The Disappearance of the Hit-Driven Business Model

By Chris Moore

The nature of the creative producer’s job doesn’t allow a lot of time to stop and ask questions about the changing industry around us. However, over the past few years, I’ve given myself some time to reflect. Between MANCHESTER BY THE SEA being released by Amazon, and the world shutting down due to a pandemic, it became clear that the job I have now isn’t the one I had when I started back in 1994. Little did I know, I was searching for an answer to a much larger question.

After spending the last few years doing some research, talking to my fellow producers, and reflecting on my own career, I realize now that I hadn’t acknowledged just how much things had changed in the industry as a whole, and how it directly affects our jobs as creative producers. I’m writing this to share what I’ve learned, with the hope that producers who may also be reflecting on their career, or are are just starting out, can learn from my experience and understand these changes as I see them now. I am grateful to Rebecca Green and Dear Producer for providing a forum for what I hope becomes a dialogue for those of us discovering our new business models for 2023 and beyond.

As the industry changes, where do creative producers fit in? How do we make a living and provide services for the subscriber-driven companies? How do we get paid a sustainable salary, while also having healthcare and supporting the overhead of our work, which often comes out of our own pocket? How do we push projects that may not seem obvious until they are made? Projects that are controversial, unusual, or take risks?

Many producers of my generation had a business plan for our careers. For me, it was directly dependent on the success of each individual film. Not long ago, profit in the film industry was based on a hit-driven business model. If a lot of people bought tickets to see a film in theaters, rented the DVD, or paid for a digital download, it sometimes made a profit, and was considered a hit. At the time, producing a box office hit led to an easier time getting your next project made and usually with a bigger budget. 

I had some hits. Some of the talent I worked with became big names, and rightfully so. I was respected for some bets I took early in the life of a project like GOOD WILL HUNTING or AMERICAN PIE, and later, for having an eye for original and unexpected stories that could become hit movies, like MANCHESTER BY THE SEA. I increased my odds of producing a hit by working with talented storytellers who had market value. AMERICAN PIE and its sequels were one version of a recurring business for me and working with Matt Damon and Ben Affleck for a number of projects was another.

Unfortunately, the hit-driven business model I built a career around is not the reality of the industry we are living in today, and I can finally admit that we are not going back to the way it was. I realized I hadn’t acknowledged how much things had changed. Today, there is a very small speculative market compared to the 1990s and early 2000s, and large companies are no longer driven by the profit of each individual film.

The current subscription-based business model removes the opportunity to create a hit. In the way the film economy works now, it is rare to generate a profit large enough to be shared by the parties responsible for making the film. The subscription model also closes the opportunity for additional ancillary profit in foreign markets or home video, which, in the past, could come from different outlets such as digital rental, cable, or broadcast television.

In addition to economic issues, the subscription model has changed the way we watch movies on a cultural level. Audiences today don’t have to decide on every story. They pay for a platform that has menus and choices within it, and they watch movies when and how they want. Streaming has won the battle over media consumers. That means subscription-based financing and profit are the norm.

In this new model for storytelling, volume is more important than quality. If your goal is to gain and keep subscribers, the subscribers must feel they are important to the company. If the company spends time and energy on only certain audiences, the numbers fall, and that company becomes a niche; however, subscription services cannot only cater to niches, they must try to be everything to all people, which places more value on the content platform and its library than the quality of each individual piece of content. This complicates the industry’s own metrics for telling the audience something is good, as box office numbers and awards seem to be losing meaning to consumers.

Without the hit-driven business model, there has become no way for me to continue as an independent creative producer in the same way I was before. Development money + fees + bonuses + profit participation allowed for a speculative model of finding new properties, supporting new talent, and executing other people’s stories. One hit could cover my overhead and the time between projects. But those days are gone. I am writing this because I am not alone and I hope telling my story can provide a framework for making hard decisions about how to build a new business model for creative producers. 

