RENEE MONTAGNE, HOST:
And the history of the movie business is littered with famous, expensive flops. "Ishtar," "Heaven's Gate," "Waterworld," "The Lone Ranger" - all breathtakingly expensive movies with big stars, that lost a lot of money. But for every flop, there are even more high-profile blockbusters, and a Harvard business school professor argues in a new book, aiming for blockbusters does pay off in the long run.
Author Anita Elberse joined us to talk about just that. Good morning.
ANITA ELBERSE: Thank you for having me.
MONTAGNE: What makes something blockbuster? I think we generally imagine movies when we hear the word blockbuster?
ELBERSE: Sure, yeah. It is identified a lot with movies, but I use the term more broadly to describe big bets in the world of entertainment, whether it's film, television, book publishing, music, or a range of other industries. And the core idea in the book is that a blockbuster strategy, so a strategy in which a company, a content producer, be it a film studio or a record label or a book publisher, spends a disproportionate amount of their budget on just a select few of the most likely winners, that that blockbuster strategy, that that is actually the surest path to success.
MONTAGNE: In the book, you tell stories of music industry blockbusters. Give us one of those stories.
ELBERSE: One of me favorite cases is one on Lady Gaga. And what a case study entails is me having access to everyone around Lady Gaga, and actually in fact Lady Gaga herself, and being able to ask questions. So what I was able to do is really understand what Troy Carter, her manager, is thinking when he's planning the release of, in this case, her "Born This Way" album in 2011.
And what I found is that they are well aware that it's necessary for them to embrace risk, and to go as big as possible with that release. So what I found fascinating is that in launching "Born This Way," they realized, we have to go so big that this is not even something the record label can pay for.
What we need to do is get a whole bunch of partners. And they partnered up with Best Buy, with Zynga, with Gilt Groupe, with Starbucks, with a whole bunch of players that would make the launch even bigger than what a record label could do.
MONTAGNE: How circular is this? I mean, is it possible that all the marketing and the money that gets put into making a blockbuster makes a blockbuster?
ELBERSE: In many ways, these are self-fulfilling prophecies. What you get when you put all your resources behind a product, is you get everyone to join in. If you are championing a product, your salespeople will follow and say, wow, this is really going to be great, we need to support this too. Your retailers are going to join in and say, this is going to be the greatest book that anyone has ever seen, or this is going to be the biggest movie of the season.
So they will join in and help. So what you often see is that if you swing for the fences, lots of people will come and support you. It's not the only reason why they're so successful, though. We also see marketing advantages. It's much more cost-efficient. If you double the production budget for your movie, you're not necessarily doubling the advertising budget. So in a way it's relatively inexpensive to market these movies.
MONTAGNE: Now the whole idea of a blockbuster isn't news. It sounds, though, like it is becoming the end-all be-all, and that doesn't sound good for a lot of what you might call creativity out there. All the money flows towards one big act, one big book, one big movie, one big TV series. Doesn't that leave a lot of other worthy projects behind?
ELBERSE: Yeah, I hear that a lot. I hear a lot of people say, this is quite a pessimistic message and I honestly don't think it is. But if you think one step beyond this, what we're really seeing is that those sure bets are paying for all these other products. To give you an example, we wouldn't have had "Gravity," which, I think, by all accounts is a fantastic movie that's really pushing the boundaries in terms of acting and in terms of cinematography and technology being used.
And that's a $100 million movie, which is a really, really risky bet for the studio. They wouldn't have made that movie, it's not a tent pole movie, it's not a blockbuster bet, they wouldn't have made that movie if it weren't for all the successes that they had in the past decade at Warner Brothers, with the "Harry Potters" and with the "Terminators."
So what we're seeing is that entertainment businesses are very good at realizing what it takes to have an effective output, to have an effective portfolio, and yes, there are a few big bets in there, but that pays the way for these smaller bets and these projects that are really pushing the boundaries. And I think we see that all around us.
MONTAGNE: Harvard Business School Professor Anita Elberse, thanks very much for joining us.
ELBERSE: Thank you for having me.
MONTAGNE: Her new book is called "Blockbusters: Hit Making, Risk Taking and the Big Business of Entertainment."
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