April 20, 2018

Who gets the Oscars?

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It’s Oscar time again with the usual retinue of highly paid stars, glitz and glamour. But what really makes a successful film?

Back in 1983 I read William Goldman’s book Adventures in the Screen Trade, which had a formative influence on my own thinking about strategy. Goldman is a highly influential screenwriter – for example, he wrote Butch Cassidy and the Sundance Kid and All the President’s Men – so I reckoned he knew what he was talking about.

He pointed out that ‘nobody knows anything’ in Hollywood when predicting which films will be financially successful. This may appear odd at first given the vast budgets for both production and advertising, plus the extraordinary fees paid to leading actors. But Goldman was right, as evidenced by many massive flops of films generally in Hollywood.

Yet he made a prediction that is still true over thirty years later: he said ‘people want more of the same’ and that the future would be dominated by sequels. Rocky III had come out in 1982 and was an immediate hit; today about one in five Hollywood films is a sequel and on average they earn about $35 million more than non-sequels. (You can see some number-crunching here if you’re interested.)

So how did this affect my thinking on strategy? It might seem glaringly obvious but I realised that ‘nobody knows anything’ applied not just to Hollywood but to any activity that attempts to peer into the future. If you can accept that everything is a gamble then you are one step closer to understanding the world as it really is, rather than what you would like it to be.