First, let’s define the job description of a creative producer. Mostly, it can be defined by what it’s not. A creative producer is not the executive, or full-time employee of a financier or distributor. Creative producers are not talent. We do not write, direct, star in, or pay for the movies we work on. We are the supervisors of the creative. We make sure all the decisions that go into the final product of the movie – from script to actors, wardrobe to settings, camera to effects – are consistent with what the talent, financiers, and distributor agreed upon when the project was greenlit.

The creative delivery of a piece of content in an agreed upon budget and time-frame requires many, many small decisions, so the industry created a decision-making process from the financier/distributor all the way to the creative producer to manage the delivery of this product. It became clear that each level of management could only focus on a certain amount of details. Heads of studios focused on the whole company’s films, so they had executives under them. Executives focused on a handful of those films at a time, so they had creative producers. Creative producers focused primarily on one film at a time, giving them the ability to focus on these finer details. Creative producers had their own line of producers and directors, and those producers and directors had department heads who focused on even more detailed decisions, which ultimately made up the movie as a whole. The key people working directly with the creative producer are the director, who oversees the creative vision of the film, and the line producer, who oversees the budget. The creative producer is the ultimate form of middle-management who sees the whole picture with the core reason to exist being at the detail-level, focusing solely on a project as a supervisor of the creative.

The 1980s through the 2010s was a great time to be a creative producer. Put deals together, own the library of content, and make big money. I came into Hollywood when this was just exploding, and at the same time, foreign markets were opening up, home video was becoming much bigger with the release of DVDs, and cable allowed for many more channels for a piece of content to reach audiences. In comes windowing, in comes licensing, in comes new markets for content. Speculation became a new business model worth pursuing if a creative producer had the stomach for it; there were new buyers and talent looking for content, and all were free agents. It was awesome – and just for a second, I want to appreciate how awesome it was. I raised money, I partnered with two big stars who were creators and talents, and we had a run. A director I worked with had the mantra, “always be shooting,” and that was the idea. At this time, as a successful working producer, you could count on making about two films a year.

Then that industry matured around the 2010’s. Foreign markets were full and large territories started making their own content. Cable had too much content; you might have 1,000 channels but you were watching five. Big-budget blockbusters were coming out every weekend and the audience was getting fatigued. The home video market was so large that new movies were competing against old movies, and home audiences bought surround sound and big-screen TVs to watch them. That being said, it was still a hit-driven business, and although the demand for products produced outside the majors was falling, they still needed some independent products.

And then, like a virus, high speed internet creeped in. Starting around 2015 and thru the launches of AppleTV+ and Disney+ in 2019, wireless delivery of HD-quality content from libraries became so big no one could watch it all. “Streamers” as we call them now, quietly came to town and annihilated the hit-driven business business model, devastating the independent producer. There was still always an anomaly, from my career, I think of MANCHESTER BY THE SEA as an example of that. However, even after the success of that movie, oh how I did not realize what streaming would do.

The subscription model means content providers are paid regularly no matter the quality and quantity of the product. Makes sense – being paid on a regular basis before you make content is awesome, but in this subscription economy, we have lost the ability to place value on each individual film. If the company spends time and energy on only certain audiences, the numbers fall, and that company becomes a niche; however, subscription services cannot cater only to niches, they must try to be everything to all people, which places more value on the content provider and its library than the quality of each individual piece of content. If your goal is to gain and keep subscribers, the subscribers must feel they are important to the company.

While subscription-based distributors may know how many people watch a piece of content and for how long, they do not pay upon success, nor do they share those numbers in a way that provides bonuses or profit participations for the filmmakers, producers being part of that team. There is no back-end to make up for the hours spent unpaid or the projects still unmade. Finance companies are getting squeezed as well; what was a $20 million dollar budget five years ago is $5 million now.

In terms of producer fees, in a world where there are no hits, there’s no big money to go around for the distributors either. As a result, minimum guarantees have decreased causing budgets to plummet. Producer fees are being divided between many more players such as managers, talent, and rights holders. The amount is less and it is being divided by more people, so the current business model leads many creative producers to work for free. Jokingly, a producer said to me, “we are currently doing double the work and getting half the money.” 

