If anything, the impact of digital technology is creating bigger brands and bigger superstars.
Anita Elberse
If you're a film studio, you're making a movie for a foreign market. You're pursuing ideas that travel well. It changes the movies we see and how movies are made.
Because making movies is such an expensive endeavor, other media such as books and comics have long been a more feasible way to experiment with truly new ideas.
Most of my colleagues have research awards on the shelf. I have party invites.
One problem with relying on existing concepts is that it could stifle innovation, weakening the film sector over time.
When a publisher spends an inordinate amount on an acquisition, it will do everything in its power to make that project a market success.
No one disputes that online businesses offer much more variety than their analog counterparts.
As demand shifts from offline retailers with limited shelf space to online channels with much larger assortments, the sales distribution is not getting fatter in the tail.
The entertainment business remains a business of blockbusters, and increasingly so.
What you get when you put all your resources behind a product, is you get everyone to join in.
For the first case I did with Octone, 360 deals were not at all being talked about. And then for the follow-up case, it was the focus. I wanted to see how things were changing and what the new challenges were.
Jay Z is building a range of businesses just on the strength of his brand. Lady Gaga has formed really interesting partnerships. Justin Bieber and his manager Scooter Braun are investing in a number of different companies and also promoting them in many ways.
I spend way too much time watching television, going to sports games, going to movies. It struck me that there's an awful lot of data in the public domain for these sectors. The movie industry publishes weekly sales numbers - not many industries do.
It's really not fun to have seen a movie that you want to talk about, and you can't find anyone else who's seen it.
Anyone can see that, say, superheroes and vampires perform well at the box office. That in turn can trigger competitive bidding situations and soaring fees for people who can bring these properties to the screen. The result can be a dramatic increase in the costs of production.
With so much money invested in their most promising projects, Hollywood executives will understandably do everything in their power to make their products a success in the marketplace. Therefore, the most expensive films often also get the highest marketing budgets, and are slotted into the most favorable opening weekends.
In investing, we intuitively think we should make a number of small bets. A blockbuster strategy is the opposite. It means making fewer huge investments. But it turns out to be safer.
Think about trailers you see in theaters. If you're seeing a Warner Bros film, the studio might have three of the five trailers. So having a hit helps you create the next hit.
If you are the record label who owns Lady Gaga, and you have a new artist coming up, you can say, 'Let's have the artist play just before Gaga.' Now you've exposed the huge Gaga audience to the new artist. It's similar to showing a trailer before a movie. The hit creates a hit.
The average movie-goer in this country sees six films in a year. That's one every two months. What the studios are trying to do is make sure it's their movie.
Most large media firms make outsized investments to acquire and market a small number of titles with strong hit potential, and bank on their sales to make up for middling performance in the rest of their catalogs.
Media companies' hit-focused marketing did not emerge in a vacuum. It reflects how consumers make choices. The truth is that consumers prefer blockbusters.
Because they are inherently social, people find value in reading the same books and watching the same movies that others do.
