Via Global Panorama
Hollywood loves to characterize and romanticize itself. Think about previous Best Picture winners, like The Artist, Birdman and Argo. La La Land, the apple of The Oscars’ eye, is, yet again, a movie that basks in the nostalgia of Hollywood’s past. There is the tinsel, the swinging from lamp posts, glitzy pairings and California solipsism. Yet, with streaming services more and more entering the film oeuvre, what is Hollywood’s future?
The Hollywood Studio Machine
The Ryan Gosling and Emma Stone musical ranks 20th on the list of highest grossing films of 2016. Damien Chazelle’s nominee for best picture grossed $135,754, 693 at the box office. The film is quite a success, since it cost $30 million to make. However, if you look at the highest grossing films of the year, they are booming blockbusters that cost over $200 million to make. “Captain America: Civil War” cost $250 million to make and grossed $1,151,684,349 worldwide. How sustainable is the Hollywood machine?
Brad Grey, the Chairman and Chief Executive of Paramount Pictures, is working to step away from the troubled studio that many believe he piloted into the ground. In 2016, Star Trek Beyond was the only film that exceeded $100 million in domestic box office profits. Paramount, in its glory years, produced such classics as The Godfather, Raiders of the Lost Ark, and Terms of Endearment, but last year the company banked on Rings, Zoolander and Teenage Mutant Ninja Turtles reboots to help their bottom line and they all flopped. Awards season has even been kind to Paramount with the Denzel Washington backed Fences and Amy Adams’ Arrival both being heavily nominated, but those nominations have not turned into cash for Viacom (VIAB), Paramount’s parent company.
A Hollywood Hostile Takeover
Amazon Studios (AMZN), run by Roy Price, has already crashed the Oscars with Kenneth Lonergan’s Manchester by the Sea. It is the first best picture nominee by a streaming service and it only is a sign of what is to come (last year, Beasts of No Nation with Idris Elba had a chance to score awards, but was snapped by the Academy). Netflix (NFLX), Amazon and Hulu are developing original content that range from low budget to $40 million or more. Netflix just bought an office that is 25 acres in Hollywood and has 500,000 square feet in the Sunset Bronson Studios Complex. Streaming providers are snatching up space to deal with production demands. And we are not talking about offices, as you can read, these are giant production facilities.
This is a full-scale disruption and it would not be such a bid story if Hollywood were not so hostile to outsiders. Silicon Valley and Seattle are challenging the establishment and Hollywood continues to throw big money at directors who can deliver on cash cows like Rogue One and The Jungle Book (both Disney (DIS)). But, what has really set Amazon and Netflix apart from large studios is their investment in talent. Streaming services are paying good money for scripts and outbidding studios for anticipated projects. While to two studios of Netflix and Amazon differ in their artistic criteria – Netflix seems to want shows that are binge-worthy that it can upload to its platform and not create a theatrical release, while Amazon goes for character-driven think pieces that it will get behind and back in the theatre – the silver screen does not mean the same thing to both of them as Hollywood. Amazon and Netflix make movies for customers. Just think: Amazon only spends a fraction of its revenues on films!
The Future of Cinema
Streaming services have already altered independent films. Bidding wars at Sundance have entered another realm because of the two providers. Independent film houses like Fox Searchlight have to spend big to stay in the game. And Amazon and Netflix can make films that Hollywood studio executives would never make because they are too worried about selling tickets. What will happen as others enter the fold? What will happen to Hollywood and the love it has for itself as independent filmmakers get more and more of a voice (like they did this year with Moonlight and the already mentioned Manchester by the Sea)? Will Hollywood adapt and change or will it turn into lore like the films that act as themes in La La Land?