Cognitive Labs

Why do the major film distributors offer sequels rather than new fare?

Answer: Risk Reduction

A major release is expensive. To generate positive box office returns, it is statistically more likely to wager on proven characters, story, and 'brand' or mindshare than it is to create a new entity that can command traction.

For Kraft, a manufacturer of food products, nacho-cheese flavored macaroni and cheese would be a safer new product than something completely new, though risk-averse, drawing on a known consumer base.

The formula with an extant share of mind is more likely to succeed, because the 'floor' or minimum return is much higher than the totally unknown project.

There are some areas in the film universe that run counter to the blockbuster approach. For example, one of the reasons the 'horror' genre persists with producers is purely business - it provides profitable returns on much lower budgets and production costs - actors can be unknowns, special effects tend to be localized, and emotional intensity drives word-of-mouth mindshare, so that these films frequently generate a gross of 5 to 10 times production cost and can provide cash streams for years through International distribution and DVD's, which can obtain a cult following. Respected art-house films generally break even, at best, or provide fractional percentage returns, even though they can enhance the range of roles for participants by building up artistic cred and make winning honors more likely in the future.

Labels: cred, horror, sequels