Sunday, June 23, 2013


We are all doomed!

The film industry is going to implode!

The sky is falling!

One of the above is a true prediction of film industry legends Steven Spielberg and George Lucas.

Not really what the audience at the University of Southern California expected when they invited the two Hollywood giants to speak, I'm sure.

So, we have two Hollywood legends, titans of the medium, suggesting that the studio system will implode and the film business will radically change.

Lucas even suggested the cinemas will turn into Broadway, where people pay $50 to $150 a ticket for a theatrical show.


I am really trying to think of a respectful way to phrase my reaction. It's not that I think that the legends themselves will read this, it's your bad language email and web filters I am worried about.

All I can really say is WOW.

These two legends are, I'm sorry to say, totally lost as to where the film industry is headed.

Comparing a cinema ticket to a theatre ticket? In the age of piracy and home cinemas?


Are they even reading the data that is available?

Audiences are consuming more content than EVER before. EVER.

The demand is there. Yes, that content is being viewed over a number of platforms, but the cinema is still very much a part of that spectrum. The problem is not that people don't want to go to the cinema to watch movies.

The problem is that, despite incredible technological improvements that should have significantly decreased the cost of making movies, there is huge amounts of waste on a big budget film. No business could survive burning through as much money as a major Hollywood production. If this problem is solved, it would actually be a wonderful change of a wasteful culture.

The problem is that exhibitors keep indiscriminately raising prices with no matching improvement in the experience of going to the cinema.

The problem is that the price of the cinema ticket does not reflect the cost involved in making that movie, and therefore a true economic choice by an audience member is distorted. If the $200 million blockbuster and the $200 thousand independent film cost the same to watch, I will choose for my 'money's worth' without making a real choice between the films.

Imagine you went to restaurant. Now imagine that the restaurant charged you one price, $75, no matter what you eat. On the menu are two choices: a plate filled with lobster, caviar and truffles; and a McDonald's hamburger. Which would you choose?

Of course, you will choose the fine dining option, for the sake of value. And that is the decision we force people into, every time they go to the cinema. Why are we surprised at the result?

What really surprises me is that, despite this severely flawed model, people are still going to the cinema en masse. So much, in fact, that it flies totally in the face of what Lucas and Spielberg are saying.

Don't believe me? Well, the year 2012 in cinematic terms:

- had the greatest number of films crossing the $1 billion mark, with four films. It is also the second year in which two films released by the same studio have grossed over $1 billion, after 2010;

- is the only year that eleven films have earned more than $600 million worldwide ('Life of Pi' also grossed over $600 million); and

- has beaten the record for the greatest number of films earning more than $500 million, with thirteen films ('Ted' and 'Brave' also grossed over $500 million).

So, where are Spielberg and Lucas getting their information?

I would much rather ask an actual cinema owner who is also a filmmaker. Love him or hate him, Michael Moore and his team have built the Traverse City Theatre in Michigan into the most highly regarded cinema in the world. So says the Motion Picture Association of America (MPAA).

Mr Moore was also generous enough to share his blueprint for success in an interview. My favourite quote:

'We don't rip people off. You can see a first-run movie for $8 and $6 (kids are less). Late night on the weekend is 2 for $5. We have 25-cent kids matinees on Saturday mornings (often packed with 580 people in attendance) and 25-cent classic movie matinees on Wednesdays. As for the concessions: No $10 popcorn at our place! Popcorn is as low as $2, soda $2 and candy as low as $1. We believe everyone should be able to afford to go to the movies.'

Charging people less so they can actually afford to go to the movies? How revolutionary.

So, is the world of film and television changing? Of course it is. The whole world is going through rapid, destabilising change as a result of technology.

But that doesn't mean that we are set for a catastrophic implosion. It means that we have to evolve. It means we have to show people that art, movies and storytelling are valuable to their human experience. It means we have to stop ripping people off in the name of excessive profits.

That is what these two legends should have said.

Instead, they accidentally revealed what we all really know. What is not being said. The elephant in the room.

They revealed that the world is changing in ways that defy prediction. No-one has the answers. Even legends aren't experts anymore.

You can be paralysed by terror at this fact.

To me, it is an exciting new era. The rule book has been cast aside. You are free to build your own career and create your own paradigm.

But are you ready for the challenge?

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