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Is the Blockbuster a Dangerously High-risk Strategy or a Sign That the Hollywood of Media Conglomerates Has Found a Reliable Formula for Guaranteeing Profits and Market Domination?

An understanding of the commercial strategies used by contemporary Hollywood.

By the late 1950s the Classical Hollywood period was over, due to the Paramount decree in 1948. A new cinema era was upon Hollywood. This new era was post-classical Hollywood, or the New Hollywood. A new form of filmmaking began in the 1960’s, however it wasn’t until the 1970s that it really took off, and became a multi-million dollar industry.
    In the late 1960s the Blockbuster genre of film began, yet it wasn’t until 1975, with the release of Stephen Spielberg’s Jaws that the blockbuster really took off, and the film media conglomerates realised that there was massive potential and money to be made here, with this new “genre” of the Blockbuster movie.

‘Originally coined to describe a large-scale bomb in World War II, the term was taken up and used by Hollywood from the early 1950s on to refer on the one hand to large-scale productions and on the other to large-scale box office hits.’ (Neale, 2003, p.47)

    Top media conglomerates believed that if they spent a lot of money on a film, and went all out on special effects and distributing a film then it was bound to reap the rewards, and be a box-office smash. However not every Blockbuster gamble is a success, and film companies can lose millions on one film, and some even go completely bankrupt, thus posing the question, is the Blockbuster a dangerously high-risk strategy or a sign that the Hollywood of media conglomerates has found a reliable form of filmmaking for guaranteeing profits, and so dominating the film market? There are a lot of different opinions about the Blockbuster movie. Some believe that this genre of film has ruined cinema, and changed it from being a form of art to being another way of making more money, where as others agree that the New Hollywood era sparked a modern and creative way of filmmaking, one that could compete with the growing generation of television, and make audiences still want to go to the cinema. As much as the Blockbuster is a dangerously high-risk strategy, due to marketing, distribution, merchandise, and sequels (to name a few) the Blockbuster, thirty years on since Jaws catapulted onto 464 cinema screens, is still attracting people into the cinema, whether it be the movie is highly successful or not.
    In 1938 the USA decided to file a suit against the five main distributors of motion pictures, Paramount Pictures, Warner Bros., MGM, Fox and RKO. These corporations were monopolizing the distribution of motion pictures, and block booking all future releases of films to their own theatres, leaving no releases for independent productions to book. In 1940 the big five studios and the Government came to an agreement behind closed doors. However the little three, Universal Studios, Columbia Pictures and United Artists, did not agree with this decision, therefore placing the problem right back where it started. The big five were allowed to block book again until the case was re-opened. In 1941 independent producers joined forces with the justice system to end the big eight. They called themselves SIMPP (The Society of Independent Motion Picture Producers) and by 1948, exactly ten years and one week since the suit was filed, the Paramount Decree was passed and slowly the big eight started to dissolve, and divorcement decrees were formed. They called it the ‘Declaration of Independence’ because that’s exactly what it was for independent studios. Now that films had to be sold individually the larger studios could no longer guarantee being able to sell all of their productions. The Paramount Decree really did mark the end of Classical Hollywood in 1949. There was a massive reduction in the number of films made, and budgets were even increased as films had to be sold on their own merits. Between 1950 and 1964 the major film production companies were making 200 fewer films. The television had become more common in the family home, and so the big companies had to come up with something new and drastic to pull the audiences back to the big screen.
    Between 1967 and 1975 a new process of filmmaking was taking over in Hollywood, a Renaissance was upon us, the Auteur Renaissance. This meant that directors were now having complete control over the production of a film, the distribution and the exhibition. The director’s name on a film had become the brand name of the film. Steven Spielberg would be the ultimate director from the Auteur Renaissance, along with George Lucas and Francis Ford Coppola. And so it was in 1975 that Spielberg made Jaws, the film that marked the emergence of the Blockbuster movie. Production companies believed that to compete against the television films now had to be even more special and spectacular. The film was budgeted to cost around $3.5 million, but due to promotion expenses and quite a few mechanical shark problems it is estimated to have cost around $8 million in the end. The film Jaws was a pre-sold film as it was based on a novel by Peter Benchley, who also wrote the screenplay. Like The Godfather and The Exorcist, movie rights to the film were bought before the novel was even published, and although The Godfather was also hugely successful in 1972 it was the new way of releasing and marketing Jaws that made it the film that started New Hollywood and the Blockbuster. The film was released to cinemas via saturation releasing. Hundreds of screens ‘rented’ the movie and so they could guarantee enough profits to cover production if the film is unsuccessful. Of course production companies would have to pay for all the extra prints they would need. Jaws was also marketed very differently to how films had been in the past. The film was advertised on the television and the radio, but the advertising strategy that really put this film on a pedestal was the score that accompanied the film everywhere. John Williams wrote the popular theme tune for Jaws, as he did for most films in the 1970s, and it was this catchy piece of music that invoked fear and curiosity into so many, so much so that the cinema’s were heaving in the summer of 1975. That’s another commercial strategy that contemporary Hollywood used, they released this costly Blockbuster in the summer. Normally high-budget films were released around the Christmas holidays, however due to the theme of the film Universal Studios felt that a summer release would be more appropriate. Since then big-budget films were (and are) mainly released in the summer or at Christmas. Since the success of Jaws, which grossed $260 million domestically, numerous big-budget films have been made that manage to top the success of Spielberg’s Jaws, such as Star Wars, E.T, Indiana Jones, Jurassic Park, Independence Day, Titanic and Pirates of the Caribbean. However, many big-budget films have also been made that barely grossed enough money to cover production and marketing expenses. One film in particular is Kevin Reynolds’ 1995 film Waterworld. At the time this film was seen as the biggest box-office flop of all time, having cost $175 million, and only grossing $88 million in the US (only making just over 50% of the budget). Of course this wasn’t the first, or the last, costly mistake that production companies have made.
‘There were blockbuster disasters before Heaven’s Gate, including Cleopatra in 1963, made for an estimated $US44 million, and Steven Spielberg’s 1941 (1979, $US35 million). There have been many since, such as Waterworld (1995, $US175 million) and, more recently, Hulk (2003, $US120 million) and Alexander (2004, $US150 million). All returned only a fraction of their costs. And doubtless there are plenty of others to come.’ (Ryan, 2005)

