Explain the appeal of low to medium budget films to Hollywood conglomerates.

Three female African-American mathematicians who work at NASA play a pivotal role in astronaut John Glenn’s launch into space. Meanwhile, they also have to deal with racial and gender discrimination at work.

A conglomerate is a combination of multiple business entities operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company. Conglomerates are often large and multinational. For example: Disney, Samsung, google. Hidden figures is made by Fox 2000.

• Budget Size: 25 million USD
• Box Office: 236 million USD
• With a budget of $25m Hidden Figures is a low to medium budget Hollywood film, an industry category which has recently been recognised for its profit potential.

A $15 million film, which is considered a small-budget film in Hollywood, might have a promotional budget that’s higher than its production budget. This is because many films that don’t have a built-in audience (like those based on best-selling books like “The Hunger Games”) need to get people into the cinema. Romantic comedies or some children’s films need to promote themselves via TV commercials and media advertisements, posters etc, and those costs add up quickly. For a film budgeted between $40 and $75 million, its P&A budget might be over $20 million.

“on the other hand media play a pivotal role organising how people make sense of the world.”

Globalisation (in terms of media ownership)

Vertical Integration & Horizontal Integration

Vertical integration is an arrangement in which the supply chain of a company is owned by that company.

Gatekeepers

Regulation / Deregulation

Free market vs Monopolies & Mergers

Neo-liberalism

Surveillance / Privacy / Security / GDPR

Fox is a major conglomerate of the filming industry because it owns 17 stations branded under the “Fox” trademark and has bought out 175 small independent film companies that do not trade under the “Fox” trademark. Fox can also be seen as the dominating conglomerate of the film industry due to it recently purchasing one of the most successful and famous film companies, Disney, which is also a large conglomerate in the film industry due to owning Marvel, Pixar and the American Broadcasting Company.

“Hidden Figures” was a small budget film that cost $25 million to create and $6.88 million was spent on advertising, meaning a total of $31.88 million was spent on producing the film. However, Fox managed to create a total revenue of $236 million from producing the film, almost 9 times more the amount that they spent to create the film. The success of the film created with such a short budget can be down to reviews, while it was a small budget film, audiences were increased by the many good reviews from critics and the multiple awards it has won, both specifically for the film and for the individual cast members involved in the film. By creating multiple low budget films, Fox will have more funds that they can use to produce more films that will attract audiences and create revenue. For example, if Fox produce 1 large budget film and spend $150 million creating it, they may create a total revenue of $1 billion. However if they spend $25 million and create 6 films across different genres, they may create $250 million+ per film, in total that would equal 1.5 billion+. The more films they have out on the market, the more reviews they will get for their films and the more awards they are likely to earn from them. The more credit that Fox gets, the more people are aware of them, thus meaning they will attract more audiences. “Hidden Figures” has attracted a wider audience, especially the black community by including that minority and they also created a hybridization of the history, biography and drama genre in order to attract the audiences who enjoy them genres of films.

The success of “Hidden Figures” can also be down to the cultivation theory. As Fox owns Disney, the main dominator of the film industry, and Disney is known for its successful films, people will see that Fox owns Disney and have created a film, therefore, due to the successes of the Disney branded films, Hidden Figures must follow their production methods and be a successful film. Fox may also decide to follow a low budget film strategy due to the high profit potential that has been produced by the smaller film companies that have created a high revenue producing a low budget film.

Notes:

Indicative content:

The content below is not prescriptive and all valid points should be credited. It is not expected that responses will include all of the points listed. Responses are expected to demonstrate knowledge and understanding of how low to medium budget films appeal to Hollywood conglomerates.

General points

• This is a question about the industrial contexts of media production and patterns of ownership and control in the contemporary context.
• The question requires not the analysis of the Close Study Product but rather a commentary on what it reveals about the current state of media production, distribution and circulation.
• The question invites students to explore the subtleties of media production, distribution and circulation and its contexts wherein success is measured in terms other than ‘profit (prestige, credibility, social conscience, balance, diversification).

