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Business of Film Industry - Essay Example

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Business of Film IndustrThe paper "Business of Film Industry" is an outstanding example of a business essay. In the old Hollywood studios system, each studio was specialized in the type of films it produces. According to Epstein (2006), the Warner Brothers were suited for the production of social problem films and gangster movies whereas the Universal movie industry composed horror films to maximize movie sales…
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Extract of sample "Business of Film Industry"

Business of Film Industry

In the old Hollywood studios system, each studio was specialized in the type of films it produces. According to Epstein (2006), the Warner Brothers were suited for the production of social problem films and the gangster movies whereas Universal movie industry composed horror films to maximize movie sales. Each studio had its own personality, and each product had its values. The Producers determined movies produced by studios, as they were the main epitome of the film company. However, in the recent times, there has been a shift from old Hollywood to modern Hollywood. Customer views various film products that the cinema market produces differently in regard to the movie rating and age group (Epstein, 2006). Exploitation chain such as theater, free TV show, and pay TV programs help us understand the value of film industry and its macro analysis at the business level. Film exploitation depends on vertical and horizontal aspects, and they do not merge neatly to form a perfect circle (Finney & Trina, 2014). Until recently, a movie was released first in its country of origin before being watched in other territories. However, this does not apply in the modern time where most films enjoy the simultaneous release. Again, a movie was released first theatrically then through the DVDs and then the TVs. However, this has since changed. This essay outlines why Hollywood movie business has moved almost exclusively to delivering blockbuster entertainment.

The Hollywood film industry wants to make more money. The films, which sustain the widespread publicity and attains more sales, are the target for the Hollywood (Finney & Trina, 2014). People with opportunistic motives govern this business such that every production has to yield big profits to the industry. Hence, the industry is defined by money and power. For this industry to have money and power, it has engaged almost exclusively in delivering blockbuster entertainment such as Harry porter, Jaws, Titanic and Jurassic Park among others. Jaws was released in 1975, and it became a landmark blockbuster film (Finney & Trina, 2014). Produced in early summer, it dominated the peak season and earned lots of money. The industry started bringing changes into its business practices to increase its revenue. It adapted new and different types of business tools to improve the quality of its films and increase its production to capture the bigger market worldwide and make more sales (Finney & Trina, 2014). This has led the Hollywood, industry as a business; social and the cultural practice dominates the mass entertainment image making. The film industry is exclusively delivering blockbuster entertainment because blockbusters sell very well at home. With an excellent commercial, a professional director like Bay in the Hollywood, production of kids’ movies, robots, love movies, series and action movies are of the top quality and therefore have a huge demand at home (Kermode, 2012). Bay, a hit-maker directed Revenge of the Fallen, a blockbuster that sold very well at home. His other movies continue to play for eternity because of customer demand, and that is why the Hollywood industry has moved almost exclusively to delivering blockbuster entertainment.

Blockbusters films are in high demand in overseas markets, therefore, bringing in more returns. An example is Pearl Harbor blockbuster movie directed by Bay and Bruckheimer. The cost of this film was between $ 140-160 million (Kermode, 2012). Critiques thought the movie was going to flop because the expenditure was too high. After the crew was through with its worldwide theatrical shows, it earned $ 450 million worldwide for the industry (Kermode, 2012). Those who had earlier on criticized the cost of production for this movie and predicted that it would not penetrate the market got it wrong. Pearl Harbor, the blockbuster movie, became an absolute hit generating more money to Hollywood industry. This, therefore, shows why Hollywood film business is delivering blockbuster entertainment. Moreover, Pearl Harbor also became a success in DVDs because it coincided with the anniversary of the military disaster in the United States (Kermode, 2012). Many people overseas bought the DVDs for themselves and as a gift to commemorate the day earning the industry more revenues. Arguably, the film industry is delivering blockbuster entertainments because these movies are based on events- films, which make live headlines before the cameras are turned on (Finney & Trina, 2014). Things like directors slashing their salaries to meet the production cost, actor utilizing romantic phrases like Kate Beckinsale in the Pearl Harbor are all events meant to market the movies before they are released to theaters (Finney & Trina, 2014). By the time the blockbuster movies are released, thousands of people in overseas markets will have made up their minds to buy the tickets and watch out of curiosity due to earlier controversies. This is an advantage to the Hollywood because it cashes in millions of dollars from the blockbuster movies. Hence, the reason why Hollywood industry is delivering blockbuster entertainment.

