Tuesday, June 07, 2005

Dumb Money...

Following up on my post here, Slate has another interesting article on the economics of Hollywood.

The point of the article, once again, is the disconnect between where the Hollywood studios are spending their money, and where their revenue streams are (increasingly) coming from. The digital era has completely altered where movies actually make their money, and what demographic it is that is really the driving force these days. But...the studio's seem stuck in pretty much the same 'let's-over-advertise-to-teenagers' rut its been in for decades now...even as it becomes clearer that the advertising carries less of a return, and the demographics of the revenues have changed from teens marching to the theatres, to adults expanding a DVD library.

I thought this was especially intersting:

Does Hollywood need to remain so out of synch with reality? At present, the studio marketing arms have become exceedingly efficient at stampeding weekly herds of teens to multiplexes and producing impressive numbers. But if that amazing trick turns out to be not worth its average $34.8 million price tag, studios will have to consider different strategies. The most obvious one would be to eliminate the long interval between a film's opening and its release on DVD. Also, if the studios aimed at the much larger and more profitable DVD audience, they would not need to spend so much on the teen herd.

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