Now, I'm going to attempt to show how a certain kind of rodent might be smarter than a studio when it comes to picking projects. If you give a certain kind of rodent the option of hitting two buttons, and one of the buttons, when you touch it, dispenses food 40% of the time, and one of the buttons when you touch it dispenses food 60% percent of the time, this certain kind of rodent very quickly figures out never to touch the 40% button ever again. So when a studio is attempting to determine on a project-by-project basis what will work, instead of backing a talented filmmaker over the long haul, they're actually increasing their chances of choosing wrong. Because in my view, in this business which is totally talent-driven, it's about horses, not races. I think if I were going to run a studio I'd just be gathering the best filmmakers I could find and sort of let them do their thing within certain economic parameters. So I would call Shane Carruth, or Barry Jenkins or Amy Seimetz and I'd bring them in and go, ok, what do you want to do? What are the things you're interested in doing? What do we have here that you might be interested in doing? If there was some sort of point of intersection I'd go: Ok, look, I'm going to let you make three movies over five years, I'm going to give you this much money in production costs, I'm going to dedicate this much money on marketing. You can sort of proportion it how you want, you can spend it all on one and none on the other two, but go make something.
Now, that only works if you are very, very good at identifying talent. Real talent, the kind of talent that sustains. And you can't be judging strictly on commercial performance, or hype, or hipness, but I don't think it's unreasonable to expect someone running a multi-billion dollar business to be able to identify talent. I get it, it's the studio, you need all kinds of movies. You need comedies, you need horror films, you need action films, you need animated films, I get it. But the point is, can't some of these be cinema also? This is kind of what we tried to do with Section 8 is we tried to bring interesting filmmakers into the studio system and protect them. But unfortunately the only way a studio is going to allow that kind of freedom to a young filmmaker is if the budgets are low. And unfortunately the most profitable movies for the studios are going to be the big movies, the home runs. They don't look at the singles or the doubles as being worth the money or the man hours. Psychologically, it's more comforting to spend $60 million promoting a movie that costs 100, than it does to spend $60 million for a movie that costs 10. I know what you're thinking: If it costs 10 you're going to be in profit sooner. Maybe not. Here's why: OK. $10 million movie, 60 million to promote it, that's 70, so you've got to gross 140 to get out. Now you've got $100 million movie, you're going spend 60 to promote it. You've got to get 320 to get out. How many $10 million movies make 140 million dollars? Not many. How many $100 million movies make 320? A pretty good number, and there's this sort of domino effect that happens too. Bigger home video sales, bigger TV sales, so you can see the forces that are sort of draining in one direction in the business. So, here's a thought… maybe nothing's wrong. Maybe I'm a clown. Maybe the audiences are happy, and the studio is happy, and look at this from Variety:
“Shrinking release slates that focus on tentpoles and the emergence of a new normal in the home vid market has allowed the largest media congloms to boost the financial performance of their movie divisions, according to Nomura Equity research analyst Michael Nathanson”.
So, according to Mr. Nathanson, the studios are successfully cutting costs, the decline in home videos have plateaued, and the international box office, which used to be 50% of revenue is now 70%. With one exception in that all the stock prices of all the companies that own these studios are up. It would appear that all these companies are flush. So maybe nothing's wrong, and I've got to tell you, this is the only arena in history in which trickle-down economics actually works, because when a studio is flush, they spend more money to make more money, because their stock price is all about market share. And you know, there's no other business that's this big, that's actually this financially transparent. You have a situation here in which there is an objective economic value given to an asset. It's not like that derivatives mortgage bullshit that just brought the world to its knees, you can't say a movie made more money than it actually made, and internally, you can't say that you didn't spend what you spent on it. It's contractual that you have to make these numbers available.
Now don't get me wrong, there is a lot of waste. I think there are too many layers of executives, I don't know why you should be having a lot of phone calls with people that can't actually make decisions. They'll violate their own rules on a whim, while they make you adhere to them. They get simple things wrong sometimes, like remakes. I mean, why are you always remaking the famous movies? Why aren't you looking back into your catalog and finding some sort of programmer that was made 50 years ago that has a really good idea in it, that if you put some fresh talent on it, it could be really great. Of course, in order to do that you need to have someone at the studio that actually knows those movies. Even if you don't have that person you could hire one. The sort of executive ecosystem is distorted, because executives don't get punished for making bombs the way that filmmakers do, and the result is there's no turnover of new ideas, there's no new ideas about how to approach the business or how to deal with talent or material. But, again, economically, it's a pretty straightforward business. Hell, it's the third-biggest export that we have. It's one of the few things that we do that the world actually likes.
