BRAD! ANGELINA! When most people think of media & entertainment, they think of celebrities. But movies, television, and music mean so much more to our world. Entertainment has the power to shape culture and spread information. Entertainment reflects who we are and what we value.
Most importantly for HBS grads, entertainment is one of the few industries that’s recession-proof! Theater admissions and DVD sales are significantly up, in the middle of the worst economic climate in recent history. Entertainment is comfort and escape, especially in hard times.
The HBS Entertainment & Media Conference, held by the Entertainment & Media Club on March 19th, featured a keynote by Bob Iger, CEO of Disney, and an array of panels about film financing, music, television, and film internationalization. Here is a sampling of the discussion in two of our panels:
TRENDS IN FILM FINANCING
“This is a business that is about art. The problem is that art is subjective, but business is supposed to have some degree of objectivity,” said panelist Ben Waisbren, CEO of Continental Entertainment Capital. The unpredictability of box office success makes films a risky investment. Film financiers evaluate source material, who’s attached (director, cast), and distributor demand in order to decide which films to finance.
Despite this system, there are many factors affecting profitability that are outside a producer’s or studio’s control. What other movies will be releasing at the same time? Will the marketing draw audiences? According to one of the panelists, “A great movie with bad marketing can fail, but a bad movie with great marketing can succeed.” Most importantly (and most difficult to predict), will audiences like the movie and create word-of-mouth buzz? The vast majority of movies produced each year fail at the box office.
Despite the risk and uncertainty that comes with investing in films, one thing is for sure: the sexiness and glamour of the product will continue to draw funding even in the worst economic climate.
Body language is universal. That’s why action movies and thrillers translate the best into foreign box office revenue, while dramas and comedies that are successful in the U.S. may not be successful elsewhere. Casting foreign actors like Penelope Cruz and Hugh Jackman can increase box office in their home countries (Spain & Australia, respectively).
One of the big topics of discussion was the success of “Slumdog Millionaire” and how it might change the Hollywood landscape. Will it change the marketability of Indian films or Indian actors? Slumdog starred Indians, but it communicated universal themes: hope and love. It was not an Indian movie for an Indian audience; it was directed by a British man for a Western audience. (It was not a box-office topper in India.)
With the advent of digital media, studios and recording companies are increasingly losing revenues to piracy. This is especially worrisome in countries that do not have strong intellectual property laws. At the same time, globalization allows studios and recording companies to reach ever-larger audiences. People in the farthest corners of the world are now familiar with popular American shows and music. I watched reruns of “Friends” at my parents’ apartment in Bangalore. I ate at a small, elegant café in Paris – at least I thought it was elegant, until it started blasting Britney Spears during my meal!
While you won’t get to party with celebrities every day, entertainment and media is a fascinating industry in the middle of dynamic change. Everyone knows about the products you’re dealing with – from popular shows to blockbuster movies to chart-topping hits. We hope you can join us for next year’s Entertainment & Media Conference – who knows, we might even get a movie star on one of our panels!
Bhavna Muthangi was one of the organizers of the Hollywood Trek and the Film Internationalization Panel for the 2009 HBS Entertainment & Media Club Conference.ÿ Before HBS, she helped develop scripts, cast actors, and supervise film crews for print, online, and video advertising.