Umair Haque / Bubblegeneration

Friday, November 16, 2007

Edge Principles: Light Beats Heavy

You know, Blowtorch isn't a bad idea. Not perfect - but lots of potential.

But there's a serious flaw lurking at it's heart.

The very essence of success for Blowtorch means massively dropping the cost of producing movies - shifting from blockbusters to snowballs.

So why does Blowtorch need >$100 mil?

Let me put that another way.

Here's another key principle of the edgeconomy. One of the tremendously cool things cheap interaction does is free us from the costs and risk of yesterday's industrial assets.

Lightweight business models are possible because interaction is cheap - and in most markets, they utterly and totally dominate heavyweight business models.

So I'm not sure Blowtorch understands the elemental economic point: it's own success means shifting film from heavy to light.

But it seems to be fighting to deny this truth from the day it's born.

-- umair // 5:13 PM // 1 comments

Comments:

Umair,

I’m the CEO of Blowtorch and when I read this post, specifically this part:

The very essence of success for Blowtorch means massively dropping the cost of producing movies - shifting from blockbusters to snowballs.

I jumped up and slapped one of my colleagues a high five. When composing the business plan for Blowtorch, a cofounder shared with me a stack of research showing every movie made in the last 10 years for less than $6 million (average $3M) AND had a screen theatrical release of at least a single screen (on average, 500 screens). The data revealed that with about 50 movies meeting this criteria, the average return was 3x in domestic revenue ($9.2M) and a whopping 7x ($21M) with video included. The group included, on the high end, Napolean Dynamite and Super Troopers and, on the low end, Thumbsucker and Party Monster.

These are precisely the category of movies Blowtorch will make—hopefully more in the Napolean Dynamite and Super Troopers category. What’s crazy is that the movie industry at large returns only $.65 across all movies including bloated blockbusters.

Best,
Kelly Rodriques

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Kelly Rodriques // 6:56 PM