Usually when a studio like Warner Brothers (a subsidiary of Time Warner (NYSE:TWX)) invests $100 million in a movie, executives expect a lot in return. With this weekend's Transcendence, that is certainly the assumption, but even if the movie under-delivers (which many project it will), this was still a smart risk for its studio to take as the long-term benefits may outdo the short-run returns.
The film industry only works when directors are allowed to take risks. Many of history's most ground-breaking movies have been born out of risk and transcended current cinema as a result. Citizen Kane and Psycho are among the most famous, but then you have more recent films like The Matrix and Inception, which haven't been around as long, but still have made a unique mark.
The directors behind those films may be minted "A-listers" now, but that wasn't always the case. It took time for studios to trust their visions. Clearly after his work on Inception and The Dark Knight trilogy, nobody will ever doubt Christopher Nolan's' "vision" again. The Oscar nominee is a genius filmmaker with an eye for detail and imagination rarely seen in today's Hollywood.
Unlike his contemporaries, Nolan doesn't use what's called a "second unit," a separate group of shooters used to help support hard-to-shoot scenes. Instead it is just him and Wally Pfister, his longtime cinematographer. After winning an Academy Award for Inception, Pfister knew he had reached the level he wanted to as a director of photography and decided he wanted a new challenge.
Pfister was a news cameraman who eventually landed a job on Nolan's first film, Memento, a mind-bending thriller that still packs a punch. After the film, he teamed with Nolan on many more projects and undoubtedly began to learn a few tricks along the way. It was a wonderful partnership that produced a number of amazing movies.
So why switch things up now? In a fascinating interview with The Daily Beast, Pfister explained that in making his directorial debut with Transcendence, it was just his way of pushing himself to the next level.
Every 10 years I needed to make a radical change in what I was doing. I can't really say why. But I will say that I was never afraid to take risks.
It was also Warner Brothers' way of pushing its slate to the next level as the idea of having Pfister in the fold meant it would have a budding relationship with what could turn out to be a rising star. Given that the studio's relationship with Nolan was not as solid as before, signing his frequent collaborator could also be a way around that somewhat sticky situation. If audiences loved Nolan, theoretically they should also love Pfister as the two have the same passion for filmmaking.
That brings us to Transcendence, which stars Johnny Depp as a scientist studying Artificial Intelligence who inadvertently becomes a part of his research when he's gravely injured and his mind is uploaded to a computer.
On paper the thriller has a lot of interesting moving pieces including an intriguing plot, an A-list cast headlined by Depp and Morgan Freeman, and a director full of promise attached. Yes it cost Warner Brothers $100 million to produce, but the payoff could potentially be huge. Now the key word is "potentially" as estimates had Transcendence earning $30 million during its domestic opening weekend, but that has since tapered off to between $20 million and $25 million.
It could be a combination of people not fully understanding the plot of the film or moviegoers not knowing about the Nolan/Pfister connection, but either way the critical pounding the movie took this week didn't helping matters. Still it pays to remember Memento (while better received) wasn't a big financial hit either, so you can't judge a box office career on one movie.
The twist that people keep forgetting in this case is that even if Transcendence disappoints domestically, it could be a financial boon overseas. So far the international crowd has bailed out a number of films this year alone and given Depp has a big global fan base the movie was coming with a nice safety net.
Yet that's not all -- Transcendence has another benefit many aren't aware of; it was not just being given a day and date release in China, it was being given a 3D release there as well.
Movie piracy takes a big bite into overseas profits especially if a film starts long after it bows here in the States. With bootlegging running rampant (especially in China) the studios needed a way to combat it and 3D is looking like the answer. While American audiences have grown tired of the third dimension, international audiences can't get enough of it. By releasing Transcendence in 3D (and IMAX) more people will come to the theaters.
Sony already tried this approach earlier this year with its RoboCop reboot and saw good results, which is encouraging to the industry as a whole. The trend is also beneficial to Warner Brothers as Beijing-based DMG Entertainment was the one footing the bill for the costly post-conversion process. DMG's no stranger to capitalizing on the 3D appeal in China -- it helped bring last summer's hit Iron Man 3 to the country before it unspooled in the US, which led to a massive haul.
If this trend continues it could open a whole new door financially for studios and possibly move international markets into first position for film openings. With all that in mind, it should be a little clearer why this wasn't as big of a risk to Warner Brothers as first thought. In addition to creating a relationship with someone who has the potential to be a major player down the line, the studio also gets to experiment with what could be a global game changer.
In an industry worth billions, all of a sudden $100 million doesn't seem like a bad gamble.
Brett Gold has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.