The current Hollywood business model and the demise of off beat cinema

Lately, I've read a lot of online articles about the state of blockbusters and family entertainment and how such a narrow focus is ruining movies. But I think these articles are missing the main problem. If you think about it, the fault lies in the current business model adopted by the studios, which is leading to the blockbuster/family trend invading the cineplexes and forcing out smaller, independent films.

I think the studios are trying to maximize each movie's potential return by thinking like a short term trader. First, each movie is designed to make a shitload of cash on opening weekend. This involves making the film more of an event than anything else, and opening it in as many theaters as possible (often on two or more screens in the same multiplex). Then, as income trails off after the opening week, pull most of the prints, allow it to be shown on a few screens, but open the main theaters for the next cash cow. Every film is designed with the intent of generating massive returns in a short time, then dramatically scaling back the release to make way for the next blockbuster.

This strategy is also affecting home releases. The studios have closed the gap between a feature's theatrical run and home video release and want to tighten it further. Look at the outcry from theater owners in Britain when Disney announced the home release date for Alice in Wonderland by 5 weeks. Back when VHS releases became affordable for home purchase, you might wait up to a year before a film hit the market.

A shorter release window makes sense, if you subscribe to the idea of studios acting like short term brokers. The quicker the home release date, the faster the return comes in on your investment. And a quicker release date probably means more impulse buys, as the movie is fresh in the minds of consumers.

Of course, to maximize the profitability of any movie, one has to appeal to the largest demographic possible. As the teenage market seems to be fading (thanks to online sources, if you believe the studio's stance), Hollywood is targeting the family market. And, if you want a big return, it makes sense. A family of four attending the latest 3D cartoon will likely spend more than $100 at one screening (tickets, snacks, glasses, etc.). And you have a built-in audience for the DVD release, as the kids will want to watch the film at home, again and again.

The search for the largest audience is also the reason why most films try for a PG-13 rating, rather than an R. Families can go (with older children) and teens can walk into the film without a parent. The downside is that leaves anyone looking for something different are forced to wait for the months of late August to early November, or January to April, if they want something with more bite, intelligence or weirdness.

Unfortunately, that window is narrowing. The summer blockbuster season starts earlier each year (Iron Man 2 was released in early May, weeks before the traditional Memorial Day start of the big movie season). And often, the movies that make it to the theaters after the winter big releases tend to be blockbusters gone bad (seen the preview for The Green Hornet yet?), rather than low budget or independent films.

You can spend a lot of time blaming blockbuster and family movies for the lack of decent films coming out of Hollywood. But I believe it's the studios sticking to a model that will generate the greatest amount of money in the shortest amount of time.