Thursday, July 25, 2013


'The Lone Ranger', Disney's new $250 million dollar summer blockbuster, looks like it is going to lose $150 million for Disney.

That's not a typo. $150 million. Lost.

To some analysts, this failure signals the beginning of 'the Hollywood implosion' that Steven Spielberg and George Lucas recently predicted.

I disagree.

You see, I also wrote recently about the glum prognostications of Mr Spielberg and Mr Lucas:

I suggested that, instead of evidence of an implosion, their predictions are evidence of a different trend: the wave of technological change turning the existing experts into novices, just like the rest of us.

I also pointed out that, remarkably, no-one is highlighting the fact that film budgets continue to expand, while the technological means to make films actually becomes cheaper and more accessible.

And then, amongst all of the chatter of doom and industry implosions, 'The Lone Ranger', and its suggested dismal box office returns, seems to provide timely evidence for the pessimists.

Or does it?

There is a very small gem of vital truth in the Hollywood Reporter article about 'The Lone Ranger' and its predicted failure. I suggest you read it, however, just in case you are feeling lazy, the critical passages are:

'In August 2011, former Walt Disney Studios chairman Rich Ross suspended production of Lone Ranger because of concerns over the $250 million budget in the wake of box office bomb Cowboys & Aliens, also a Western.

But after Bruckheimer and Verbinski promised to scale back the budget to $215 million, Disney gave the go-ahead. As part of the agreement, Bruckheimer also agreed to pay for a portion of any budget overages, although it isn't known what the split is between him and Disney. That arrangement could put some of the financial loss on Bruckheimer's shoulders.'

Did you see it?

I even bolded it for you.

The critical question, we should all be asking, is how do you simply 'scale back' $35 million dollars?

That's a not insignificant 14% of the total budget, by the way.

If you didn't need to spend $35 million dollars then why, for the love of Pete, would you ask for it?

And while you are thinking, consider this. Traditionally, the producer's fee is calculated as a percentage of the total budget of the film. Under this model, producer's essentially have a vested interest to see the budget go higher, to increase the size of the fee they receive, regardless of box office success.

Could this have been a factor?

We'll never know.

What we do know, is that the film production system has to adopt the technological change at hand and evolve to a more sustainable model. We are in the midst of that transitional period, and transition is always scary. The old guard are terrified by what they can't understand.

But once upon a time, films didn't have sound.

Epochs end. Is an end to the days of spending so much on a film that it has to do unrealistically well at the box office a tragedy?

No, it isn't. It simply means that films will need to be made using the latest technology. Smarter. Cheaper. Less wasteful.

It's not a bad thing. It's just an unknown, given our current level of understanding.

The unknown always leads to outlandish theories, to try and explain a shifting paradigm.

The Hollywood implosion is one of those myths.

How do I know?

Despite 'The Lone Ranger', Disney just became the first Hollywood studio to surpass $1 billion in U.S. domestic box office returns this year.

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