The blockbuster movies are profitable as depicted by the film statistical analysis of Midas formula (Epstein, 2006). Their theatrical audience is not limited nor the television channels showing them. Merchandisers associating products with these movies are also not limited. As a result, these Movies have a higher chance of reaching break-even point than those movies not following the Midas formula. For instance, the Harry Porter, Spiderman, and the Two Towers sold millions of dollars both in the US and Foreign market (Epstein, 2006). Those films, which do not follow the Midas formula, have limited audiences, less airing, and few advertisements. Even though it happens the movies which do not follow the Midas formula break-even, their revenues would be divided with the stars like in the case of Arnold Schwarzenegger who is entitled to a share of the gross income, further diminishing the studio’s profits (Epstein, 2006). Though the Midas formula is attractive in making money for Hollywood, the American community does not fully appreciate their works. For instance, they do not have room for nurturing and fulfilling their creative expressions and recognition. Non-formula movies have no chance of becoming billionaires’ thus Hollywood film industry being in business, would not want to associate itself with such films but engage itself in delivering blockbuster entertainment that follows the Midas formula in the effect becoming profitable (Epstein, 2006). Hence, Hollywood has resolved to almost exclusively offer blockbuster entertainment.

Hollywood is delivering blockbuster entertainment due to its benefit from studio approach. Here, the studio develops its underlying rights (Kermode, 2012). It is in charge of producing, marketing and distributing the film. Distribution takes the form of the domestic theatrical window then followed by the home videos, the DVDs free TVs, paid TVs, video gaming and the merchandising opportunities (Kermode, 2012). These windows have created the exploitation phase for the industry to make more revenues from the film. In instances where the movie’s sales from theater tickets are less, the studio can still compensate from the sale of DVDs, gaming videos and advertisements from TVs on a blockbuster. This approach mitigates risks resulting from the production and distribution of films (Finney & Trina, 2014). Studio approach has also helped Hollywood to exploit through the horizontal integration whereby they cover production and the audience. They maximize this by filming, gaming production, television and distribution instead of narrowing their consumer clientele to one demographic group. By acting as gatekeepers, studios attract top talent and the very best projects at reasonable costs through negotiations with suppliers. Thus, Hollywood is delivering blockbuster movies to benefit from studio approach (Finney & Trina, 2014).

Blockbusters have a tendency of promoting conservative values and ideologies (Finney & Trina, 2014). These are values and ideologies treasured most by millions of people worldwide. Blockbusters promoting such values will be welcome by the audiences universally, and Hollywood will cash in from millions of theater fans. In most occasions, these films are like magnets to consumers who are mostly obliged to watch them once released. Since blockbusters have a higher demand in the marketplace, Hollywood has resolved to deliver such films for entertainment (Finney & Trina, 2014). An example is Spielberg’s E.T, which features on the consequences of divorce on the children and difficulties resulting from absent fathers. There was a high rate of divorce in the United States of America prior to the production of this blockbuster. People were getting concerned, and they feared the children would be mentally affected. Hollywood saw the opportunity to produce Spielberg’s E.T to address this issue of divorce (Kermode, 2012). Since the movie addressed the issue that touched the lives of millions of people, many bought the tickets to watch the film once it was released in the theaters and learn more on divorce. From this blockbuster movie, the industry generated massive profits, and this served as an example that Hollywood can use conservative values and ideologies to make blockbuster movies and as a result cash on them (Kermode, 2012). With this in mind, Hollywood is almost exclusively delivering blockbuster entertainment.

Blockbuster films are often pre-sold to determine whether the movies will attain the set profit margin (Epstein, 2006). They focus on the scripts that the audiences have interacted with in earlier movie experiences. Examples are the films based on bestsellers, fairy tales, plays and the classic novels. In so doing, the audience will not hesitate to watch the film once released, and this is an easy way for the Hollywood to find a quick and ready market for its movie (Epstein, 2006). The advertisement department will not spend heavily on popularizing the movie among the people because the audience already knows the storyline. It will only concentrate on a particular age group that it wants to target (Finney & Trina, 2014). Saving on the advertisement costs will mean that Hollywood will make more gains from the blockbuster entertainment, and that explains why Hollywood is delivering blockbuster entertainment.