 Directors and production companies are permanently taking risks with big-budget films, and questioning whether they will make a valid profit. In 1968 Roman Polanski’s Rosemary’s Baby was surprisingly successful as an arty horror film, yet in 1986 Polanski directed Pirates, which cost $40 million to make and only grossed $1.6 million, a mere 4.1% of the budget. Although in the past there have been many box-office bombs, production companies like Paramount Pictures, Sony Pictures, Twentieth Century Fox, MGM Studios and Universal Studios still like to take the financial risk and gamble when taking on a big-budget movie. They still feel they will reap the financial rewards at the box-office. Yet does the credibility of a film suffer when it comes to guaranteeing profit, are the plot and special effects becoming more important than a characters importance? Some critics certainly believe that George Lucas is guilty of this in the Star Wars films, while other critics feel Lucas and Spielberg are to blame for the lack of narratives and artistic ness in films today.
‘Lucas and Spielberg have changed everything, not just the way the industry functions and directs its own ambitions but the scheme by which film history is now perceived…This is not just a lamentation that movies are in a bad state. Rather, I fear the medium has sunk beyond anything we dreamed of, leaving us stranded, a race of dreamers. This is more and worse than a bad cycle. This is something like a loss of feeling, and I blame Spielberg and Lucas.’ (Thomson, 1996, p.56 cited in Lewis, 2005, p.62/63)

Critics also argue that as well as the Blockbuster trying to be a genre, but at the same time covering many genres so that it appeals to a wider audience, it is still, after thirty years, always going to just be an expensive action-adventure movie. It is also suggested that Hollywood is just imitating past successful films, they’ve replayed the sequels over and over so now they’ve found a way of returning to the beginning and starting the trilogy’s again.
‘…. though they are not precisely sequels to Spielberg’s Indiana Jones films, distinctions between the two recent Mummy pictures (The Mummy [1999]; The Mummy Returns [2001]), the computer game spin off Lara Croft, Tomb Raider (2001), and the genre prototype, Raiders of the Lost Ark (1981), are subtle.’(Lewis, 2005, p.66)

Of course the popular Blockbuster film cannot only be profitable via the box-office takings, but also by the other media forms that can be produced through the success of a film.

