Revision Guide: Institutions and Audiences

AS Media Studies

Areas for focus:

Candidates should be prepared to understand and discuss the processes of production, distribution, marketing

and exchange as they relate to contemporary media institutions, as well as the nature of audience consumption

and the relationships between audiences and institutions. In addition, candidates should be familiar with:

the issues raised by media ownership in contemporary media practice;

(The importance/influence of the ‘big six’: Disney, Paramount, Warner, Universal, Columbia and 20th C.Fox.)

the importance of cross media convergence and synergy in production, distribution and marketing;

(Internet, newspapers, radio, television, billboard posters, Social Media (Facebook/Twitter) etc.)

the technologies that have been introduced in recent years at the levels of production, distribution, marketing

and exchange;

(Such things as Netflix, Love Film, 3D, home cinema, Digital camera/projector.)

the significance of proliferation in hardware and content for institutions and audiences;

(e.g. 3D, Digital Camera/projector, home cinema, Smart TVs, Laptops, Tablets , the effect of Piracy etc .)

the importance of technological convergence for institutions and audiences;

(Internet, Netflix, Love Film, home cinema, Smart TVs, Laptops, Tablets etc. , Social Media like Facebook and

Twitter.)

the issues raised in the targeting of national and local audiences (specifically, British) by international or global

institutions;

(How are we targeted? How much choice do we have?)

the ways in which the candidates’ own experiences of media consumption illustrate wider patterns and trends of

audience behaviour. (Where, When and How do you watch films? What do you watch? How typical are you?

Piracy?)

The Examination

To be successful in the exam you must be able to confi dently discuss any of the seven key areas.

You must make clear references to real examples of fi lms, directors, studios , production companies, distributors and

exhibitors.

You will be expected to show a good overall knowledge of the Film Industry.

The first three things you will need to know about are:

Production

Distribution

Exhibition

Production

The issues raised by media ownership in contemporary media practice.

The importance of cross media convergence and synergy in production.

The technologies that have been introduced in recent years at the levels of production.

The significance of proliferation in hardware and content for institutions and audiences.

The importance of technological convergence for institutions and audiences.

Production refers to the making of the fi lm:

Finding the idea

Writing the script

Pitching i t to a s tudio

Setting a budget

Casting s tars and employing a crew

Fi lming

Editing

Investors:

For a fi lm to go into production i t needs investors to provide the

necessary funding.

Box office is success is never certain and so investors try to reduce

the ri sk of losing their money by becoming involved in important

decis ions

Key questions that they wi l l ask are:

Is the film’s storyline similar to other films that have made

money recently?

Does it offer easy selling points?

Are there obvious marketing spin offs to give added publicity?

Is the star popular?

Had the director had previous successes?

Here’s the path a fi lm usual ly takes to get to your loca l theatre:

Someone has an i dea for a fi lm.

They create an outline and use it to promote interest in the idea.

A studio or independent investor decides to purchase rights to

the fi lm.

People are brought together to make the fi lm (screenwriter,

producer, di rector, cast, crew).

The fi l m is completed and sent to the s tudio.

The s tudio makes a l i cens ing agreement with a dis tribution

company.

If the fi lm has been filmed in celluloid, the distribution company

determines how many copies (prints) of the fi lm to make.

The dis tribution company shows the fi lm (screening) to

prospective buyers representing the cinemas.

The buyers negotiate with the dis tribution company on which

fi lms they wish to lease and the terms of the lease agreement.

The Fi lm Distributors are responsible for marketing and publ ici ty.

The better the publicity the more people see the fi lm and the

more money that i s made.

The prints / digital downloads are sent to the cinemas a few days

before the opening day.

The cinema shows the fi lm for a speci fied number of weeks

(engagement).

You buy a ticket and watch the movie.

At the end of the engagement, the theatre sends the print back to

the dis tribution company and makes payment on the lease

agreement.

Production – Risks:

If the answer to any of these questions is no then changes will be made

to the “package” (the details of the film) to make sure all the answers

are yes! Otherwise the investors wi l l take their money elsewhere.

The Big Studios

In recent years the big studios – Sony, Paramount, 20th Century Fox,

Warner Brothers and Disney have dramatical ly cut the number of

fi lms they make (up to 50% less ).

At the same time they are increas ing budgets to the $150-$200

mi l l ion range.

On the release of each film they wi ll spend at least $100 mi l l ion to

promote a blockbuster around the world.