Hidden Figures

• Hidden Figures is a co-production between independent production companies and a major Hollywood conglomerate through its film subdivision Fox 2000.
• Fox as a conglomerate with diverse cross-media elements including facilities for media production, distribution and circulation means they have the structures and the means to get films with an independent ‘feel’/consciousness/aesthetic to a mainstream audience.
• The wider strategy of media conglomerates is to facilitate their control of the markets around the world, this includes low budget and low to medium budget fare, like Hidden Figures, films perhaps more likely to garner awards and attract prestige.
• With a budget of $25m Hidden Figures is a low to medium budget Hollywood film, an industry category which has recently been recognised for its profit potential.
• Distribution techniques – focus on traditional distribution and exhibition linked to targeted audience.
• The concept of “risk-taking” in terms of subject matter which might not be tackled by big budget productions set against specific targeting of budget and audience.
• Focus on social and cultural ‘capital’ as well as commercial return: marketing predicated on the ‘untold story’ of black female mathematicians.
• Strong links to contemporary concerns and debates about race in the US.
• The film is also targeted at an audience often ignored by Hollywood due to age, gender and race and thus can be explored in terms of the social and cultural context in which it was produced. Also the film tests out the viability of this audience as cinema-goers.

Plan:

Explain the appeal of low to medium budget films to Hollywood conglomerates. Use Hidden Figures to support your answer.

• it made $236 million with a budget of $25 million (almost 10 times the budget)
• talk about outrage marketing (through representation) in order to boost profit
• Hidden Figures is a co-production between independent production companies and a major Hollywood conglomerate through its film subdivision Fox 2000.
• talk about fox as a conglomerate with diverse cross media elements including distribution facilities
• prestige and awards from medium to low budget films as products are more likely to be distributed worldwide (not too expensive)
• it could have been used as a test for outrage marketing especially as it was produced and distributed in the us which has ongoing issues about race

• Media concentration / Conglomerates– One big company that owns other companies
• Globalisation (in terms of media ownership) – The process by which businesses or other organizations develop international influence or start operating on an international scale.
• Vertical Integration & Horizontal Integration– A horizontal integration consists of companies that acquire a similar company in the same industry, while a vertical integration consists of companies that acquire a company that operates either before or after the acquiring company in the production process.
• Gatekeepers– Someone who controls access to something
• Regulation / Deregulation– Deregulation is the process of removing or reducing state regulations, typically in the economic sphere. It is the repeal of governmental regulations of the economy.
• Free market vs Monopolies & Mergers– The free market is an economic system which is based on supply and demand that has very little or no government control whereas a monopoly is when a company dominates a certain sector of an industry
• Neo-liberalism– this is a form of liberalism that tends to favour free market capitalism.
• Surveillance / Privacy / Security / GDPR– General Data Protection Regulation (GDPR) is an EU law that states that there needs to be protection against data for all individuals and citizens withing the EU and European Economic Area.

Key words:

• Media concentration / Conglomerates
• Globalisation (in terms of media ownership)
• Vertical Integration & Horizontal Integration
• Gatekeepers
• Regulation / Deregulation
• Free market vs Monopolies & Mergers
• Neo-liberalism
• Surveillance / Privacy / Security / GDPR

• Hidden Figures is a co-production between independent production companies and a major Hollywood conglomerate through its film subdivision Fox 2000
• Case study of industry context would include Fox as a conglomerate with an exploration of the role of low budget film making in its wider strategy.
• With a budget of $25m Hidden Figures is a low to medium budget Hollywood film, an industry category which has recently been recognised for its profit potential.
• Distribution techniques – focus on traditional distribution and exhibition linked to targeted audience.
• Students do not need to watch the film but will need to be familiar with the production context and distribution materials to support advertising and marketing including the official website, trailers, posters, social media presence (twitter, facebook etc). A useful overview of the campaign can be found at:
  https://christhilk.com/2016/12/29/movie-marketing-madness-hidden-figures/
• The concept of “risk-taking” in terms of subject matter which might not be tackled by big budget productions.
• Ideas and debates about ownership and control, for example the idea of conglomerates using vertical and horizontal integration to ensure global market dominance.