Cinema Isn't Dying; The Business Is

“Ack! You can’t make movies out of statistics! That’s not art! AARRGGHHH!”

That’s my impression of a filmmaker or critic reading an article about Big Data, a currently buzzy, business-y tech term that every industry is currently figuring out what to do with, including Hollywood.

Now, I understand that most of the people who got into making movies or writing about them did so because they never wanted to have to learn about something like Big Data. But as a struggling movie blogger, I’ve had no such luck, and Big Data makes up a big chunk of the articles I’ve been reading for the past few months.

So it came as a shock to me to hear about this panel called “Big Data and the Movies” at the Tribeca Film Festival and see my worlds colliding. It happened to coincide with Netflix’s release of “House of Cards,” this New York Times article about a man using analytics to give notes on screenplays, and then of course two wonderfully insider and apocalyptic discussions about the state of cinema, one by A.O. Scott and David Denby at Tribeca, the other by allegedly retiring filmmaker Steven Soderbergh at the San Francisco International Film Festival.

With all those things together, I began to wonder: How does the movie industry innovate?

If you ask Denby, Scott or Soderbergh, they’ll say you need to make better movies. You need to put more film savvy people in the driver’s seat, you need to hand over the reigns to fresh young filmmakers and you need to throw out the clichés and the rulebook that tells you blockbusters and franchises are the only movies people care about.

This is the critic mentality, or the artist mentality, and this has long been my mentality: take enough risks on daring, interesting films targeted at adults, and soon the audiences will grow and come around. The demand will shift, the kids will shift, and this ebb and flow of throwaway winter movies, summer blockbusters and fall prestige pictures will vanish.

But in 2012, when we saw a stellar Oscar season of grown-up films like “Argo,” “Lincoln,” “Django Unchained” and “Zero Dark Thirty,” the “cinema is dead” drumbeat vanished for a few months only to return again with the release of “Iron Man 3.”

For Soderbergh however, there is no shortage of good artists or films; the problem with the movies is the business. Listen to his quote about the money-making logistics of the major studios and how this mentality kept him from producing the upcoming HBO movie about Liberace.

“Point of entry for a mainstream, wide-release movie: $30 million. That’s where you start. Now you add another 30 for overseas. Now you’ve got to remember, the exhibitors pay half of the gross, so to make that 60 back you need to gross 120. So you don’t even know what your movie is yet, and you’re already looking at 120.”

“Behind the Candelabra” could’ve been made for $5 million, he claims, but the studios felt to make a profit, they would’ve needed to turn $70 million, which, in their mind, a gay Liberace movie was not going to get. No chance.

So you’re in a rut. It’s a broken model. Soderbergh’s solution however was a bit of a non-answer. “Magic Mike” performed 100 percent better than tracking suggested in its opening weekend, so let’s not do tracking at all. “Side Effects” didn’t perform well because it was marketed too generically in focus groups, so let’s change the way we do focus groups because it’s not an exact science anyway. There are too many big movies clogging the main distribution channels, so let’s give half a billion dollars to Shane Carruth and Amy Seimetz. The suits running the business are less and less movie buffs, so let’s stand on the table and proclaim that we need to fulfill the karmic debt by making a good piece of cinema.

I don’t want to diminish anything Soderbergh said. His words were as insider savvy as they were provocative. But the point again is that the movies are not broken; the business model is.

The movies are a business like any other. And like a handful of other businesses, it’s an industry that has been around for over 100 years with only a handful of drastic changes in the product’s formula. How has Coke survived? How has Hershey’s? I will wager there is as much pop and chocolate in the world as there are movies, but those two products have not had to change the mass-produced aspects people liked about them in the first place.

Where the market is noticeably hemorrhaging is in TV, in which audiences are becoming increasingly niche, and new distribution models are running the major networks into the ground. Although no one seems to be doing anything about it, the movies are the same way, and as Roger Ebert once said, these movies made for everyone are really for no one in particular.