Only ha lf of box-office goes to the Fi lm Studios (rest to cinema

owners ).

Therefore a total budget of $250 mi llion has to have a box office

above $500 mi l l ion to make a profi t.

In 2013 there are a large number of blockbusters (19) which i s far

more than ever before.

In the past a maximum of nine blockbusters have done wel l in any

one year.

Why make Blockbusters? Because it still makes financia l sense for

the Fi lm Studios .

The top ten most success ful fi lms are blockbuste rs .

“Man of Steel” cost $225 mi llion. First two weeks box office = $400

mil l ion.

“Fast and Furious” cost $160 mi l l ion. Box office =$666 mi l l ion.

Hopeful signs:

The big studios have made up for the dramatic loss in revenue

from DVD sales (used to be hal f their profi ts ) by boosting box

office outs ide America .

In the past international box office sales were 50%. Now i t i s 70%

(2013).

Blockbuster Strategy:

So sure are film studios of their Blockbuster policy that

they are mapping release schedules for five years ahead.

Robert Downey Jr has just signed to make two more

“Avengers” films with Disney (release May 2015).

Sony/Columbia has announced i t will release “Spider

Man” fi lms may ‘14, June ‘16 and May ‘18.

The Risks of Blockbuster!

Steven Spielberg sa id in July 2013:

“There is going to be an implos ion where three or four

mega-budgeted fi lms are going to go crashing to the

ground.”

The effects of blockbuster failure:

George Lucas (creator of “Star Wars”) says :

“It’s a mess. It’s total chaos. In future there will be fewer

but bigger cinemas and a revolution in pricing. Tickets

may cost $50 -$100.

Going to the cinema will become an event / experience.

The fi lm will be secondary.

Steven Soderbergh has announced he will make no more

fi lms for the big screen. He is ti red of the studios’

blockbuster s trategy and the fact audiences lap it up.

The problems with film production:

Paul Webster (Producer of “Atonement” and “Anna Karenina”) says :

“It i s as hard as it has ever been to get serious s tuff of the ground. This i s

mainly because films have become events and turned into a spectacle. Big

blockbusters are like s tadium bands playing big arenas . If you are trying to

do interesting things you a re forced to ever smal ler venues .”

He believes television is where the most interesting s tuff i s being made. He

ci tes “Homeland”, “The Wire” and “Broadchurch” to back up his view.

Mike Figgis (Director) has been Oscar-nominated and his fi lms include:

“Stormy Mondays”, “Internal Affa i rs” and “Leaving Las Vegas”.

He is annoyed that the British Film Industry i s ‘defeatis t’ in atti tude and

outdated in s tructure.

He cla ims i t does not help young Bri ti sh fi lm makers . He says :

“Fi lm-makers cannot flourish and grow unless you give them room to do

so.”

“Creativi ty cannot exis t in a system of committees”

Figgis believes we are now producing unoriginal films. The fi lms made are

ei ther depressing working class council estate films or his torica l costume

dramas.

Figgis fears :

Without a big s tar name i t i s imposs ible to get finance.

The Bri tish film industry wi l l not ful ly embrace the digi ta l revolution –

particularly with regard to dis tribution.

Our brightest and best fi lm makers are forced to go to America .

International markets - China

China and other developing countries provide an ever increasing proportion

of fi lm revenues – International markets = 70% of cinema box office.

Fi lm Production Companies are increasing aware that they need to produce

fi lms that wi l l appeal to market.

For 80 years Grauman’s Chinese Theatre on Hollywood Boulevard has been

one of America ’s greatest touris t attractions .

The biggest movie stars put their hand and footprints into wet cement.

It i s symbolic that a Chinese television manufacturer has bought the rights

$5mi l l ion.

The Chinese are investing far more in American Cinema.

September ‘12 the Dal ian Wanda Group bought ACM Enterta inment –

America ’s second largest cinema chain for $2.6 mi l l ion.

In 2012 China overtook Japan to become biggest movie market after

America .

In 2012 box-office revenues shot up by 36% to $2.7 mi l l ion.

2000 cinema screens bui l t Jan-March ‘12 a lone.

By 2020 China wi l l be biggest fi lm market in world.

Fi lm Producers are trying to satis fy Chinese consumers and paci fy their

government which regulates the number of foreign films released (currently

34).

American film producers release substantia l ly di fferent vers ions of their

fi lms in China.

