Hollywood now generally makes either big-budget spectaculars, or much cheaper indie fare, with very little in the middle.

And I reckon advertising is going the same way.

The business model of Hollywood was transformed by the introduction of the first 'blockbusters' in the late 1970s - Jaws and Star Wars.

The strategy - a response to increasing competition from home entertainment (first cable, then VHS, then DVD, then gaming) - is now to create 'event' movies that people feel they have to see at the cinema.

These event movies, such as Iron Man, Superman, and Batman, cost about $100 million to make, and the successful ones make good money. 

At the other end of the scale there are indie or arthouse movies, such as Lost In Translation, Little Miss Sunshine, and Moonrise Kingdom. These generally cost under $10 million to make, and the successful ones in this category make good money too.

But in the middle - the $10 million to $100 million bracket - there is almost nothing.

This hasn't happened because film-makers no longer want to make medium-sized films, such as Serpico, The Thing, or Dead Ringers, but because the economics of the industry have changed, due to the advent of competition.

And I believe that we are seeing a similar pattern emerge in advertising, as a consequence of the competition that TV now faces from online.

In short, it still makes sense to make a big-budget TV ad for a car, a beer, or a telco. And it increasingly makes sense to produce inexpensive video content for the web. But the space in the middle - the medium-sized TV commercial - is getting squeezed out.

Chats I have with directors nowadays return constantly to the same theme - that budgets (except for the 'blockbuster ads') have collapsed. And production companies that specialise in 'content' - i.e. less expensive video - are popping up all over the place, both in the production company field, and also within agencies.

It's a slightly painful transition for some, and the economics and process for 'content' are something that we're all still figuring out, but like it or not, the change is here.

As creatives, we should embrace it. Because the 'Hollywoodisation' of advertising, while a big change in economics, doesn't necessarily impede creativity. Look at it this way: Hollywood produces some moronic and derivative blockbusters for sure, but also some fantastic ones, while the arthouse world is equally capable of spawning both genius and drivel. In the same way, we get some fantastic big-budget TV ads and some dumb ones; some highly innovative and creative content pieces, and some cheaply-produced shit.

It feels very different making a big TV ad than it does making a content piece. But the opportunity to do something good is there with either, since just as with movies, the quality of an ad is something independent of its budget. It always has been.

P.S. I saw Gravity the other day, and I can't understand why everyone's raving about it. It's basically a $100 million special effects extravaganza with a somewhat cheesy storyline - essentially a similar product to Avatar or Battleship - isn't it?
 

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