In Blockbusters: Hit-making, Risk-taking, and the Big Business of Entertainment, Anita Elberse explores all the elements behind making the biggest hits in movies, TV, music, books, and sports. The entertainment industry has seen a rapid shift around the way it consumes pop culture. And perhaps counterintuitive to the democratizing influence of the internet, entertainment businesses are successfully making bigger bets on even bigger titles. As Blockbusters reveals, pursuing projects with high risk and high reward is actually the best long-term business model.
I spoke to Elberse about the book, the effect of the internet, and how the entertainment industry may change in the future.
In the book, you introduce the "tent-pole strategy," which is basically the opposite of the age-old advice of diversifying one's portfolio. Why does the tent-pole strategy work?
A “tent-pole strategy” or, as I call it, “blockbuster strategy” is one in which a content producer makes huge investments to acquire, develop, and market concepts with strong hit potential, and then banks on the sales of those titles to make up for the middling performance of their other content. It’s a popular strategy: many of today’s leading film studios, television networks, book publishers, music labels, and video game publishers live by this approach.
Why does it work? For one, strong brands and high production values matter. Higher production budgets allow studios and other producers to afford the best creative talent, the most sought-after properties, and make the highest-quality products. Scale also brings marketing advantages: it is relatively cost-efficient to advertise those tent-pole bets. And trying to create blockbusters fits the way in which consumers make choices: we like to talk about the latest films we’ve seen, or the latest books we’ve read, which makes us converge on the same choices.
That doesn’t mean that producers should bet only on blockbusters, though. In my book, I also explain why smaller bets are important, even if they might have lower odds of success. It’s about having the right balance in one’s portfolio.
Blockbusters is focused on media from mostly the past decade. What has changed in the past ten years that makes the tent-pole strategy so effective? Is it a new strategy or is it a response to a changing environment/audience?
My book indeed is based on a decade’s worth of research on the entertainment industry, so it discusses many of the biggest successes in recent years. I would not say that the audience has fundamentally changed in recent years—in fact, the laws of consumer behavior I describe are surprisingly constant. But the changing environment certainly plays a key role in the popularity of the blockbuster strategy.