American film Producers are changing the content and tone of the fi lms

they produce.

For Producers it i s the non-American (especia l ly Chinese) teenager who

counts now.

Chinese Market – Task:

Different scenes and characters are added in especially for the Chinese market.

Research some examples (e.g. Iron Man 3). Some films plots have even been re-

worked to avoid upsetting Chinese investors and audiences!

Low-budget films:

Katherine Butler is the Head of Film 4’s Low Budget Feature

Department since 2009.

Film 4’s Low Budget Department has turned out award winning

titles including “Tyrannosaur”, “Dreams of a Life”, “Kill List” “The

Deep Blue Sea” and “Berberian Sound Studio”.

“The Guardian” said, “These films stand for a bold new wave of

British film making: cinematically confident, generically ‘tricksy’,

compelled by disturbing, ambivalent subject matter.”

Butler said, “In 2009 I saw several micro-budget films that were

already pushing boundaries with strong directorial voices. Every

year since then two or three really strong, self financed pieces

come through because technology is enabling that to happen.”

Katherine Butler maintains, “The job for places like Film 4 and

the BFI is to nurture people coming through this route (micro-

budget films) and to help enable film makers who have already

found their voice to continue to work with the most freedom in

an industry that is a business as well as a place of artistic

endeavour.”

“What counts as a low-budget for Film 4 – less than £2million –

can still mark a massive increase for a previously self-financed

film maker, without introducing the kind of pressure that tends

to stifle experimentation.”

Katherine Butler says, “Low-budget is a very risk friendly

environment. It is an engine room for innovation. We want to

work with directors again and again. Providing a home for new

directors is very exciting.”

She maintains, “There are always films like “Tyrannosaur” and

“Kill List” which don’t do the highest box office but are so

acclaimed they become stepping stones for their directors and

have a long life.”

Finally, she says: “It is the up and coming directors who get me

excited. These film makers are so confident in the way they take

genre on, whether it’s comedy, thriller, horror or documentary.

They are pushing at boundaries, evolving recognisable forms of

cinema into something their own...”

Distribution and Marketing

The importance of cross-media convergence and synergy in distribution and marketing. The issues raised by media ownership in media practice.

The technologies that have been introduced in recent years at the levels of distribution and marketing. The issues raised in the targeting of national and local audiences (specifically, British) by international or

global institutions.

Standard Release:

Fi lms are released in “release win dows". This keeps di fferent instances of a movie from competing with each other.

In the s tandard release, a fi lm is fi rs t released in the cinema (theatrica l window),

After approximately 16 and a ha l f weeks , i t i s released to DVD (video window).

After an additional number of months i t i s released to Pay TV and On Demand services .

Simultaneous release:

A s imultaneous release takes place when a film is made available on many media (cinema, DVD, internet) at the same time or wi th very l i ttle

di fference in timing.

What are the pros and cons of a simultaneous release?

Consumers have more choice

Producers only need one marketing campaign

Stra ight-to-video release:

A stra ight to video (DVD/BluRay) release occurs when a movie is released on home video formats without being released in cinemas fi rs t.

STV releases used to be seen as a s ign of poor qual i ty

Have become a more profi table option in recent years . Especia l ly for independent moviemakers and companies .

Research Task

Find out a l l you can about the fi rs t ever “Tesco Fi lms” release.

Makers of smal ler-budget movies are a lso putting to the test new release s trategies .

Fi lms are premiered on VOD (Video On Demand – Pay Per View) systems and received a l imited theatrica l release one month later.

Some major studios have considered making movies ava i lable to VOD services shortly after their theatrica l release for a premium price.

Find out a l l you can about fi lms that have been released in this way.

Shrinking the theatrical window:

Origina l ly a s ix months duration

Today been reduced to l i ttle more than four months .

Movie s tudios have reportedly been pushing to shrink the

duration of the theatrical window.

Cinema owners have fought fiercely against this.

Why do you think studios are in favour but cinema chains are

against shrinking the theatrical window?

Distribution:

In s tarting to plan a marketing campaign, the film distributor has to decide

how i t wi l l present a fi lm to a potentia l audience.

They need to decide what sets this film apart from all the other films that are

released – they look for a fi lm’s ‘unique selling point’ (USP).

If, for example, the distributor is handling an adventure film, they wi l l need

to look for aspects of the fi lm which set i t as ide from the other action

adventure fi lms .

