This morning, Patrick O’Shaugnessy retweeted a Carl Quintanilla tweet on the 1995-2000 dotcom speculative bubble. I wrote about the dotcom crash in real-time for Disinformation. A few years later, I did a post-mortem on the 2000 crash whilst studying in Swinburne University’s Strategic Foresight program.
Why does Hollywood’s upcoming production slate have so many remakes of classic science fiction, horror and fantasy films? Depending on your viewpoint, several reasons.
The Writer’s Guild of America‘s 2008 strike affected the ‘deal flow’ of new scripts that Hollywood’s studios may have purchased and fast-tracked out of development hell and into pre-production. In the language of managerial economics the studios lacked the willingness to pay (WTP) the willingness to sell (WTS) price demanded by WGA members for their services. Faced with months of industrial action the studios pursued a fallback option: remakes of existing properties.
WGA’s delay tactics have given the studios a potential financial windfall in the near-term future. The studios often already own the intellectual property rights for the remakes. Demographics such as inter-generational shifts creates two consumer segments: people who remember the original films, and Gen X and Gen-Y viewers who are new. Ancillary markets can be tapped, from cable television re-runs of the original films to DVD repackages/re-releases, ‘versioned’ editions for collectors, and ‘bundled’ packs of both films. The studios’ windfall is a short-term boost in cashflow which can be used for working capital management or debt-equity leverage. New Zealand’s Weta Digital also benefits as the films require its expertise in digital special effects; the studios can minimise their production costs through currency hedging and business process outsourcing.
The global financial crisis also benefits the studios through a market timing strategy for film portfolio management. The production slate announced so far for 2009-2010 is heavily weighted towards dystopian science fiction films from the turbulent late 1960s and the energy crisis/stagflation early 1970s. There’s also a few 1930s Depression era monster films and 1950s Cold War science fiction. American journalist Annalee Newitz, amongst others, has observed that Hollywood studios turn to genre films during times of social dislocation; this thesis is central to 1950s film noir and its neo-noir remanifestation in the early 1990s recession, and may also fit the micro-trend of counterterrorism films in the wake of the September 11 terrorist attacks. Cinema Studies scholar Geoff Mayer has also explored this thesis in Pre-Code Hollywood cinema and the Western genre.
However, there’s another potential pattern here that might be worth further research, even though correlation is not causation. The 1930s Depression era films appear to fit the 54-to-70 year long macroeconomic cycle (aka the KWave) that Soviet mathematician Nikolai Kondratieff proposed, particularly the Fall and Winter periods of stagnation and recession/depression. The time period between the 1930s, 1950s and 1970s films also roughly fits the 18-year Kuznets Wave identified by Simon Kuznets, and which might explain the deeper/unconscious interest in 1970s film properties. Add a mid-1990s wave of films (perhaps neo-noir or the heroin chic of My Own Private Idaho and Trainspotting), and you have a series of macreconomic cycles that span film genres, subcultural imagery, inter-generational audiences and new cohorts of film actors, directors, scriptwriters and producers.
It may be a neat backtesting/retrospective explanation of how Hollywood studios can revitalise their institutional power. Or, it just may be the theoretical framework for the Entourage crew to shed their up-and-coming careers and achieve some real deal-making longevity.