warner Brothers.
‘The Grand Budapest Hotel'
“Back in the day, everybody who worked and voted was part of the studio system and they belonged, they all had affiliations to one studio or another,” says Anne Thompson, editor-in-chief of a film industry blog and author of last year’s The $11 Billion Year: From Sundance to the Oscars, an Inside Look at the Changing Hollywood System. “You can still see some of those dynamics but not the way you used to. Everybody’s an independent agent now. Today,Braveheart would totally be financed overseas and so would Dances with Wolves. This is the new industry: foreign film sales-financed movies that are driven by stars.”
Last year, for example, Brad Pitt’s production company Plan B pulled together financing for 12 Years a Slave on the strength of a small supporting role for the star, only then to get into a fight with Paramount’s Brad Grey, who thought Pitt’s deal with the studio ought to have given Paramount first dibs on distributing the film. According to Johnson, “Grey was pissed off that Paramount didn’t get bragging rights to 12 Years a Slave. So this time [with Selma] they got bragging rights to solve that. Each one wants to be there on the big night. It’s all about, ‘Is it serious enough? Does it have enough gravitas? Is it art?’ It’s about the way the Academy wants to be represented in the world. The reason they expanded the Best Picture list in the first place is to try to pull in more big movies. And it hasn’t worked. It just seems to bring in more indie movies — because those are the best movies, those are the ones that are actually getting made by hook or by crook, and wouldn’t have got made if the studios had any say in the matter. They are very grateful American Sniper made the cut. They’re not thrilled with their choices. This year could be one of the lowest watched shows in years.”
‘Selma’
The ABC network would obviously love the kind of viewing figures it got when a big blockbuster such as Titanic (1997) or Lord of the Rings: The Return of the King(2003) swept the Academy Awards but it’s about more than just ratings. The Oscars are about self-image, picking a Best Picture that will act as an ambassador for the Hollywood film-making community. It’s about how the industry wishes to be seen.
This year, a portrait of a deeply ambivalent industry emerges. Outside, it’s raining dollar-generating dragons and superheroes but, inside the Dolby Theatre, it’s renegades, indies and mavericks, with the biggest haul of the night possibly going to Wes Anderson, the dauphin prince of corduroy quirk, for The Grand Budapest Hotel. Best Picture, meanwhile, has turned into a head-to-head fight betweenBoyhood, Linklater’s gentle, mild-mannered Bildungsroman, and Birdman, Alejandro González Iñárritu’s fabulous, nutty, bravura deconstruction of Hollywood’s superhero complex. The artistic redemption of those up to their elbows in blockbuster dollars is exactly what Iñárritu’s film is about, though one reason the race has been so difficult to call is that both films represent the kind of critically acclaimed, left-field pick that, in any other year, would be playing underdog to the studio’s Goliath. In the absence of any such beast, the field is all Davids.
‘Whiplash’
“I wouldn’t be surprised, next year, if the studios start looking at this again and saying, ‘Ooh, that’s interesting.’ The Theory of Everything is going to make maybe $20m in the UK,” says Andrew Eaton, “and maybe that’s a good model for them.” It’s always the way: last year’s best picture winner is this year’s hottest pitch. “After Argo there was so many thrillers being pitched,” recalls Obst, “although I don’t think we’ll get to see that many 12-year projects about single mothers.”
Tom Shone is a film critic and author
Your opinion
Which film do you think should win Best Picture at this year's Oscars? (Poll Closed)
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The UK film industry: ‘We love hardcore independent filmmakers’
The UK film industry appears to be in rude health. Figures released this month by the British Film Institute suggest that £1.5bn was spent on UK productions in 2014 — up 35 per cent from 2013 and the highest since records began in 1994. Of that £1.5bn, around £1.2bn was financed from overseas, as US blockbuster franchises such as Star Wars, Marvel’s Avengers and Mission: Impossible took advantage of a 20 per cent tax relief offered by HM Revenue & Customs for productions using British studios, crews and talent. While the tax credit scheme can be controversial (producing allegations of tax avoidance) it seems to be driving investment and contributing to a highly-skilled film industry. And consider the host of British stars nominated for the top acting awards at this year’s Oscars.
However, smaller independent British films may not be experiencing the same commercial surge. According to the BFI’s data, there were fewer films with budgets below £0.5m produced in 2014 than in recent years, and the amount spent on homegrown British productions was less than 15 per cent of the total — down to £200m from its peak of £260m in 2012.
“An exciting generation of filmmakers is coming through — people like Clio Barnard, Ben Wheatley, Joanna Hogg and Andrew Haigh — but it’s still hard to get genuinely indie films off the ground,” says Tristan Goligher, the British producer of Haigh’s 45 Years, a sober study of a marriage in crisis.
At this month’s Berlin Film Festival, 45 Years won two Silver Bears, topped the Festival’s Jury Grid, and secured US distribution with IFC, the distributors of Richard Linklater’s Boyhood. According to Goligher, the UK’s system for supporting independent film-makers — combining tax credits, financing from the BFI and regional body Creative England (the film was shot in Norfolk) and broadcaster backing from Film4 — provided “absolutely fundamental” in the indie film’s success.
In January, at the Sundance Film Festival in Utah, another film supported by UK lottery money — Brooklyn, directed by John Crowley and adapted by Nick Hornby from Colm Tóibín’s novel of the same name — secured a distribution deal with Fox Searchlight in the US for $9m, is already being talked of as an Oscar hopeful.
As Britain’s largest public investor in film, the BFI Film Fund administers £26m of National Lottery money a year. Ben Roberts, the director of the BFI Film Fund, says the organisation exists to take risks, supporting films which would not, in a commercial studio system, usually receive finance. “Lottery money isn’t there to replace money that the market is already willing to invest,” he says. “It’s there for films where there is still a question-mark over the audience, or the film-maker. What we want is real diversity. We love hardcore independent filmmakers.” Still, the selection process is tight: only around 25 films can be chosen for funding out of the 400 applications the fund receives each year.
Elliot Grove, the founder of Raindance Film Festival and the British Independent Film Awards, suggests that British filmmakers will carry on regardless. He points to Christopher Nolan’s low-budget beginnings. The director of three Batman films and Interstellar (2014) borrowed equipment from University College London’s film society while working shifts at Boots, the high street chemist, to buy film stock for his 1998 debut Following. “That gung-ho attitude — I see that as the national trait of British filmmakers,” says Grove. “The feeling of: I’m going to do it, no matter what.”
Theo Leanse
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Why the surprise? Anyone should expect fresh ideas to come from small firms. Substitute “GM” For Paramount and we have a shop-worn story we all know.
Missing is a mention of risk taken by the independents and their investors. Not that independent films are automatically good — far from it — but we literally don’t see the bottom 9/10s of the iceberg. I spent several years where it was my job to watch every single film released in the US, and dozens and dozens of foreign. Trust me — the bad movies you'd paid to see are nothing compared to the bad movies you haven’t seen.
As for the Oscar broadcast, I am ever amused that the movie industry can make such bad television. These days I prefer to read about it in the papers.
When accountants, yuppies and MBA's take over art, then art begins to die. Luckily for us, the art of film making is being kept alive by independent producers, directors and actors with passion and creativity.
I have just watched Birdman Thursday evening. If you suffer air sickness, as I do, do not go and watch the movie. Sequence shots made me feel like being on an airplane during a turbulence or a small boat during a storm. From this point of view it reminded me of Dogville, Von Trier movie. Aside from that, the plot was good and mind boggling, actors were talented.
But, for the health of some audience like me, keep the camera still while shooting a scene!
