Filmmakers typically fund their own films for about US$20,000 and shoot in one week. Over their career filmmakers may direct 100-150 films. New movies are sold in street markets on video CD and VHS directly to customers. Piracy is not a big worry when a director is releasing new films every couple weeks.
For more info, I recommend the documentaries Nollywood Babylon, This is Nollywood, and Welcome to Nollywood.
DreamWorks had come close to bankruptcy twice.the studio suffered a $125 million loss on Sinbad: Legend of the Seven Seas, and also overestimated the DVD demand for Shrek 2.In 2005, out of their two large budget pictures, The Island bombed at the domestic box office, while War of the Worlds was produced as a joint effort with Paramount. They eventually ran out of money. DreamWorks scaled back, stopped plans to build a high-tech studio, sold its music division and got out of the distribution business. They eventually ran out of money and sold the company to Paramount pictures. The deal was valued at approximately $1.6 billion, an amount that included about $400 million in debt assumptions. it's a lot harder to start a studio than you guys think.
Of course, there's Pixar. but you need a SJ and a John Lassetter to create something like Pixar.
In terms of scale, Dreamworks was designed to compete directly with the majors. They focused on tentpole pictures produced at Big Six scale. Even with their substantial financial backing, this meant that a single flop could (and did) jeopardize their company. Corman's films, on the other hand, with their minuscule budgets needed only draw a fraction of the business of a Dreamworks release to make a profit and so very rarely (if ever) showed up as a "loss" on his books. Corman's films rarely hit it big, but because of their relative costs, they never had to. Modest returns were sufficient for him to draw profit margins astronomically beyond those of the majors.
In terms of intent, Dreamworks was set up primarily to produce and release the films of its founders, who tended to trade in prestige films, and their desire to produce only Oscar-level films tended to paralyze their production ability; excessively high standards ruined them. When they did get a film off the ground, they tended to bet too large (out of desperation) and lost as frequently as they won. The exact same thing happened to Coppola's Zoetrope when he let himself run amok on One From the Heart.
The lesson from Dreamworks (and Zoetrope) is to manage your risk. Never put yourself in a position where a single failed project can ruin you. Similarly, never produce a film that requires broad mass market success to avoid total financial failure.
>never produce a film that requires broad mass market success to avoid total financial failure.
You'll avoid financial disaster but you'll never "destroy" Hollywood with this mindset. Copolla and Roger Corman disrupted the movie industry but they did not "destroy" Hollywood.
You won't destroy Hollywood by creating a few new studios. But you might change it. That's really what people want to achieve.
Anyway, you've named some of the best high-budget movies over the last 10 years. They don't release an Avatar every month.
And then you have to convince millions of moviegoers NOT to watch high budget competition such as Dark Knight Rising, Transformers, Twilight, Spiderman, etc.
Then you need to have something Millions of people want to watch this is the hard part :)
And then you'll kill Hollywood.
Small studios don't need as high a return.
This is in many ways a Clayton Christensen (The Innovators Dilemma) opportunity.
Producing high quality movies as ultimately a question of people and skills. There are plenty of both that can't get work anywhere else.
I don't understand why I would have to convince people to not watch those movies? They are still being sold today and people are still watching non-hollywood movies.
If it becomes impossible to be profitable with big productions then hollywood will kill itself soon enough.
In total, producing our studio's first 75 films would cost $5 million dollars LESS than the total production cost of just one of this weekend's wide release films (in this case, Haywire, made for $23 million). Go see Haywire, and think to yourself about a) whether that movie really needed to cost what it did (bear in mind that the majority of its costs were sunk into the logistics of shooting abroad in multiple Euro locations and filling out its secondary cast with A-list talent; were the locations and secondary cast essential?) and b) whether or not you might have been more interested in the film had it been produced w/o studio constraints (meaning more nudity and explicit violence; a "hard R" or NC-17 as opposed to the film's "soft R" rating).
As I mention below, there's examples of companies that crank out product quickly and very cheaply (UFO, Asylum, etc), but they really don't care much about quality.
But set up something like this with some people who could aim high on low budgets, and with say 5 million bucks over 2 years turn out 100 films. None of them would be blockbusters, but some of them would find substantial audiences.
Self-distribute online, set low per-film purchase prices, and maybe some sort of subscription for the true fans. Work hard to get the breakout films to wider distribution. You would break even in time, even if only 1 in 10 films were hits.
