Tuesday, October 17th, 2017

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Making Money Hollywood Style: Sequels & 3D

I’m sure by now you’ve all heard the exciting news: Ghostbusters 3 is due out next year. That’s right, the Ghostbusters franchise is back (with the full original cast), which continues Hollywood’s now decades long obsession with sequels—not to mention prequels (I’m looking at you Star Wars), and spin-offs. Take a minute and name as many franchises as you can: Indiana Jones, the Matrix, Jaws, Alien, Saw (what are we up to now, Saw 12?), The Mummy, American Pie, Austin Powers, Rocky, Rambo (way to make your career off franchises, Stalone), James Bond, The Land Before Time, Shrek, this list could go on and on.
A joint study last year by professors at Binghamton University and Florida Atlantic University finally put the whole thing in perspective: Sequels almost never do as well as the original film, but week-by-week they almost invariably do better than non-sequels, particularly when they quickly follow the original film.

As Subimal Chatterjee, marketing professor at Binghamton University said, "Indeed, we have found that some franchises are closely following this practice. For instance, New Line Studios released the Lord of the Rings trilogy in almost clocklike precision: Fellowship of the Ring in December, 2001; The Two Towers in December, 2002; and the Return of the King in December, 2003. A shorter time gap for releasing a sequel is better than a longer time gap given that the ‘buzz’ and anticipation is likely to dissipate in consumers’ memory with a longer wait."      

Turns out star power has a lot to do with it too. As Chatterjee also notes, "For example, people were quite willing to wait for over ten years to see Bruce Willis back in Die Hard or Harrison Ford in Indiana Jones." That’s not to say it’s always about banking the return of the biggest names in Hollywood. The success of a franchise inevitably depends on the quality of the sequels themselves. "If consumers perceive that the sequels are better than the original film," said Suman Basuroy, assistant professor of marketing at Florida Atlantic University, "the number of sequels can have a positive impact on the current sequel’s box office performance. Once again, we found that ‘buzz’ and consumer anticipation can be the ‘make or break’ factor in building the overall franchise."

This whole sequels business follows along with another trend in recent Hollywood productions, 3-D movies. The recent success of Monsters vs. Aliens, which set an opening weekend record with a total take of just under $60 million in the U.S. and Canada, signals that 3-D movies are here to stay. Jeffrey Katzenberg, Chief Executive Officer of Dreamworks’ Animation Department, has already announced that his studio will release all future films in 3-D. "I think this is the beginning of an era," Katzenberg said, "and I think we’re going to see a lot of very exciting films and filmmakers working using this new technique." It’s Katzenberg’s hope that over the next year and a half, the number of theaters equipped with 3-D technology will have roughly quadrupled from just over 2,000 in the U.S. to around 7 or 8,000.

Ultimately, as Hollywood continues to struggle with the combined trends of fewer movie goers and more online piraters (illegal downloads surpassed legal downloads by a five-to-one ratio according to a 2006 study by NPD group), it’ll only make more sense for motion picture studios to back sequels or alternative filmmaking techniques like 3-D. In fact, 3-D movies may someday be the only movies people are actually willing to go to the theater to see. At $60 million opening weekend, Monsters vs. Aliens hit the high-end of studio projections. Sequels on the other hand, tend to cost less, can be made faster, and don’t require nearly as much promotion as an original film. Producers for a movie like Indiana Jones and the Kingdom of the Crystal Skull, can rely on Harrison Ford and Steven Spielberg, the king of the summer blockbusters since Jaws came out in ’75, to sell the film with a minimal amount of advertising. Repetition is just the name of the game.

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