marqueeAt the opening of a new building at the University of Southern California’s School of Cinematic Arts in Los Angeles, Steven Spielberg was quoted as saying that the era of the movie blockbuster may soon be over:

“There’s eventually going to be an implosion, or a big meltdown… where three or four or maybe even a half-dozen mega-budget movies are going to go crashing into the ground, and that’s going to change the paradigm.”

George Lucas—between he and Spielberg, producers of most of the biggest movie blockbusters in American history—agreed that the movie industry was due for a reversal of fortune, where the huge movies of the past will no longer carry the mega audiences they once did, and studios will be stricken by the sudden unprofitability of big movies.  Both of them also lamented about the “lesser” movies they made, which almost weren’t accepted by the studios for theatre releases because of their non-blockbuster status.  That’s right: Spielberg and Lucas both had trouble getting their movies into the theatres.

And what they are suggesting is that, at present, lesser movies are hard to produce for movies… but that in the near future, big blockbusters won’t get the automatic greenlight either.  Does this mean Hollywood will have to turn back to the lesser movies, and a different profit expectation?  If so, what should we expect?

In the past, Hollywood wouldn’t throw all its eggs in one basket; it would produce many movies at once, with carefully-trimmed budgets, throw them all out there, and hope they’d attract a large enough segment of the population to make profit for the studio.  The odds were longer for any single movie to be a big hit… but the studio’s odds to make profit were still pretty good, because of the number of flicks they produced.

This is in contrast to today’s films, which are fewer and less diverse than those of the past, designed to hit all the hot-buttons of their target audience—in other words, today’s movies don’t try to target just those comedy fans who like screwball comedies… they are designed (or marketed) to draw all of the comedy fans.  But if a movie flops, you don’t just lose a segment of a genre’s fans… you lose all of them.

So it might seem that Hollywood would do well to go back to the “studio factory” system of knocking out movie after movie, and overwhelming us with choices… right?

Not so fast—because there’s a new aspect of movie selling that alters the old paradigm totally… home video.  Once Hollywood had gained control of television stations to provide an in-home source for their entertainment, they began to develop to-buy versions of their products for home use.  Studios have already discovered new audiences for old films that they couldn’t even get on television anymore, thanks to videotape, DVDs, On-Demand and rental services, and now, digital delivery.  Movies that are deemed not good enough to make it in theatres are being produced direct-to-DVD, making them available to genre audiences and still bringing a profit to the studios.

So, if Hollywood can no longer make the big bucks on blockbusters, the most sensible thing for them to do is to evolve towards smaller and more direct-to-DVD productions, which can be more reliably targeted at lower cost.  Those productions will likely see lower production values than their predecessors.  Thank goodness those TV screens, tablet screens, cellphone screens, etc, are a lot more forgiving than movie screens.

But what about Hollywood’s life-long partner in crime, the movie theatre?  Theatres these days see thinner and thinner profit margins, and practically live from blockbuster to blockbuster as they suffer through the lean times with special productions, renting out their spaces to meeting promoters and evangelists, and hosting birthday parties.  And theatregoers are more likely these days to reconsider the cost of seeing a movie on the big screen, especially if it doesn’t take advantage of that big screen to present big, impressive cinematography and special effects, and opt to see it at home or on their portable devices when it becomes available.  Without the big blockbuster, do those theatres stand a chance of surviving?

For most of them, the answer will unfortunately be “no,” or to be more specific, “not as theatres.”  The end of the blockbuster will bring about the end of the theatre—or most of them, at any rate.  While some will transform completely into meeting places for any groups willing to pay for the space, most will fade away.

This might turn out to be a good thing for live entertainment, however.  A theatre space is well-suited for any number of things, like live theatre, music venues, presentations, clubs, theme restaurants, gyms… a multi-screen theatre could conceivably offer all of these things, and more—or, like my local big theatre a few years ago, simply be repurposed into retail space.  The old theatre could evolve into a multi-venue entertainment complex, offering something for almost everyone to enjoy.  They could even reserve a room for showings of old blockbusters… if enough people will come to see them.

Though Spielberg and Lucas’ comments are not gospel, there is a strong likelihood that they are not wrong, and that Hollywood is on the way to its biggest change since they broke into television.  That change may even involve finally leaving behind the big screen, a long-time-coming divorce that will be messy and painful… but mostly for them.  There’s a good chance the public won’t bat an eye.

Read more about Hollywood’s present dysfunction: Hollywood’s completely broken