After this they wi ll look at such things as who stars in the film, are there new

and spectacular specia l effects in the fi lm and who is the director?

Taking all of these into consideration, the distributor will then decide which

elements to s tress in the marketing campaign (posters, trailers, etc.) i .e. how

to pos i tion the fi lm in the market place.

From the information you are given could you say what you think i s the USP

of three new fi lms of your choice?

Go on imdb and find a print of hand out that goes with those with three films.

Distribution - Marketing

Marketing i s one of the most important aspects of a fi lm’s distribution and there are many different ways to market a film.

List of the different the ways you can market a film.

Posters Trailers

Online and mobile content Special Screenings/Premieres

Interviews/ articles Merchandising Festivals/ Awards

Distribution – Marketing Task:

www.launchingfi lms .com/releaseschedule

Choose a film that has either been released this week or i s just about to be

released.

Create a PowerPoint presentation that covers as much about the marketing

s trategy for that fi lm as poss ible

Make a note of whether your chosen fi lm is Bri ti sh or America

Record the name of the dis tribution company

Movie marketing is also known as movie advertising and movie

promotion.

Distribution is concerned with ’getting the fi lm out there’.

Publ icity and Marketing are key features of the dis tribution

process .

Every major Hollywood s tudio and movie distribution company

has an internal department devoted to promotion.

The promotions department is responsible for des igning and

implementing an effective, cohes ive advertis ing campaign

across severa l di fferent media platforms. These include:

theatrical movie tra ilers, newspapers, magazines , televis ion,

radio, the Internet and bi l lboards .

Different Strategies - the issues raised in the targeting of national

and local audiences (specifically, British) by international or global

institutions.

Every movie i s di fferent.

The promotions department must figure out what type of

campaign will be the most effective at reaching the target

audience.

This requires researching the tastes and media -consuming

trends of the target audience.

Based on this research, the movie marketers decide how much

of their budget to spend on each di fferent media outlet.

The theatrical tra iler i s often the fi rs t chance to promote a

movie to i ts target audience.

Starting up to a year before the release of a major s tudio

movie, distributors run movie tra i lers that are meticulous ly

edited and audience -tested.

The idea i s to give moviegoers a taste of the lau ghs , specia l

effects and plot twists of the s tudio's upcoming releases, while

leaving them wanting more.

It's an art form that's usual ly handled by specia l tra i ler

production houses

Cross-media convergence - the importance of cross media convergence

and synergy in production, distribution and marketing.

Publ icists handle all interview requests for the s tars of the fi lm – form

newspapers , magazines , TV Ta lk Shows etc.

To protect the cl ient from any surprises , publ icis ts wi l l ask the

journalist exactly what the s tory i s about and what questions s/he

plans to as k.

In some cases, the publicist will ask to be present at the interview to

make sure that the cl ient doesn't comment on sensitive i ssues or make

remarks that could look bad in the papers .

As the release date of the film draws closer, movie marketers try to get

early favourable press coverage in newspapers , magazines and on

enterta inment TV shows.

The main movie publici ty tactic i s something ca l led a press junket.

At a press junket, journalists, entertainment reporters and movie critics

are flown out to a special location for a day or weekend of interviews

with the s tars and creators of the fi lm. The actors , di rectors and

screenwriters sit in separate rooms and the reporters are brought in

one by one to ask their questions .

Press junkets are highly controlled environments where interviews are

often attended by a publicist, who make sure interviews never veer

from pos i tive topics .

If you've ever seen a TV interview with an actor s i tting in front of a

poster of their movie, that's from a press junket.

More than ever, publicists network with online bloggers and read and

respond to comments on popular socia l networks .

In addition to a standard press tour, they might arrange for a l ive,

onl ine Q&A session with a popular fansite or interviews with podcasts .

About the same time that the first trailers hi t the theatres , the Fi lm

Studio wi l l unvei l an officia l Web s i te for the fi lm.

Typica l movie Web s ites allow visitors to: view multiple versions of the

tra i ler, watch behind-the-scenes interviews and mini-documentaries ,

read plot synopses , download cel l -phone ringtones and desktop

wal lpaper, play games, chat in forums and even pre-order tickets . The

official movie Web site i s only the beginning of a much larger Internet

marketing ca mpaign.

Look up the webs i te for “Iron Man 3” and 4.

