The Social Network

Turns out Hollywood can make money on more than just giant, effects-driven spectacles based on comic book characters and old TV shows. Studio-made prestige dramas like 'The Town' and 'The Social Network' -- the sort of Oscar-courting, grown-up fare that the studios used to produce routinely before the blockbuster era -- are doing well at the box office, too.

There's a caveat, of course: The movies have to be made on the cheap. In a recent column in the Los Angeles Times, industry pundit Patrick Goldstein observed that such movies only seem to make sense on the balance sheet when studios can make them for under $40 million. But it's hard for an industry built around the making and marketing of $200 million movies to make and sell what used to be considered the quirky, adult-minded fare best suited to smaller, fleeter independent distributors. Those outlets have all but gone out of business, while the studios have all but forgotten how to launch anything but mega-event movies -- or cheap horror movies, which pretty much sell themselves without the need for star salaries or big marketing budgets.

Still, the notion that Hollywood has to relearn how to spend just $40 million in order to get back into the quality drama business doesn't necessarily have to be bad news. Maybe the successes of 'The Town' and 'The Social Network' can point the way back -- the way forward -- to an era when everything is on Hollywood's menu, not just movies on the extreme ends of the spectrum.

Conventional wisdom has it that dramas for adults are a tough sell. They tend to have premises that can't be described easily in a single sentence at a pitch meeting or in a 30-second ad. They tend to require the cultivation of critics (whom the studios would prefer to bypass, as they do with horror movies or video game adaptations that they don't bother screening for reviewers) and word-of-mouth audiences, perhaps by playing in only a few cities at a time before expanding to nationwide release. They appeal to an over-35 audience that is believed to prefer cocooning in front of a home theater system to going out to the cineplex, an audience that will also eventually just rent the movie on Netflix instead of buying the DVD. They don't lend themselves to sequels. They don't sell toys and Happy Meals. And while they might get extra marketing mileage out of an awards campaign, they have to be released into the crowded year-end Oscar marketplace, since spring is too early for Oscar voters to remember a movie, and summer is for blockbusters.

None of these notions is necessarily true, but that's how Hollywood operates. The major studios are much more comfortable with the blockbuster business model, with its massive outlays of cash, its easy-to-sell concepts (usually based on pre-sold names the audience already knows), its merchandising tie-ins, its worldwide simultaneous release dates, and its earning most of the money back on opening weekend instead of over weeks and months.

That's been the studio business model for more than 20 years. For a while, though, it ceded the care and feeding of dramas to the independent studios. Outlets like Miramax figured out how to make movies for grownups that not only won Oscars but also turned profits. For a time, the two systems co-existed side by side. Soon, however, the major independents became so successful that the studios bought them out -- and then proceeded to mismanage them into the ground.

So for the past few years, while the remaining independents have been languishing (or making vampire movies for teens, like Summit's 'Twilight' films), the mid-level drama has all but vanished. The studios haven't been making them. The indies have, but they lack the marketing muscle to draw big audiences for them. That's why the Oscars in recent years have been dominated by such little-seen indie films as 'The Hurt Locker,' 'Slumdog Millionaire,' and 'No Country for Old Men,' modestly budgeted dramas that wouldn't have gained a mass audience but for their Academy Award victories.

The eventual successes of those films suggests that there's still a market for quality dramatic movies, even if there's no one around to serve it. Instead, all the quality drama writers and directors seem to have defected to TV. Talking this week to the New York Times, 'Mad Men' creator Matthew Weiner suggested that the reason TV does better than movies at presenting thoughtful, adult dramas is economics: "Something happened that nobody can make a movie between $500,000 and $80 million."

The Town

Now, however, with Warner Bros. 'The Town' (cost: $37 million) and Sony's 'The Social Network' (cost: $40 million), there seems to be a model for how studios can make and market mid-range dramas. To date, 'The Town' has earned about $107 million worldwide, or about three times its cost. 'The Social Network' has grossed about $81 million, more than twice its cost. (And both are likely to continue to earn tens of millions more over the next few weeks.) That's the kind of return on investment that compares favorably to the percentages for a traditional blockbuster like 'The Last Airbender' ($315 million worldwide on a $125 million budget) or 'Salt' ($289 million on a $110 million budget).

Here's the tricky part. It may be easier to spend $40 million to make $80 million than to spend $150 million to make $300 million and get the same return on investment, but Hollywood would rather do the latter than the former. It looks better to earn $150 million than $40 million, and the blockbuster marketing model is down to a science, while the drama model is still scary and confusing. But the studios could mitigate some of that risk by making, say, four dramas for what they used to spend on one blockbuster. That's four more chances to win Oscar bragging rights as well.

Not that I think this scenario will actually play out; a survey in The Wrap of each studio's upcoming slate of movies for the next year or so indicates a lot of sequels, spin-offs and other business as usual, and precious little original, dramatic, harder-to-sell fare.

Still, there's one other reason it's in Hollywood's best interest to make more dramas: As Goldstein points out, it's a way to forge strong relationships with the industry's most talented filmmakers while getting them to make movies on a budget. This includes top actors as well, who can usually be persuaded to lower their asking price if they're think they'll have a shot at an Oscar, And if there's one thing Hollywood loves as much as profit, it's getting talented people to work cheap.