[KaiserPro]

Ahh, but therein lies the rub. The movie-making business is fine, its the disties that are the problem.

The problem is this, a good movie is subjective. Go to your local movie festival, 90% of the entries will be clichéd lumbering trite. 7% will be good by comparison, but you wouldn't recommend them to your friends, much less bet money on them. This leaves 3% that are quality. Of that 3% 20% might be profitable.

People go to cinemas to see movies that interest them. If they go to a cinema, they understand that the content is hand picked and is going to be high quality. This is how HBO works. They select scripts/concepts that they think are good. They are overwhelmed by wannabe directors who are frankly rubbish. In the same way the a good VC is overwhelmed by instagram clones.

There is a need for a gate keeper, to maintain quality. arguably these gate keepers are more likley to be TV execs (HBO bankrolled the new Liberace movie) or people like netflicks

[araes]

Jumping off of the HBO love, it seems they are often an example for what works in this new era, and I don't disagree that they've got a good strategy. However, another that seems often discounted, but which has proven extremely resilient is the path of Disney.

As TFA noted, where many studios are often prey to the talent agencies, Disney has done a remarkably good job of investing in and building their own roster of exclusive star power (not only actors [Gomez, Cyrus, Swift, Jonas, the list goes on and on and on http://www.imdb.com/list/20w9iZGsCI0/ ], but writers and directors too). This has allowed them to develop a vast array of content for relatively low cost as they lock in talent early and then build them over time through cross exposure in a variety of mediums and cameos.

In addition, this is good for the talent itself. There's a lot of nature to who becomes a star, but there's also a hefty dose of nurture. Disney grabs these folks when they're nothing and then helps them to get the often quoted 10k hrs to become "masters" of their craft. At any one time, Disney has probably 50-100 (I may be low-balling this) exclusive actors across a range of ages, that live within the ecosystem of Disney channel, Internet vids, Disney movies, park attractions, animated voice work, Disney concerts, and subsidiary tv.

Furthermore, they're constantly working to buy or build compelling new stories for these actors to exist in and connect with their audience. What were Marvel, Lucasfilm, even Pixar, if not purchases of compelling story properties? Marvel alone has given them so much to work with that they'll be cranking them out for years.

Folks like Netflix or aspiring competitors would be wise to look at their model. It gives you: low costs (talent early in their careers), low risk (wide pool of cheap folks gives you more chance to fail), high end pull (after 10k, people like Cyrus are talented and have draw), and lock-in exclusives (nearly every person at Disney is Only Disney). As I think about it, there's actually a lot of parallels between this and the Nintendo strategy as well - another company that's been around Forever. You just refuse to play the same game everyone else is pushing for. Movies may be 65 billion, but Disney has become 10 billion all by itself.

[johnchristopher]

Jumping off of the HBO love, it seems they are often an example for what works in this new era, and I don't disagree that they've got a good strategy.

Yeah, well... They still killed Carnivale a season too soon.

[guard-of-terra]

If there is a need for a gate keepers, why do they pass bad movies? And most movies on the screen are mediocre at best. And they also lose money.

[KaiserPro]

Because its exceptionally difficult to predict a market three years plus in advance. (which is why studios play it safe) and independent movies are highly risky, and nobody has the cash to bring them to wider release (even if they win a sundance award)

[moocowduckquack]

Hollywood did pray and spray investing long before the VC market hit onto it. The studios assume that the vast majority of films will not make money and that it is really hard to know which ones will do so in advance of them being made. So instead of spending a lot of time trying to select successful films, the studios try and spread the risk by investing wide and accepting that some years they will lose money. In the years where they lose money, the press then report that hollywood is in danger, whereas most of the studios have already budgeted for the losses.

[guard-of-terra]

No they don't invest wide. You have a few "wide" films a year. What you have is a stream of movies which are ordinary, mediocre and unsuccessful. Why fund that?