Weeks before the film opens nationwide, the promotions department

s tarts an a l l -out publicity blitz.

The idea is to bombard the public with so many images and promos for

the fi lm that i t becomes a "can't miss" event.

Fi lm marketers will plaster the s ides of buses with huge ads , place

bi l lboards all around the ci ty, run tons of teaser tra i lers on TV, place

ful l-page ads in major newspapers and magazines , and the movie's

s tars wi l l show up on a l l of the major ta lk shows.

The Internet i s proving to be a prime spot for publ ici ty bl i tzes .

Promoters can place interactive ads on the Web s ites most trafficked

by their target audience.

They can a lso release behind-the-scenes clips, bloopers and other viral

videos on video-sharing s i tes l ike YouTube.

Or they can release different media clips and let the fans create their

own tra i lers .

Another popular strategy is to use highly vis ible product tie -ins and

corporate partnerships .

In the weeks leading up to the release of "How the Grinch Stole

Chris tmas," images of the green Grinch appeared on packages of

Oreos , boxes of Froot Loops and cans of Spri te.

Even the United States Postal Service got into the act, s tamping letters

with specia l "Happy Who-l idays!" messages .

For marketing children's movies, the Holy Grail for publicists is getting

promotional gi fts in McDonald's Happy Meals .

Big Brand Marketing - the issues raised by media ownership in

contemporary media practice.

Brand and film partnership marketing seems more integrated

than ever before.

In many cases, brands are taking on the personalities of the

movies, actually enacting the ethos of the films in their

marketing and product experiences.

At the same time, brands are being woven into scripts as vi tal

characters of their own

Read the articles in the revision pack for more information!

Publicity Stunts

One final movie marketing s trategy i s the publicity stunt, an

orchestrated media event where someone does something

incredibly s illy, dangerous or spectacular to draw further

attention to the opening of the film.

An example is when the promoters of "The Simpsons Movie"

transformed dozens of nationwide 7-Eleven convenience

s tores into replicas of Springfield's own Kwik-E Mart.

Activity:

Spend some time looking onl ine for other famous examples of

publicity s tunts – pay close attention to the type of publ ici ty they

attracted (pos i tive/negative, loca l/global )

Exhibition

The technologies that have been introduced in recent years at the levels of exchange; The significance of proliferation in hardware and content for institutions and audiences; The importance of technological convergence for institutions and audiences; The issues raised in the targeting of national and local audiences (specifically, British) by international or global

institutions; The ways in which the candidates’ own experiences of media consumption illustrate wider patterns and trends of

audience behaviour.

The Film Value Chain

Of the “Fi lm Value Chain” where do you think that fi lms

make the most money? Why do you think this i s?

Cinema: the first and the best way!

There are severa l di fferent types cinema:

Multiplex

Imax

Art-house

Cinema Chains :

Odeon

VUE

Everyman

Curzon

Empire

Cineworld

Activity:

How does the range of “cinematic experiences” offered

vary between the Odeon/VUE and Curzon/Everyman

chains?

Do a l l cinemas within the same chain show the same films?

If not why not?

Do you think all these cinema chains attract the same type

of audience? Why?

Exhibition

When we refer to “film exhibi tion” we are ta lking about how the pubic

actual ly watches the fi lm.

The cinema release of a film marks the fina l s tage of one part of a fi lm’s

journey from idea to audience. It a lso marks the beginning of a new journey

from cinema to smal l screen.

After i ts cinema release the film will then be available on pay TV, free to a i r

TV, as wel l as televis ion.

Each of these “exhibitions” of the film offers the poss ibi l i ty of generating

profi ts for both the fi lm’s dis tributor and producers .

Exhibition Activity

Make a list of the pros and cons of each for of exhibition (watching a film) –

try to decide which way is the best.

The options are: cinema, television (VOD), DVD, Online – ei ther through a

PC/laptop or mobile phone.

Changes in exhibition

Box office gross – UK (2012-2013)

Visit VXF’s ‘A Level Media Studies’ blog for extra articles

and information to help you revise for the exam:

http://vxfmediastudies.blogspot.co.uk

Areas of examination

It is important for you understand the specific areas of ‘Institutions and Audiences’ that the exam board might target. They

may ask a general question about production, distribution or exhibition, but they may be looking for something more specific,

such as the impact of digital media technology on the film industry.