Blockbuster movies are big films (Epstein, 2006). These films encompass all that that is needed to categorize as profitable and successful. They also have eye-catching film trailers and most of these movies get considerable ratings by the meta-critic. They have an excellent identity and most importantly, these films are attractive to the youth who form the part of the market in the film industry (Epstein, 2006). Being the Big-films, the Hollywood industry has decided to invest in such films because the probability of making handsome returns is high. That is why the industry has moved to exclusively delivering blockbuster entertainment. These big films display the latest technologies while featuring in theater and public cinemas (Kermode, 2012). The latest technologies are what youths in societies would want to see and adore. They are bait to the teenage movie goers who dominate the market of the film industry. Hence, the Hollywood business is moving towards delivering big films blockbuster movies to tap the vast market of the youths and make billions of dollars continue being at the top in the industry. An example is the Universal’s action movie of Two Fast Two Furious released in June 2003, which in its advertisement featured the images of the cars crashing (Kermode, 2012). This movie had a successful launch of $ 50 million. Most of its audience in the theater were youths who came to watch the cars breaking, guns firing and other complicated machines are featured in the movie. Big films are a success in this industry and that is why Hollywood is delivering blockbuster movies to be part of its success story (Epstein, 2006).

Authentic companies license the films to prevent any issue of movie piracy (Finney & Trina, 2014). Recipients of these grants are enterprises making products, which amuse the children, preteens, and the teenagers to maximize on movie sales. For instance, the Walt Disney was the first to get this permit and in the 1930s, the Mickey Mouse animation was approved to the viewers, publications, textile and the toy manufacturing companies (Epstein, 2006). Royalties from the animated characters brought in more profits than the movies they starred. Profits from fees continued to grow as years passed by. Hollywood has moved to blockbuster entertainment to benefit from these charges whose revenues are pure profits. Licensable characters in Hollywood from blockbuster movies exert an enormous influence over the retail sales. For example in 2000, the movie based characters earned$ 40 billion from sales all over the world which accounted for over one-third of the sales for the licensing industry (Epstein, 2006). Characters in the movies outlive the movies they Starr in. Therefore, royalties from these movies will continue to enrich Hollywood for many years. Thus, Hollywood is delivering blockbuster movies to tap on the royalties on licensed merchandise.

Hollywood industry’s desires to produce films with huge budgets has seen the industry providing blockbuster movies (Epstein, 2006). The objective of the industry to produce films that would become hits has made the industry create expensive movies to compete in the market. Hiring top stars and modern directors to produce the best films in the industry has seen Hollywood drifting towards delivering blockbuster entertainment (Epstein, 2006). The industry’s efforts to produce films that would gain popularity worldwide that would go beyond theaters and those that would be the talk of everyone has seen Hollywood delivering blockbuster entertainment. The determination of providing quality movies to the consumers in the movie industry promotes the success of blockbusters movie store (Finney & Trina, 2014). However, these blockbuster films are expensive to promote. The industry has to spend more to attain maximum sales. The poor advertisement will lead to few tickets sold and will be a blow to the film industry, which had spent heavily in production. An example is Sony’s Hollywood Homicide of 2003, which had a weak opening of $ 11.1 million due to poor advertisement strategy (Epstein, 2006). The film failed to draw the anticipated audience from the opening day to the weekend. The hunger of Hollywood to produce films that would sustain widespread publicity and attain enormous sales has led the industry to deliver blockbuster entertainment

In conclusion, Hollywood movie business has moved to delivering blockbuster entertainment as these films sustain widespread popularity and therefore makes more sales both at home and at the overseas markets in effect, generating more revenues. Hollywood wants power as it intends to dominate the film industry with the worldwide exploitation systems having the greatest share in the movie market all over the world. Hollywood industry benefits from royalties of licensed merchandise. Royalties from blockbuster movies will enrich Hollywood industry for many years. Blockbuster movies are well known for featuring themes, which are familiar to the audience and therefore get the ready market in short they are pre-sold films. These movies are big films in the entertainment industry although very expensive to produce since they use the latest technologies in their making and thus increase the cost of production. They are also very costly to promote to reach the target audience.

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