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making the sausage

Polone: The Main Reason TV Is Now Better Than Movies

I recently stepped into an elevator where a woman was practically orgasmic recounting to her friends things Bryan Cranston’s character Walter White did and said during a recent episode of Breaking Bad. Later that same day, a guy next to whom I was seated at a poker table complimented me on a movie I produced. I asked him if he went to the movies often and he replied, “No, not as much as I used to.” I asked what he did now instead of going to the movies and he said, “I stay home with my girlfriend and watch Netflix.” When I asked him what he had been watching, he went through a short list of TV series — which included Breaking Bad. 

Without doing a scientific survey of the entertainment predilections of the American public, I can still confidently say that there appears to be a preferential shift away from movies and toward television. I would bet that you have noticed that your friends are more excited for new episodes of a favorite show than they are for the release of a super-hyped studio tentpole movie. Sure, some of the reason for there being more good TV shows than movies is arithmetic: There are more networks producing series than ever, and also it is much more convenient to access those shows on your DVR or streaming service. But there's more to it than just volume and convenience. The most significant reason TV is favored has to be the overall malaise that has taken hold of the movie audience, which is illustrated by the oft-heard phrase, “There is nothing out worth seeing.” Yes, there have been a few successful sequels this year like The Dark Knight Rises, and remakes like The Amazing Spider-Man, and sequel–remakes like Independence Day with Super Heroes a.k.a. The Avengers. But when was the last time you saw a non-animated studio film and thought, “That’s a classic,” something on the level of Goodfellas, Raiders of the Lost Ark, One Flew over the Cuckoo’s Nest, or Lawrence of Arabia? Of course there have been independent films that may have risen to that level. But when you’re dealing with a mass audience, it is the studio releases that reach the majority of moviegoers, and the studios don’t seem to be delivering the goods as they once had. This explains why in 2012 the number of theater admissions is going to hit a nineteen-year low, while the population during that period has increased from 258 million to 313 million. And I believe that a significant part of the blame for this downward trend can be found in how the studios have changed the process of deciding which movies they will make and distribute.

“Fifteen to twenty years ago, it was up to a single person to decide if a movie was greenlit, and then it got served up to the distribution organization as something they had to deal with,” a studio production president, whom I'll call Exec A, told me. Now, however, decisions are made much more by consensus, with the last step in the process being the greenlight committee meeting where, Exec A explained, “department heads of domestic distribution, international distribution, television, and home video are there with their financial projections on what the movie will do in their area and then we go through the model," which is a profit and loss analysis of the projected performance of the project. "If anyone has a reservation," adds Exec A, "they are supposed to say it in the meeting. But if they had one, they’ve already expressed it before the meeting. Six to 24 months before, we’re socializing the movie with everyone,” which is to say letting people know about the project and getting their feedback. “It’s like you’re Evel Kneivel testing the bike up the ramp but you’re not going full throttle until you’re sure you’re going over. At my studio, I don’t think a movie has been put up for a decision that hasn’t been greenlit.” It is a fait accompli, not unlike the Democratic and Republican conventions; the studios’ primaries take place before the actual delegate vote, with the obvious losers dropping out.

A production president at a different studio, Exec B, outlined a similar practice at his studio: “We start the process much earlier in pre-greenlight meetings, where we can talk about what’s coming down the pike. If we can’t find consensus early, we let [the project] go.” Unlike the old days, when a single executive could push something through, Exec B says that “one person advocating matters less than it used to. It is not the way a slate gets built.  There isn’t room for that single voice of advocacy anymore.” But, he adds, “I do believe if you’re making decisions based purely on a P & L, you couldn’t greenlight an entire slate. There has to be one or two projects that are about everyone loving it."

That may not seem like much, but a vice-president at a third studio, Exec C, explained that his studio wasn’t even that flexible. “We’re not making a movie that isn’t a smart business decision,” he says, explaining that fear of advocating a potential loser makes department heads “conservative in their projections. Almost no movie makes sense on paper. If the glass is half-empty or half-full, it is always half-empty. The way it used to be, it was ‘we believe in this, let’s go make the movie.'”

I asked Exec A if his studio would make Terms of Endearment or Kramer vs. Kramer today. "Probably not," he replied. "Every studio has $500 million to $700 million in overhead to run their whole organization. A small drama, if it works, can make good money but isn’t enough to justify the overhead that is apportioned to that release slot. Therefore, the little drama is disadvantaged through the greenlight process.” While both Execs B and C said their studio would probably make Terms of Endearment and Kramer vs. Kramer, neither thought there would be more than one or two movies of that size and type on their slate in a given year. 

In many other fields, consensus decisions like the ones that studio execs work out always result in more compromise and the moderation of strong opinions in order to come to a mutually agreeable conclusion. In politics, for example, candidates often start out idealistically, with more extreme positions that they later temper to gain more votes in the general election; this serves to effect policy that works for the whole electorate. But making creative product is very different than politics and too much consensus building just dulls a project’s vision, making it mushy and less bold.

Further, the process of building financial models for each prospective project inherently leads to more derivative movies getting made. All projections are based on comparisons to prior films: For example, to come up with his projection on a proposed big-budget sci-fi remake, the international distribution executive at a studio will “run comps” on the overseas performance of movies like Star Trek and Tron: Legacy. But this means that projects that are more similar to movies that did well in the recent past are going to generate better comps than films that are more original and therefore can’t be compared to something else. This is why you feel like you’ve already seen a lot of what is being released in theaters this year and why little if anything new at the multiplex seems special.

Television, on the other hand, works differently.  There are too many networks now competing for attention and they don’t have the luxury of spending the huge sums movie studios can to cut through the marketing clutter and get the consideration of the potential viewer. So, they have no choice but to make shows that stand out from everything else based on their quality and distinctiveness. That is why, in recent years, you’ve gotten to watch not only Breaking Bad, but also The Walking Dead, Sons of Anarchy, and Homeland. None had pricey CGI, huge stars, or a flashy, unavoidable ad campaign; all they had was terrific writing, acting, and originality that made people want to recommend these shows to their friends.

Fortunately, the movie studios have just been hammered hard enough on such derivative summer movies as Battleship, Dark Shadows, and Total Recall that they are seeing a need to change what they’ve been doing before the audience pulls farther away from them. “There’s a certain amount of disenchantment out there,” Exec A said at the end of our interview. Exec B summed it up this way: “I think as recently as two years ago, a mediocre big action movie could be made at a price point where the international numbers let you get out alive. This year it is different. You can’t get away with it. Audiences are too money-conscious and tickets are too expensive. Particularly domestically, they’re not showing up for the middle [i.e. stuff that is just passable]. Quality is everything.” 

So does this mean the end of the greenlight meeting and going back to a single visionary making the decisions on his own? No way. The major studios are public companies, and when a CEO has a huge failure, they need the back-up of many executives on the record with their data to explain that the loss was an unforeseeable mishap rather than a negligent error. But I do think that there will be a move to adjust projections so that the originality of a potential project is given credit and not seen as a liability. Especially at the studios that decided to make surprise hits Ted and Magic Mike, neither of which could have generated big comps and therefore probably didn’t model well. Even more so, I would hope that a lesson has been learned at the studios who decided to pass on those projects because they thought the numbers didn’t add up.