Hollywood’s ‘Big Six’ Are Profiting from Unoriginality
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In recent years, the digital age has not been kind to Hollywood’s movie studios. YouTube, torrent downloading, large home theatres and a multitude of other phenomena are causing an increasing number of would-be moviegoers to abandon their local cinemas for more convenient, cheaper options. Box office sales were down 3.8% in 2011 and overall attendance fell 4.7% in the same year. In some circles, Hollywood – at least in the traditional sense – has been declared dead.
Interestingly, the movie industry’s saving grace may be a result of screenwriters’ shortcomings in the creativity department. This year alone, over one-third of the pictures released emerge from decidedly unoriginal ideas. These include sequels, prequels, remakes, book adaptations, and, in the wake of the profit-making 3-D technology, the re-release. While studios have looked to various preexisting sources for inspiration since the 1939 success of Gone with the Wind, the Big Six now find themselves getting rather backward-looking in where they turn for project ideas.
Universal Pictures, a subsidiary of Comcast and NBCUniversal, is perhaps the most readily apparent example of this trend. This summer, the studio released the high-budget Battleship, starring big names like Liam Neeson and Rihanna. While ostensibly a romance involving extraterrestrial and maritime plot devices, the film claims the half-century-old Milton Bradley game as its muse. Battleship has raked in close to $300 million thus far. Although largely a flop in the North American market, the adaptation has been a rousing success outside the country, repeatedly topping the charts in multiple countries while grossing a total upwards of $235 million. The film was supposed to be the first in a four-plus film partnership between Universal and Hasbro (NASDAQ: HAS), which bought the Milton Bradley Company in 1984. Hasbro is currently in the process of adding plotlines to classic time-killers such as Monopoly, Ouji, Candyland, and a new version of Clue. Universal was unenthused about the results of this summer’s release, forcing Hasbro to look for other partners in its quest to revamp its seasoned brands.
After the dispute with Universal, Hasbro moved its Candyland project to Columbia Pictures, a subsidiary of Sony Pictures Entertainment, the distribution arm of Sony (NYSE: SNE). Candyland is set to star Adam Sandler and will be made in conjunction with the actor’s Happy Madison Production. Columbia famously made use of conventional source material in 2007 with its Across the Universe, a romantic drama based on Beatles songs. Like Battleship, Across the Universe flopped in North America, failing to make back its $45 million budget, earning around $29 million. Columbia Pictures also jumped aboard the comic book bandwagon by producing The Green Hornet and Ghost Rider franchises, both of which generated box office sales roughly double that of their budgets.
The leader in the comic book field is undoubtedly Walt Disney Pictures, whose parent conglomerate, The Walt Disney Company (NYSE: DIS), owns Marvel Entertainment. Unlike most of the others, Disney’s pictures have been box office hits. Iron Man’s success prompted two sequels (the second of which is still in the works) and successor films such as Thor and Captain America: The First Avenger. The stars of these blockbusters united in this summer’s highly lucrative The Avengers, which grossed $1.4 billion, the third highest sum of all time. The Marvel umbrella has also recently teamed up with Rovio Entertainment to bring iPhone users’ beloved Angry Birds to the big screen. Disney was a pioneer in the nontraditional inspiration trend, as its Pirate of the Caribbean franchise was based on a theme park ride and has grossed $3.72 billion worldwide. Last year’s fourth installment in the series was the production company’s fourth highest-grossing film ever, prompting studio talks to create a fifth episode in the Jack Sparrow saga.
Before partnering with Universal, Hasbro used Paramount as its primary vehicle for moving child entertainment into the media entertainment realm. Paramount, the film distribution arm of Viacom (NASDAQ: VIA), and DreamWorks, another Viacom subsidiary, have successfully released three Transformers movies based off Hasbro’s popular toys of the 1980s and 1990s. The films have so far garnered $2.6 billion, enough for Hasbro CEO Brian Goldner to commission another installment without the direction of Michael Bay. Paramount also distributed G.I. Joe: The Rise of Cobra, a rendition of the Hasbro action figures first popularized in the 1960s. The film grossed over $300 million and precipitated a sequel, G.I. Joe: Retaliation, which is slated for release in March of next year.
Warner Bros., the Time Warner (NYSE: TWX) member of the Big Six, has so far remained relatively distinct from the ploys utilized by its peers – aside from its widely successful Game of Thrones book adaptation. To learn more about this series, check this out. This is about to change with the release of the 3D LEGO movie set to come out in 2014. The film is supposedly 20% live-action and takes characters into an all-LEGO universe populated by the Danish toy company’s most iconic characters. While this will be notable for its singularity in the industry, Warner Bros. can also claim what is probably the most anticipated — let alone unconventional — movie of the year. This year, Time Warner will be able to witness the culmination of its popular comic book-inspired Batman franchise with The Dark Knight Rises. The success of this series cannot be understated, as The Dark Knight had been the highest grossing comic book-inspired film prior to Disney’s The Avengers. Warner Bros. has been making Batman movies since Michael Keaton took on the role in the '80s, amassing a total close to $1.5 billion, making it the fourth-highest grossing franchise of all time. While Christopher Nolan will conclude his directing stint with this installment, Warner Bros. is not done capitalizing — there are plans to reboot the series again in addition to the likely 2015 release of a Justice League movie.
The final member of the Big Six, 20th Century Fox, which is the production company of News Corporation (NASDAQ: NWS), has also been a fan of movie adaptations. This past December featured the second sequel to 2007’s Alvin and the Chipmunks, based off high-pitched playback capability for a novelty record in 1958. Just as the anthropomorphic band endured incredible longevity, 20th Century Fox has seen this franchise deliver quite promisingly. The first film’s box office earnings quintupled its $60 million budget, while the “Squeakquel” and “Chipwrecked” approached half a billion each. Although 20th Century Fox has been coy about its plans to continue to explore the broader tendency to look toward this type of inspiration, it has not ruled out a fourth installment in the series. This could be especially likely considering its current addiction toward series extenuation, resulting in additions to, among others, the X-Men, Taken, Rio, Diary of a Wimpy Kid, Chronicles of Narnia, and Percy Jackson franchises.
While cinefiles often scoff at the unoriginality of the Big Six, it may be the only thing keeping the industry alive in the age of Netflix and On Demand movies. Based on box office results, it seems that the majority of movie-goers are captivated by the redux – a trend that studios will continue to capitalize on as the digital age advances through the next decade. To stay up to date on these issues, check back at WealthLift Insider.
This article is written by John Kocsis and edited by Jake Mann. They don't own shares in any of the companies mentioned above. The Motley Fool owns shares of Walt Disney and Hasbro and is short Sony (ADR) and has the following options: long JAN 2013 $22.00 calls on Sony (ADR). Motley Fool newsletter services recommend Hasbro and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.