Blockbuster Strategy
The blockbuster refers to a strategy where a company invests a large amount of money on a few brands or talents to create a buzz for a particular product that produces the company’s most profits. The product’s revenues hold up the rest of the company. For instance, Alan Horn’s decision to spend $250,000 to create a shot of a boat in high seas during a storm for the “The Perfect Storm” is an example of this strategy (Elberse16). Although actors George Clooney and Mark Wahlberg were not big stars then, Horn hoped that this strategy would enable people to believe that the film was going to be big, thus attracting their attention, and eventually producing positive outcomes. The blockbuster approach encourages organizations to spend massive resources on one product to achieve financial success. Whereas this strategy can be beneficial, it’s also associated with huge risks, which can lead to losses.
Although the blockbuster strategy uses famous stars, and great marketing and advertising budgets, it is associated with box office flops. The flops occur from multiple issues, such as pirating, high competition from video-on-demand and other streaming sites, and rising ticket prices (Herrington 80). Consequently, the film is unable to achieve the expected financial potential. Elberse recognizes the blockbuster strategy as a huge bet which can crash, leaving a studio with a massive write-off (21). Media executives implement this strategy to divert their limited marketing and production resources to a single product with the hope of turning it into a best-selling product. Therefore, the occurrence of any hiccups that reduce its success can significantly hurt a company’s financial status, undermining its ability to invest in other potential projects.
The viability of the blockbuster strategy results from its ability to encourage investors to diversify their funding to a single or few projects with the potential to increase revenue generation. Low-budget media productions can fail to capture the public’s interests and imaginations due to the possibility of creating a low-quality product. With more substantial investments concentrated in a specific project, producers and their teams alongside the cast have access to unlimited resources, increasing the ability to develop a high-quality product and attract masses. Adequate and appropriate marketing and advertising resources enable the production company to reach out to its target audiences and prepare them for the upcoming film or project. However, the capacity to benefit from this strategy strongly depends on the organization’s ability to produce exciting and affordable products that match the target audience’s current expectations and interests. Besides, the distribution and marketing channels used should be convenient and appropriate.
Low-budget niche productions can be effective alternatives to blockbuster strategy, allowing production companies to diversify their resources to different products targeting specific populations. Instead of focusing on a mainstream high-budget product, media executives can push for the development of products designed to cater to limited specific public preferences. Elberse indicates that blockbuster bets are aimed at mass audiences (18). Under this alternative strategy, the productions created will target a particular niche, reducing the financial risks involved in a blockbuster as it operates amidst considerable uncertainty.
The primary aim of investing in any project is to increase profitability. Although the blockbuster strategy offers a potential measure of achieving this financial goal, the uncertainty and potential risks involved can lead to massive losses. Such an occurrence can easily cause a company to fall. Investing in low-budget niche production can help reduce these risks while maintaining the potential to boost incomes. However, the choice of a strategy should depend on an organization’s overall goals, resources, target audiences, and the nature of the product developed.
Works Cited
Elberse, Anita. Blockbusters: Hit-Making, Risk-Taking, And The Big Business of Entertainment. Macmillan, 2013.
Herrington, Colton J. “Film Marketing and the Creation of the Hollywood Blockbuster.”Oxford(2015): 1-109. www.egrove.olemiss.edu/cgi/viewcontent.cgi?article=1218&context=hon_thesis