Despite the squeezing out of the creative producer, I believe every movie, even the not so good ones, had a creative producer pull it up a steep, steep hill until it was able to run downhill. Even the great machine of this day, Marvel, was brought to life by creative producers who saw something others may not have. I believe there is a crucial role for us, and part of this discussion is how to make the new power players realize this. 

But despite my belief in the role of the producer, the new Hollywood requires me to understand why someone would pay me, as I was paid before. Why would someone value my taste when I couldn’t back it up with hits and no way to prove I was better at it than any others? What value did I add to a project? Why me? It’s scary to truly ask ourselves this, and this is what woke me up.

In the absence of a hit-driven business model, how do producers prove their value?… 

• A number of creative producers have moved into “production services,” a nice way of saying we will take on some of the liabilities of the production and supervise the completion of union contracts and insurance. 

• Maybe I should try a cheaper, simpler storytelling venue. Maybe books? Comics? Podcasts? Can I build my name in a medium that is less intense and expensive than film and TV, then come back to that later?

• What if we focused our producing efforts on a specific thing people would invest in? Like first-time filmmakers. Original scripts. Comedy. A genre that has a built-in audience, a built-in business model with lower budgets – like Blumhouse has done for the horror genre. 

• If picking a genre gives some security, you also have the option of working for one of the companies already doing it. 

• Other producers are partnering with writers, directors, and actors to run their companies like I did early in my career. 

• Maybe creative producing is great on your resume for becoming an executive? Netflix has several executives who are paid to find projects that their data says they should make. 

Become an executive. Choose a specific genre. Choose talent to work with. Work inside a production company or become a manager/producer. Work for a non-profit. Take on a larger company’s liability. Or accept that the old version of a creative producer is now a hobby. 

I wish this was not the case. I wish this was not how it is. I know good producers who are taking additional jobs to sustain their lives. Independent creative producing seems to no longer be a vibrant, sustainable career as defined in the past.

Right now, creative producers are waiting for the industry as a whole to find a new way of making money; until they decide what roles are valuable in their new models; until the audience decides how many subscriptions they will pay for; until the industry decides how to value each product through awards and markets and consumer response; until the folks in charge realize having expert experienced supervisors of these large enterprises is a requirement; and until we all accept that the answer to all our questions is money, all of us will be struggling to find our way and find a career path that is more reliable than a hobby. 

It is so easy to get lost in the creative process of making a film, the beautiful chaos of it all and the parts that bring us joy. However, if we want to build a sustainable career, we must accept that we have to know more about the money-making models out there – or not yet conceived –  and what others are investing in so we can fight for our place in the industry. 

What I do know is that I had a great run and there may never be a high greater than those first screenings of the hits on my resume. I do accept that my role is not as I want it to be. I believe we as an industry, and creative producers as a subset, are in a moment of permanent change. But the stories need to be told and told well.  The producers who work on them need to be given the pay and benefits for a sustainable life. We have to be honest with the next generation that the system we are all in right now is not working nor does it offer the life you might have been promised in film school.

It took me some time to see my current situation clearly, and maybe that’s the first step. I haven’t figured out a way to be a creative producer in this new version of Hollywood, but I still hope I can champion stories and storytellers I believe in.

The thing I am most sure of is that at the beginning of all the movies we love, there was a creative producer pulling it up the hill. I do know that for many of the true talents we know today, there was a creative producer believing in them and helping them realize their vision. That for every completed film, a creative producer was there the whole ride. And I do know that our industry as a creative enterprise will lose something if we do not continue to have this group of champions.

All of this soul searching has led me to the simpler solution which is creative producers need to become part of something bigger than themselves and their projects. Rather than wait around and see if the industry is going to make room for us again, we must take matters into our own hands and find the thing that replaces the hit-driven model. If we want sustainability, we have to create a new business model that works within this new era of Hollywood. 

I do not know what the answer is yet, and I am considering all options. But independent creative producers have been part of figuring out many problems for this industry over time, and I am writing to start a dialogue with others on how to build a sustainable eco-system and how we hold space for films that push boundaries, entertain, and impact audiences.

I hope you’ll join me.