‘Perhaps in pop music, and not only as a hit single or musical score; note that Batman had two soundtrack albums and Dick Tracy had three. Perhaps as an arcade game, a $7 billion industry in 1990; note that Hook and Terminator 2 both were released simultaneously as movies and video games.’ (Schatz, 1993, p.29)

Media forms are not the only ways successful movies can make money though, film merchandising is a very common way of further profitability, whether it’s a plastic T-rex from Jurassic Park or a Superman costume for a five year old.
    Media conglomerates tried to dominate Classical Hollywood, and after a suit was filed against them and the decree finally passed, the Classical period was over. Due to the decree there was space for independent films to be made, and many were doing better than the big-budget epic films in the late 1960s, Bonnie and Clyde (1967), The Graduate (1967) and Bullet (1968). Companies that had survived the Paramount Decree ploughed money into these films, but in the long haul it was the Blockbuster movie that broke through and topped all sales in rentals. With the new commercial strategies that Hollywood introduced, the Blockbuster was bound to have a large impact on how film production companies now worked. I believe that the Blockbuster is the best solution for the Media Conglomerates in respect to guaranteeing success. Some critics might argue that film is no longer an art form and there’s no room left for independent art films or foreign films in the market, yet there are plenty of successful independent films today, as well as successful Blockbusters. In 1999 Daniel Myrick directed the low-budget horror film The Blair Witch Project. It cost about $60,000 to make and managed to make about $248 million domestically, making this film (at that time) to have the highest ever profit-cost-ratio. With independent companies like Artisan Entertainment making such a successful film it makes me wonder why so many companies are intimidated and worried by the release of a Blockbuster.
    Big-budget films are still being made today, they are still released using saturation releasing and they are even now successful films that lead to sequels, merchandise, famous actors and popular theme tunes. Not all are as successful as the producers would like, however not many are as disastrous as Waterworld (1995) was. The Blockbuster will always pose the risk of being a dangerously high-risk strategy, however I do think that Hollywood has found a solution, for now, where by the media conglomerates can rely upon this formula for guaranteeing profits and (slight) market domination. There will still be many successful independent productions, however it was Jaws, a Blockbuster itself, which brought Hollywood into the post-classical era, the New Hollywood.

Word count: 2,161


Balio, T., 1985. The American Film Industry. ed. London: Wisconsin Press.

Easthope, A., 1993. Contemporary Film Theory. ed. New York: Longman Publishing.

Maltby, R., 2003. Hollywood Cinema. 2nd ed. Oxford: Blackwell Publishing.

Lewis, J., 2005. Following the Money in Americas Sunniest Company Town: Some notes on the Political Economy of the Hollywood Blockbuster in:
J. Stringer, ed., Movie Blockbusters. London Routledge, 2003, pp.61-71.

Neale, S., 2003. Hollywood Blockbusters; Historical Dimensions in: J. Stringer, ed., Movie Blockbusters. London Routledge, 2003, pp.47-60.

Ryan, T (2005) In defence of big, expensive films. (online) Available at: http://www.theage.com.au/news/film/in-defence-of-big-expensive-films/2005/07/14/1120934352863.html
(Accessed on 10/01/07)

Schatz, T., 1993 The New Hollywood in: J. Collins, H. Radner and A. Preacher Collins, ed., Film Theory Goes to the Movies London Routledge, 1993, pp.8-36

Wilkipedia, (2006) Blockbuster Bombs (online) Available at: http://en.wikipedia.org/wiki/Blockbuster_bomb
(Accessed on 15/01/07)

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