I've stopped being embarrassed about being in the film business, I really have. I'm not spending my days trying to make a weapon that kills people more efficiently. It's an interesting business. But again, taking the 30,000 foot view, maybe nothing's wrong, and maybe my feeling that the studios are kind of like Detroit before the bailout is totally insupportable. I mean, I'm wrong a lot. I'm wrong so much, it doesn't even raise my blood pressure anymore. Maybe everything is just fine. But… Admissions, this is the number of bodies that go through the turnstile, ten years ago: 1.52 billion. Last year: 1.36 billion. That's a ten and a half percent drop. Why are admissions dropping? Nobody knows, not even Nate Silver. Probably a combination of things: Ticket prices, maybe, a lot of competition for eyeballs. There's a lot of good TV out there. Theft is a big problem. I know this is a really controversial subject, but for people who think everything on the internet should just be totally free all I can say is, good luck. When you try to have a life and raise a family living off something you create…
There's a great quote from Steve Jobs:
“From the earliest days of Apple I realized that we thrived when we created intellectual property. If people copied or stole our software we'd be out of business. If it weren't protected there'd be no incentive for us to make new software or product designs. If protection of intellectual property begins to disappear creative companies will disappear or never get started. But there's a simpler reason: It's wrong to steal. It hurts other people, and it hurts your own character”.
I agree with him. I think that what people go to the movies for has changed since 9/11. I still think the country is in some form of PTSD about that event, and that we haven't really healed in any sort of complete way, and that people are, as a result, looking more toward escapist entertainment. And look, I get it. There's a very good argument to be made that only somebody who has it really good would want to make a movie that makes you feel really bad. People are working longer hours for less money these days, and maybe when they get in a movie, they want a break. I get it.
But let's sex this up with some more numbers. In 2003, 455 films were released. 275 of those were independent, 180 were studio films. Last year 677 films were released. So you're not imagining things, there are a lot of movies that open every weekend. 549 of those were independent, 128 were studio films. So, a 100% increase in independent films, and a 28% drop in studio films, and yet, ten years ago: Studio market share 69%, last year 76%. You've got fewer studio movies now taking up a bigger piece of the pie and you've got twice as many independent films scrambling for a smaller piece of the pie. That's hard. That's really hard.
When I was coming up, making an independent film and trying to reach an audience I thought was like, trying to hit a thrown baseball. This is like trying to hit a thrown baseball – but with another thrown baseball. That's why I'm spending so much time talking to you about the business and the money, because this is the force that is pushing cinema out of mainstream movies. I've been in meetings where I can feel it slipping away, where I can feel that the ideas I'm tossing out, they're too scary or too weird, and I can feel the thing. I can tell: It's not going to happen, I'm not going to be able to convince them to do this the way I think it should be done. I want to jump up on the table and scream, “Do you know how lucky we are to be doing this? Do you understand that the only way to repay that karmic debt is to make something good, is to make something ambitious, something beautiful, something memorable?” But I didn't do that. I just sat there, and I smiled.
Maybe the ideas I had don't work, and the only way they'll find out is that someone's got to give me half a billion dollars, to see if it'll work. That seems like a lot of money, but actually in point of fact there are a couple movies coming down the pike that represent, in terms of their budgets and their marketing campaigns, individually, a half a billion dollars. Just one movie. Just give me one of these big movies. No? Kickstarter!
I don't want to bring this to a conclusion on a down note. A few years back, I got a call from an agent and he said, “Will you come see this film? It's a small, independent film a client made. It's been making the festival circuit and it's getting a really good response but no distributor will pick it up, and I really want you to take a look at it and tell me what you think.” The film was called Memento. So the lights come up and I think, It's over. It's over. Nobody will buy this film? This is just insane. The movie business is over. It was really upsetting. Well fortunately, the people who financed the movie loved the movie so much that they formed their own distribution company and put the movie out and made $25 million. So whenever I despair I think, OK, somebody out there somewhere, while we're sitting right here, somebody out there somewhere is making something cool that we're going to love, and that keeps me going. The other thing I tell young filmmakers is when you get going and you try to get money, when you're going into one of those rooms to try and convince somebody to make it, I don't care who you're pitching, I don't care what you're pitching – it can be about genocide, it can be about child killers, it can be about the worst kind of criminal injustice that you can imagine – but as you're sort of in the process of telling this story, stop yourself in the middle of a sentence and act like you're having an epiphany, and say: You know what, at the end of this day, this is a movie about hope.