The film library, at first glance, always evokes a dusty movie archive, but in Hollywood, it means a steady stream of inexhaustible wealth. Hollywood into the film library, often refers to the first release of more than 7 years after the film, when the film has completed the complete distribution process, from the theater, audio-visual products to television broadcasts and overseas markets, etc., and completed the process of income return, from the perspective of accounting, the film has also completed the "depreciation" cycle, can be thrown into the warehouse. But in the eyes of savvy Hollywood executives, with the development of new media technologies and the development of consumer markets, the resources of the film library can still be redeveloped and utilized to achieve new market value, especially for classic films that have been popular with audiences.
In their long history of nearly a hundred years, Hollywood studios have accumulated rich film library resources. As shown in the table below, as of 2010, the number of film libraries in Hollywood's seven major studios reached 20,100, and these accumulated films have become an important source of revenue for Hollywood. Take Warner and Universal, two major studios with more than 5,000 libraries of films, which generate $500 million in cash flow each year. Such cash flow can help large studios maintain operational stability and even turn the tide when studios encounter crises.
As shown in the table below, in the history of Hollywood, there have been many stories of Hollywood studios selling some of the library resources in exchange for operating funds or huge profits. MGM is the most prominent example. Founded in 1924, the studio had a difficult fate and suffered many economic crises, but fortunately its library contained more than 4,500 films, including aces such as "007", which often became its "life-saving straw", such as in 2007 and 2008, the studio generated $525 million and $500 million in cash flow for MGM, respectively, helping it to maintain its operations despite heavy debt of $3.7 billion. In terms of developing film library resources, Hollywood studios can be said to have a lot of experience.
In Hollywood's approach to the development of film libraries, the most powerful is to use new technologies to upgrade classic movies and then re-release them in theaters. For example, in the mid- to late 1980s, some studios embarked on plans to colorize black-and-white films. By 2002, as imax developed an image processing technology that could digitally convert 35mm traditional films into 70mm film format films, imax screenings began to enter the commercial operation stage, and a number of classic films such as "The Lion King", "Beauty and the Beast", "Apollo 13" and other films were converted into imax versions for re-distribution.
In recent years, with the surge in the number of 3D screens, some big studios have begun to tap new profit growth points by converting 3D versions of classic movies. Among them, cartoons are more popular because of their relatively simple despotism, such as "The Lion King", "Beauty and the Beast", "Finding Nemo", "Monster Power Company" and other classic cartoons have 3D re-screening versions.
Compared with animation, the conversion of live-action films to 3D is more complicated, but some studios have begun to experiment, such as 20th Century Fox and Paramount Pictures, which spent $18 million to convert Titanic to a 3D version. Released in April 2012 to commemorate the 100th anniversary of the titanic's sinking, it achieved a decent box office, reaching 950 million in China alone. And George Lucas has spent years translating his Star Wars series into a 3D version.
Compared with shooting directly with 3D technology, the cost of converting 3D is relatively low and showing a decreasing trend. According to the president of Legend 3D, in 2010, a 2-hour movie, converted into 3D, cost about $100,000 per minute, but now, its cost has dropped to $25,000 per minute. Using 3D technology to convert classic movies that were once popular in the film library has almost become a profitable business.
Of course, the big screen can accommodate a relatively limited number of films, and most films do not get the opportunity to be re-screened in theaters on a large scale. But they can still create market value through other distribution channels that can accommodate more films, from televisions that became popular after the 1960s, videotapes in the 1980s, to DVDs in the 1990s, to Blu-ray discs since the new century.
In the 1940s and 1950s, after television appeared on the historical stage, it was once regarded as an enemy by hollywood studios, but after a run-in, television became an important source of revenue for studios, and in the 1970s and 80s, with the development of new television networks such as cable TV and satellite TV, some specialized movie channels, such as hbo, showtime, movie channels, Sundance movie channels, independent movie channels, etc. have emerged, and the demand for movie broadcasting is increasing. For example, MGM launched a television service thistv in 2008, which provides tv stations everywhere with the film and television resources in its film library throughout the day, and the two sides share advertising. The service quickly gained popularity with local television stations, where channels have exploded, and nearly 80 million U.S. households now have access to the service.
Audio-visual distribution is the most important way for Hollywood to develop film library resources, although in recent years, the overall trend of American film DVDs and Blu-ray discs is in a downward trend, but the situation of film library films in audio-visual distribution is better than that of new films, because those who like old movies are often film fans with higher education and income levels, and they buy audio-visual products of film library movies with collectible purposes, and their consumption is relatively stable. In 2012, the library earned $2.1 billion in distribution revenue, accounting for 44 percent of total U.S. film and video distribution revenue, 10 percentage points higher than in 2004.
For Hollywood studios, re-distribution of old movies can produce higher profit margins, especially Blu-ray discs, which usually sell for more than $20, while a more successful movie Blu-ray disc can sell 100,000-200,000 copies. In order to increase revenue, studios began to increase the number and variety of old films released, and also carried out special theme planning or promotional activities, such as distribution kits, commemorative editions, etc. For example, in 2012, Universal Pictures celebrated its centenary and took the opportunity to reinvent some of its most recognizable films, released on Blu-ray Disc, including No War on the Western Front (1930), Spartacus (1960), and Scarface in 1983. Last year, 20th Century Fox Family Entertainment launched a fan poll to recommend nine classic films and distribute Blu-ray discs, including the 1930s films "Dangkozhi" (1939) and "The Call of the Wild" (1935). Ghosts and the Undead (1947) and Black Swan (1942) of the 1940s, and Carmen Jones and First Sight (1957) of the 1950s.
Following the development of audiovisual distributions, video sites like Netflix have provided a new market for studios' library resources as they have evolved. Netflix alone pays more than $1 billion a year to several major Hollywood companies, and most of its tens of thousands of movies are resources from Hollywood's film library. And Hollywood studios are also increasingly aware of the online development value of the long-tail market of film libraries. In March 2013, for example, Warner Bros. launched the Warner Archive instant service, where users pay $10 a month to see classic movies from Companies like Warner Bros., MGM, Raiden and Allen Arts from the 1920s and 1990s. By May 2013, Warner, MGM, and Universal had removed 2,000 of their library films from Netflix and placed them on the Warner Library Rewards website in an effort to nurture this new market.
In addition to online broadcasting, some companies are targeting the online entertainment application market and tapping into the value of the film library. For example, yoostar entertainment group has developed a set of game system, they have purchased authorization from the filmmaker in advance, selected some classic movie clips, let the technicians erase the main characters through the computer, and users can synthesize their own image into the movie clip scene, and perform together with the original role of the movie, the user can say the original lines of the movie, you can also say the lines created by yourself, the game software is also equipped with an electronic teleprompter, the position prompt program, the user can try any number of times to get a satisfactory effect, The resulting video can be uploaded to Yoostar's website or shared on other social networking sites such as Facebook and myspace and Youtube. In order to use these features, users need to pay $169 for a dedicated camera and buy movie clips for $1.99 or $2.99 a piece, and the original copyright holder of the movie clips can get a share from each download. It is these innovative development methods that make the film library a veritable "small treasury" of Hollywood's major studios, playing a pivotal role in Hollywood's longevity.
Author | Peng Kan
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