Thus if the movie and TV industry want to answer the call of their customers, they need to do so on a personalized, individual level.

The first entertainment company to answer this call has been Netflix, and Big Data helped them do it.

When producing “House of Cards,” Netflix analyzed data collected from users about what they watched and how they watched it. They know when you pause, when you fast-forward, if you ever came back to finish, if you watched a block of TV all in one sitting and might like to see an original series released all at once, and tellingly, if you watched political dramas, that you also watched movies that starred Kevin Spacey or were directed by David Fincher. Starting to make sense?

This level of information is what you called “unstructured data,” and it’s what sets Big Data apart from the basic transactional data such as email, name, credit card, address, etc. It’s the less tangible information that people are finally starting to see value in and how it can tell a company more about a customer.

Aside from the fact that some people think Netflix is “turning us into puppets,” Big Data is ruffling a lot of feathers amongst entertainment writers lately because of this recent New York Times article. Here’s why:

“A chain-smoking former statistics professor named Vinny Bruzzese — “the reigning mad scientist of Hollywood,” in the words of one studio customer — has started to aggressively pitch a service he calls script evaluation. For as much as $20,000 per script, Mr. Bruzzese and a team of analysts compare the story structure and genre of a draft script with those of released movies, looking for clues to box-office success. His company, Worldwide Motion Picture Group, also digs into an extensive database of focus group results for similar films and surveys 1,500 potential moviegoers. What do you like? What should be changed?”

A quote like this is bound to get a lot of furious press, especially during the “death of cinema” discussions. It boldly asserts that for the price of what you might spend on one minute of CGI mayhem (if that), you can get a tailor made script designed to make money, remove artists from the equation and turn all movies into the tangible products they were always meant to be.

But the article is exaggerating the extent to which anyone takes this guy seriously, and it also fails to dive into how he could possibly have the infrastructure to support analyzing Big Data related to every movie in release and to a broad enough base of moviegoers to make it valuable. Netflix, Amazon and Google can do it because they have millions of users willingly giving them information every day, and this guy has 1,500 surveys.

But here’s where I see Big Data really providing value for the movie industry: if Soderbergh is to be believed that studios have not figured out a good way to reduce the costs of marketing a movie, that’s exactly where an IT department should be stepping in.

Big Data can help a movie find its audience in ways never before imagined. Rather than distribute “Iron Man 3” on 400+ screens nationwide, analytics can help studios decide in which regions it will best perform, what level of advertising is necessary and whom to target.

Just as Netflix decided the best way to release “House of Cards” was to do so all at once as opposed to one episode a week, the whole model of content consumption could change as studios and theater owners innovate new ways to release movies to audiences, perhaps in movie marathons or on-demand, just as has been done for TV.

But imagine how a smaller distribution house could leverage Big Data in similar ways. Would this give tiny indies and foreign films a chance in parts of the Midwest where these films are usually neglected? Could a steadier release schedule help an indie build word of mouth? How could Big Data allow studios and distributors to gather social media information and engage in what plugged in, culturally relevant audiences are saying about these films?

In other industries, the IT department can help an organization reduce costs, mitigate risk, improve business processes and even help produce value. But at the end of the day, they are enablers of a solution, not the solution itself.

In terms of the movies, there’s no reason why IT can’t help marketing reduce the enormous cost of promoting “Iron Man 3.” They can work to streamline the distribution channel as attendance numbers suffer. And they can most certainly make sure that Soderbergh gets the $5 million he needs by finding targeted markets and making sure the studios see a return on their investment.

Because when I see him complaining, when I see Danny Boyle condemning the “Pixarization” of the movies and when I see even Steven Spielberg struggling to even make “Lincoln,” I know there’s not a lack of artists at least trying to make great works of art. I know cinema is not dying because there is no shortage of great movies every year, even every week.

Soderbergh also made a clear distinction between cinema and the movies, and although cinema may never disappear, the movies are a business like any other, and they need to innovate or die.