An Entertainment Company’s Business Model That Christian Content Creators Should Adopt
(Note to readers. Lionsgate has since abandoned this model and has struggled ever since. This is about the original business model it started with.)
One of the more interesting entertainment company’s in the world in my view is Lionsgate. The most important thing to learn from it is it has incorporated a business model that lends itself very well to where the Christian entertainment industry is at this time.
Bear in mind when using Lionsgate as a potential business model to adopt, I’m obviously not referring to its content in general, but its means of building a profitable business from a small financial base.
How Lionsgate built its business
The way Lionsgate successfully built a profitable business was to use small niches that were under the radar of its larger competitors, while spending relatively small amounts on films in particular, which enjoyed large enough demand to turn a nice profit.
In the early years before it acquired Summit, it would spend very small amounts of money when measured against industry standards, and churn out a significant number of films that were almost always profitable. In some cases it even spent less than $1 million on a project, which could make more than 5X what the costs were.
As it released the films, it would use the free cash flow and invest in slightly larger projects if they made sense. It repeated this tactic over and over again until it built up a large film catalog while allowing it to invest in larger projects if it chose to.
Afterwards, the large number of franchises has allowed it to leverage its brands by licensing them in a variety of ways, including fairly recently, forays into theme parks. They aren’t interested in owning and operating the theme parks, but generating new revenues streams through the licensing of its content to other companies with experience in running theme parks.
The point is it put together a string of small but profitable hits that resulted in its building up its capital base. That further allowed it more flexibility to continue on with its existing business model, or transition to one that embraced larger projects, which is what the company decided to do with its acquisition of Summit at the time.
Keep in mind it wasn’t only producing low-cost films that brought success, but the decision to target verticals or niches that had a large enough audience base to generate positive earnings.
Why that’s a successful strategy is because almost all of the larger film producers aren’t interested in targeting those small markets because they don’t move the revenue or earnings needle much.
Applying business model to Christian content producers
One of the first things Christians that have a goal of creating quality entertainment with a message need to understand, is the production company they run, even if it consists of one person or a small crew, has to run it like a business. That’s true even if your goal isn’t be generate a profit.
For example, if you think of your video content as a non-profit, there is still the need to generate enough revenue from the project in order to invest in new projects. Another alternative would be crowdfunding, but that can be unreliable and inconsistent. The truth is usually there you will already have to have a following of decent size to make it work. I’ve seen some that have successfully done this with content in general, buy which I mean in all creative mediums, including writing. But they have all had a base following that believed in their overall worldview and goals. Because of that they were willing to invest a significant amount in those projects. If you don’t have a fairly large following, you won’t be able to raise much money to create your movies.
With that in mind, the best thing to do is to start small and have reasonable expectations for sales or distribution deals. From there, take any money that is made and invest it into your next project. When doing so, work to make some type of improvement over the last film or video project in order to build momentum by improving on what you’re doing. Part of that could include adding better equipment or possibly, hiring services that can make your film better. There are a lot of places you can find freelancers that are low-cost but very good at what they do.
As for choosing projects, the best thing to start with is to decide on a specific niche or vertical you want to compete in, and get good at doing those. This could be something like wholesome family films, documentaries focusing on specific issues, or any number of areas that would appeal to smaller but interested audience.
A critique of Christian films
I’m don’t necessarily agree with some of what this young man has to say, but it’s worth listening to. Some of the things like improving your craft and improving the storytelling are definitely things I concur with. Expanding beyond the overall narrative accompanying most Christian films is another important thing to consider.
=================== End break
How to view the Christian market
At this time Christian producers, for the most part, have targeted a slice of the market that caters to very specific tastes and demands. All you have to do is look at the various Christian films to recognize this. That’s not necessarily negative; it’s simply a very provable observation from watching many movies made by Christians.
What I see needing to be done going forward is for Christian filmmakers or producers of short-form content that would be similar to that watched on TV, to start branching out in a lot more categories and genres. There needs to be a lot more content that is edgy or gritty without compromising our beliefs.
We need to branch out into fantasy, science fiction, thrillers, and numerous other niches that would be of interest and attractive to Christians and non-Christians alike, but portray the reality, and many times messiness, that comes with life.
I’m not talking about getting into extreme vulgarity or other elements accompany films that come from Hollywood. What I’m talking about is making films that include things like the consequences of decisions that are made. That leaves a lot of creative room to develop stories from a Christian worldview, but which aren’t afraid to show the realities that can come from rejecting it.
We need to expand our perception of the Christian market beyond what it is in our day. Not only that, we also need to take into consideration the fact we have the ability to create stories and narratives from a distinct and unique worldview that many non-Christians would be attracted to and influenced by.
In other words, what we consider the market for Christian film or video content is in my opinion, far larger than we know, and we need to look at a variety of ways to address the market in a compelling way.
In regard to video content created by Christians, we shouldn’t be discouraged by the lack of capital at this time to develop projects. Start where you are and do the best you can with what you’ve got. Get better and better at the tools of your trade; become an expert in your craft.
If you create quality content, the market will be there to consume it. Focus on smaller niches and audiences that are attracted to very specific ideas, niches or verticals. When starting small the worse thing to do is try to be all things to all people. Even the larger entertainment companies know they can’t successfully navigate those waters on a consistent basis.
As for the business model of Lionsgate, it’s one that should be adopted by Christians. The one caveat there is it’s limited if there is a goal of becoming a giant provider of content. But like Lionsgate, if you ever get to the size you have a choice to make, you should have the experience to know which direction to take.
The reason it’s limited is because there are only so many films or TV shows that can be created in a year. Even if you had the money, the market can be saturated to the point of resulting in diminishing returns per film or project.
I understand most if not all of you reading this don’t have to be concerned with this, but I’ve seen a number of people working on short-form content that could result in a significant number of releases in any given year.
My purpose in writing this article is to provide you with a framework to think from as you work on your various film or video projects.
With my knowledge of the entertainment industry and business in general, the type of business model used by Lionsgate would be the one that produces the best long-term results for Christian content producers.
The bottom line is it’s a lot better to get a lot of singles than it is to try to hit a home run. Trying to be successful by producing a giant hit is not much different than going to Vegas and tossing the dice in hopes of hitting it big. The odds are dramatically against you.
In the end, know the market you’re creating your content for, constantly improve your craft, and work on developing video content that is made for a specialized audience. I see that as the way forward for the vast majority of Christian filmmakers.
Finally, be aware that low budgets don’t necessarily suggest low production values. After all, look at how many indie films with very low budgets do very well. Most of the time money isn’t the issue.