Here are some of the past exam questions for the Section B: Industries and Audiences section of you exam:

Discuss the ways in which media products are produced and distributed to audiences, within a media area which you have studie d. (Jan 2009) How important i s technological convergence for institutions and audiences within a media area you have s tudied? (Jun 2009)

“Media production is dominated by global institutions, which sell their products and services to national audiences.” To what extent do you

agree with this s tatement? (Jan 2010)

What s ignificance does the continuing development of digital media technology have for media institutions and audiences? (Jun 2010) Discuss the issues ra ised by media ownership in the production and exchange of media texts in your chosen media area. (Jan 2011) “Successful media products depend as much upon marketing and distribution to a specific audience as they do upon good production

practices.” To what extent would you agree with this s tatement, within the media area you have s tudied? (Jun 2011)

To what extent does digital distribution affect the marketing and consumption of media products in the media area you have studied? (Jan

2012) “Cross -media convergence and synergy are vi tal processes in the successful marketing of media products to audiences.” To what extent do you

agree with this s tatement in relation to your chosen media area? (Jun 2012) What impact does media ownership have upon the range of products available to audiences in the media area you have studied? ( Jan 2013)

Sample Question

Discuss the issues raised by an institution’s need to target specific audiences

within a media industry which you have studied. (50 marks)

Discuss two case studies – 1 Hollywood Block Buster, 1 Independent film

Cover the following areas:

Production practices that allow texts to be constructed for specific

audiences.

Distribution and marketing strategies to raise audience awareness of

specific products.

The use of new technology to facilitate more accurate targeting of

specific audiences

Audience strategies in facilitating or challenging institutional practices.

What kind of challenges do independent films present in terms of

marketing?

Difficult to market film

Hard to reach audience

Low budget – can’t afford large advertising campaign (posters, TV

slots etc)

Effective Marketing Strategies for low-budget films:

• Different marketing for UK and USA

• Conventional website

• Innovative website – e.g. interactive online games

• Appeals to hard to reach audience

• Use of iPads

• Make use of publicity from film festivals

• Effective audience interaction – enables audience to personally

relate to the themes of the film

Blockbuster marketing:

Advertising, competitions, trailers, special screenings/premiers,

merchandising, awards, interviews/articles, online content, social

media reach.

Other areas:

How important is technological convergence?

What is technological convergence?

For the purposes of this essay I am defining technological convergence as..

Discuss the impact of technological convergence on the way independent

films were publicised and distributed, e.g. Dreams of a Life

Discuss the impact of technological convergence on blockbusters such as

The Hunger Games and Iron Man 3

Discuss the ways media products are produced and distributed within an area

you have studied.

Production:

What problems/advantages do small independent film makers have

getting films made? Be specific – WARP (use examples).

What advantages do the ‘big six’ major studios have?

What effect does the power of the ‘big six’ have?

Marketing:

What marketing strategies did small independent films use to attract

attention and publicise their films with a limited budget? NB: Cross Media

Convergence.

In contrast, what marketing strategies did blockbusters use with their

much larger budget?

Exhibition:

What strategies do the film makers/Distributors use to get the films to

you?

How exactly can you watch the films?

Cinema? Mainstream or Independent? Curzon on Demand? DVD? Sky?

Smart TV? Netflix?

The Film Industry Today

Is the Hollywood blockbuster model broken?

It may have lacked a generation-defining event movie l ike 1977's

Star Wars , or even a technologica l ground breaker l ike 2009's

Avatar, but 2013 was s till the year of the Hollywood blockbuster.

This year, 26 fi lms costing more than $100m (£61m) each were

released by the major Hollywood studios - more than ever before.

They are l ikely to have raked in tens of bi l l ions of dol lars in

worldwide box office revenues as a result - close to the record

$35bn (£21.5bn) del ivered in 2012.

Some of the films did badly. The Lone Ranger, s tarring Johnny

Depp, barely made back the $250m i t cost to make. But the hi ts

outweighed the flops : Iron Man 3 took $1.2bn in box office

receipts around the world, topping the charts and making i t the

fi fth highest-gross ing fi lm of a l l time.

But despite the runaway successes , there are concerns within

Tinseltown that blockbuster budgets are getting dangerously high.

Bankrupted

"There's eventually going to be an implosion, or a big meltdown," said

Hollywood elder statesman Steven Spielberg in a speech earlier this

year. "Three or four or maybe even a half dozen mega -budget movies

are going to go crashing into the ground, a nd that's going to change

the paradigm."