Experiment. A/B test. Set a culture of innovation. Invent processes, gear, whatever was needed to produce the films faster and cheaper. Be the lab.
You could actually hire pretty pro crew for below the line work since you'd be spreading the cost of any individual over say 20 films a year.
You'd lose above the line people along the way. The super talented would get picked up for more money elsewhere. That would be factored in, though, you'd just bring in new people. And the films that brought the people that left their fame would just be worth more then.
There's nothing I'd rather do more than exactly this, personally. It'd be fun and full of great challenges and rewards.
http://gizmodo.com/5876427/hulus-new-original-series-have-so...
http://www.cinemablend.com/television/Eli-Roth-Producing-Hor...
You also mention how looking at data is impossible for artistic endeavors like film making, then turn around and talk about mining data from your releases. I actually tend to think your original comment, that you can't mine data, is accurate. Any model to kill Hollywood is going to have to deal with the fact that some films will go viral (what the Internet calls a blockbuster) and others will tank.
Every indie studio has a worldwide distribution mechanism. It's the web. Stream to laptops, Roku boxes, apple tv, Google tv boxee tv etc. build audience on there and if you're popular you can get into traditional distribution channels.
Imagine a film-making business with the same allure for arts graduates that Google etc have for comp sci graduates. Like you say, being payed $30K+ straight out of film school is quite attractive, especially if it's at a place famed not for the politics and ladder climbing of Hollywood, but for creativity and freedom. A place where you get to try out new things and be bold with your art. Maybe even have a 10% project...
Your proposed ideas are, in fact, almost exactly what I had in mind with my original post (though my arbitrarily chosen $10M example may seem contradictory). I'd like to discuss further.
If you're saying that there's no market for compelling stories efficiently told, then we better batten down the hatches. I'm pretty sure Revelations lists that as one of the six signs of the Apocalypse.
Assuming that really is the best model for the future, how do you prevent the new Hollywood from turning into the old Hollywood again?
Interesting. I greatly enjoy tacky high school / college movies (think American Pie, Superbad, Fired up!, that kinda thing), and I would love if there were a LOT more of those on the market. I can't imagine that they are very expensive to make either.
EDIT: My big thing is that a kickstarter like project wouldn't be geared around in-house talent. That's what made Roger Corman (and the golden age studios he modeled himself around) special. All the talent was under one roof.
Hollywood has backed itself into a corner using the exact same methodology that you outline in your new studio: both assume that films are widgets, and great ones can be reliably produced with high frequency if the secret formula is discovered. No such formula exists. Every film is a one off, and many of the biggest hits were perceived as certain flops before their release (Star Wars), just as many sure things have tanked (Cowboys & Aliens).
As I've said before, the solution isn't to become more cautious, but more bold. You studio should be based around locating new, young talent (writers, directors, actors and producers), giving them steady work in exchange for reasonable salaries (kids right out of film school are thrilled w/ $30K a year) and creating an environment where said talent can work on a high volume of projects over a short time period with limited commercial risk. No one should ever feel that failure on any particular project will result in a ruined career - the omnipresence of that fear is what has given rise to timid film-making in the mainstream. Projects should be shot in under two weeks, and should have budgets ranging from $10 - 100K. You should be designing your studio to accommodate modest returns, while accounting for inevitable flops. Never presume you know what will sell, and you might make it.
Film-making isn't a business. Film-making is an art. The best art is achieved via iteration: practice, release, refine, practice, release, refine. Build a studio designed to lose money for two years. In the first year, plan to attract at least 50 young directors, 100 young actors, and 100 young writers. There's no shortage of talent in LA (300 hungry young artists step off the bus in LA every day) but sifting the wheat from the chaff will be exhausting. Do the work, it will be worth it. Build a production schedule geared around low budget genre films, produced in 12 days and costing an average of $35,000 a piece. Ideally you'd be releasing 50 - 75 films a year. Over the first two years of your studio's existence, you'll have released 100 - 150 films. With each film, you'll be able to try new and different release and marketing strategies. You'll be able to gather detailed audience feedback on each film, and at the end of that two years, with a mountain of data behind you, you'll start to have a very strong idea of what sells and what doesn't. What kinds of films your audience is interested in, what kinds of actors, plots and situations they enjoy, and how you can produce films with those elements in the cheapest, quickest way possible. In the third year of your studio's existence, you might start to break even. In the fourth year, every major studio will be begging to work with the radical young talent that your studio has done such an amazing job at cultivating.
In other words: Step One, collect underpants.