In terms of what we’re learning on the film side, I think we underestimated the creative community’s need and desire for another major studio level partner to provide the expertise and the resources to treat these types of mid-budget, star-driven films like the most important assets on a slate, rather than the filler. Storytellers – whether that be acting talent or writers or filmmakers – are incredibly excited to have a new studio like this, where mid-budget movies are effectively the true tent poles of the company.
The legacy majors are incredible companies and they do great things, and they will continue to, but we are offering something unique in this business right now. We're doing it in a very different way. There are a lot of very excited people who want to take advantage of that for themselves and for the projects that they want to be working on.
The freedom to build a film studio from the ground up with an entirely clean slate has been an extraordinary luxury. The reality is that we are fully up and running, making films, marketing and distributing them in a way that’s comparable to how the major studios do it, with only 100 people at this point. The ability to create this type of efficient machine that can do this level of work at this size and scale at a small fraction of how legacy studios staff and operate, I think has been incredible confirmation of one of the big reasons we all got into this.
It starts with identifying extremely talented executives who are experts in how it's always been done but are excited about doing it differently. Let's not ignore how it's been done and how it's been done well, but we began with the premise: if you could start from scratch today, how many people and what types of people with what skillsets would it take to do the same work? That simple, straightforward question creates answers that are very different from how you reorganize a structure that's been in place for a long period of time, by definition. We have a very talented, very experienced, legacy major studio trained team, who loved the idea of, "How can I do great work in the most efficient way possible?" Everything about our entire process has been streamlined to eliminate excess work that isn't ultimately beneficial to us achieving our goals. Our development process is significantly more streamlined, our production process is significantly more streamlined, because we have truly married the production and marketing departments in many ways.
We have separate production and marketing groups, but everyone is participating throughout the entire process. The marketing group is never struggling to figure out how we're going to sell a movie we've made. That decision of what we're going to sell was made at the same time we decided to make a movie, and it was made in concert with our filmmakers. In a way, every part of the process has been streamlined and that has proven to be very efficient and very compelling. We've had a number of films come out so far, including hits like "The Gift" and "The Boy," "Bad Moms" will be the first real true, down the middle model movie we've had.
I think that comedy is a particular area of expertise. Certainly STX Chairman and CEO Bob Simonds' track record in the business was significantly built in the comedy space. During my 15 years at Universal, many major success stories came out of the comedy space. It is an area that I think we have a particularly high level of confidence in, and a particularly strong track record to back that up. When you see this cast in this concept, you immediately understand how exciting and how valuable this group of women in this type of movie can be. The concept of the movie is very easy to communicate. It is a highly satisfying, very well-made, highly marketable movie, made at a very responsible price point, so that, in success, everyone involved with the film stands to benefit greatly from having worked hard to make it great and make it responsibly. I couldn't be more excited about its potential.
“Free State of Jones” was basically the first film that was green lit at the infancy of the company, and the validation of director Gary Ross and producer Scott Stuber and Matthew McConaughey entrusting the filmmaking, marketing, and distribution process to an entirely new studio, was important. Obviously we're all disappointed that the film didn't perform better, but the fact that we had these incredibly high caliber filmmakers and talent believing that this company had the ability to help them bring this project to market, I think, the long term benefits to the company are extraordinary.
That said, we all recognized going in, while there are plenty of movies in this general genre space that have worked really well, we had to make sure that we constructed the financial setup for the film in a way that wasn't unduly exposing anyone to severe risk. The only way we were going to make that film was if we had assembled a collection of partners, both domestically and internationally, who together believed in the quality of the proposition, believed in the talent behind the film, but wanted to spread the risk fairly and evenly. That's what we did.
We had a real success with this small horror film called “The Boy,” which did exceptionally well, over $70 million in global box office on a $10 million budget, but on opening weekend there was a historic snow storm on the east coast that literally shut down a number of the most important markets in the country. You can never anticipate some variables. Some movies, no matter how hard everyone works, don't turn out as well as one might want. The key is if every time you make a decision, you truly and honestly believe that the movie has a chance to be great, that you have a clear idea of how to sell it, and the risk reward model makes sense. If you're that excited about each and every film, then yes, some will work and some won't, but your wins will drive the company, and your losses will be mitigated and minimized where they never truly harm the company.
Yes. Our slate partners are obviously in every film but we did not look for any additional financing partners on “Bad Moms.” We control significantly more of this film than we would have on something like “Jones.”
Our slate partners have expressed interest in being a part of everything we're doing, whether or not it has any particular appeal in China. I don't think there's any way to responsibly run a movie division these days without recognizing and appreciating just how important the Chinese marketplace is. When there is an opportunity to make a film or be involved with a film that has some likelihood of working in China, I think we are spectacularly positioned because of the incredible quality of our Chinese partners, to figure out in those cases how to maximize that opportunity.
Our first true co-production, which is a Jackie Chan movie, "The Foreigner," is in post-production now. I think that we see a huge global opportunity for that movie, and absolutely believe that it will be an incredibly exciting, appealing, and successful offering in the Chinese marketplace.
They are not co-greenlighting our movies; they are investing in and believing in our expertise in identifying films that will work well in the global marketplace. That being said, we recognize and are incredibly grateful for the quality of the people and the companies behind these partnerships. There is an ongoing strategic dialogue all the time about how we're running the business, but we have the ability inside STX to determine what films are being made.
Bob Simonds has a very long history and track record of doing business in China. His knowledge in this area, the relationships that he's built, and the quality of the partners that he's assembled have made everything infinitely easier than anything I've ever experienced. I think all our partners have a great respect and understanding of how to do business in a mutually beneficial way. That business philosophy and expertise has been brought to the table by Bob, by our board, and by our partners and is one of the extraordinary joys of being able to work at this new studio.
What we've learned is if you do what you say you're going to do, and you do it in a way that makes sense, and you're treating these mid-budget films like they're the most important films on your slate, a lot of great talent is going to come knocking on the door asking if they can be a part of it.
On top of that, one of the things that I think is most exciting is the unparalleled horizontal integration at the most senior levels of this company. When we see a great piece of material, we look at whether it is best served starting as a digital property, as a game, or on television. We have the ability and resources to channel that material into the most appropriate platform for the storytelling. We're not incentivized just to get movies into the marketplace. We're incentivized to identify great movies but also to make sure that any and all other parts of the company are being well served by the amazing story tellers who come through our doors.
There are truly no walls between divisions here, so the fact that we are able to speak to our colleagues who are running the other parts of the company, and ask the question — not, "How do I maximize revenue for the film group?” but, “how do I maximize value for the company?" That very basic and seemingly obvious question is asked by senior leadership across the company, whose entire incentive is that the company do as well as it possibly can for itself, its investors, and its storytelling partners. That is, in and of itself, game-changing.
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