The signs are everywhere that the film industry is struggling, from the current dry spell at the box office to exhibition giant Cineworld filing for bankruptcy earlier this month. But the movie business is actually more profitable than it’s ever been, according to the CEO and founder of Blumhouse Productions.
Jason Blum and his company’s new president, Abhijay Prakash, were positively bullish about the state of cinema in a joint keynote appearance last week at Variety’s Entertainment & Technology Summit Presented by City National Bank. While acknowledging that it’s highly unlikely that the box office will return to it its pre-pandemic peaks, they testified that the rise of streaming has only helped monetize movies more effectively in later release windows.
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“The amount of ancillary value a movie makes is almost twice what it was five years ago,” said Blum in an interview excerpted on the latest episode of the Variety podcast “Strictly Business” (at the 28:36 mark), which also features a Summit interview with Disney’s Kareem Daniel. “So if I have a movie that makes $100 million, the amount of money I’m going to make from all the ancillaries is almost equivalent to a movie that five years ago would have been $200 million.”
The rearrangement of release windows also helps producers by not requiring that studios do separate promotional campaigns for theatrical release and home video anymore. “We have not increased or the studios haven’t increased how much they spend on marketing,” said Prakash, who knows the studio side well from his days at Universal Pictures. “So not only you’re getting that return, you’ve added windows that are earlier, that don’t require extra marketing. And so you’ve got no real increase in the cost side, you’ve got much more revenue coming in.”
Blum noted that those who focus only on the box office returns are missing the point. “Even though what gets written about is, ‘This movie only did $30 [million], it would have done $60 [million].’ But actually, the movie that just did $30 will ultimately make us more money than the one that did $60 five years ago.”
Blum and Prakash also discuss on the podcast their ambitions to move the streaming business away from the cost-plus model in order to share in the upside on content they produce, as well as Blumhouse’s efforts to match the success it has experienced with films like “The Black Phone” and “Get Out” on the budding TV side of its business.
Daniel, chairman of Disney Media and Entertainment Distribution, addressed the delicate balance between servicing the company’s linear TV and box office needs with that of its burgeoning streaming assets. “Fundamentally, we’re going to drive streaming growth,” he said. “We have our goals, we are going to hit those goals. But we can also have tremendous success in networks and theatrical.”
“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. A new episode debuts each Wednesday and can be downloaded on iTunes, Spotify, Stitcher and SoundCloud.