It has happened before. In 1980, Heaven's Gate effectively

bankrupted United Artists. The budget for the sprawling Western got

out of control, the film bombed, and the studio was forced into a

takeover by MGM.

Hollywood watchers say it's a statistical certainty that another bomb

to rival Heaven's Gate, or even 1995's Waterworld, is around the

corner. But the difference, they say, is that modern Hollywood studios

are equipped to cope.

After a wave of acquisitions in the 80s and 90s, the six "majors" that

dominate global box office are now parts of massive media

conglomerates. They have found ways to both boost profitability of

their films and mitigate the risks associated with making such huge

investments.

The first thing the studios have done is spread the risk by getting

dozens of smaller production companies to invest alongside them,

reducing their exposure to a potential flop.

Revenue streams:

The second thing is that they have made the success of their films

almost a sure thing.

Recent research by British film academics John Sedgwick and Mike

Pokorny has found that not only have blockbuster films become more

profitable over the past 20 years, they have become more reliably

profitable: in the late 80s just 50% of major studio films turned a

profit. In 2009 it was 90%. Flops have become rare.

"[Studios] are ruthlessly good at getting returns from their

investments," Prof Sedgwick says. "Hollywood has got better and

better at it. The more you spend, the more you get back. It seems to

me to be an extraordinarily successful model."

How have the studios achieved this?

The first step has been to generate new revenue streams. In the early

days of Hollywood, 100% of revenues came from ticket sales. Now it's

just 20%. The rest of the money comes from television licensing, DVD

sales, merchandising and other commercial deals.

"Blockbuster films are not really films," says Charles Acland, a

professor of communication studies at Concordia University in

Montreal, and author of the book Screen Traffic. "They are in fact very

elaborate 'tent-pole' business models that connect all sorts of

different commodities in all sorts of different industries."

The second step has been to look beyond the domestic US market,

where cinema audiences aren't really growing, and look overseas to

developing markets such as China .

The history of the blockbuster

The i rony i s that Spielberg almost s inglehandedly invented the

blockbuster genre.

When his film Jaws was released in 1975, Hollywood realised that

making a few big-budget films a year that appealed to the masses

was more lucrative than making dozens of smal ler ones , and a

bus iness model was born. Since then budgets have soared and

artis tic meri t has taken a back seat.

HIGHEST-GROSSING FILMS OF 2013 WORLDWIDE

Iron Man 3 (Walt Disney) - $1.2bn

Despicable Me 2 (Universa l ) - $919m

Fast & Furious 6 (Universa l ) - $789m

Monsters Univers i ty (Walt Disney) - $744m

The Hunger Games: Catching Fi re (Lionsgate) - $730m

Man of Steel (Warner Brothers ) - $663m

Gravity (Warner Brothers ) - $642m

Thor: The Dark World (Walt Disney) - $620m

The Croods (20th Century Fox) - $587m

World War Z (Paramount) - $540m

Source: Box Office Mojo

Communal experience

A look at this year's top 10 highest-grossing films reveals just two

original screenplays - animation The Croods and 3D epic Gravity. In

both 2012 and 2011 there were none in the top 10.

As a mark of the power of the franchise, The Amazing Spider-Man

was released last year, and Sony has already pencilled in dates for

The Amazing Spider-Man 2, 3 and 4 s tretching unti l May 2018.

That's on top of Spider-Man 1, 2 and 3 released between 2002 and

2007.

"If you want a shared communal experience of the fi lm that

everybody's talking about right now, then you go to the movie

theatre," Prof Acland says . "The blockbuster i s very s table in

Hol lywood. It's not going to go away any time soon."

The Future

Hollywood faces challenges. Executives are sweating over a virtual

collapse in DVD sales in recent years amid the growth of online

streaming services such as Netflix. The major conglomerates that

control the studios are seeing profits faster at their television arms

than in the film industry, and are cutting costs.

But perhaps the more worrying long-term problem is what Charles

Acland calls "aesthetic bankruptcy". The blockbuster business model

necessarily leads to making bad movies.

The perception that Hollywood peddles lowest common denominator

crowd-pleasers at the expense of "serious" cinema means

screenwriting talent is increasingly moving over to television. This

year director Steven Soderbergh threatened to quit altogether.

But while blockbuster franchises continue to bring in billions

worldwide, there is little s ign that Hollywood will change its ways.