No one could have guessed an original musical set in present-day Los Angeles would rake in a record-tying 14 Oscar nominations and become a box office hit to boot. Nor might a casual observer have expected the beguiling sweet-natured indie from a studio more famous for the Hunger Games and Divergent franchises. But with La La Land, Lionsgate Entertainment has pulled off a remarkable return to the riskier, art house-style films that once defined its success.
Before millions of millennials vaulted Lionsgate to new heights on the back of young adult (YA) series such as the Hunger Games, the studio was better known for critically praised films including Monster’s Ball (2001), Crash (2005) and Precious (2009). With the end of the Hunger Games era in 2015, though, Lionsgate seemed to rediscover its independent roots.
Along with La La Land, Lionsgate’s Hacksaw Ridge and Hell or High Water have collectively earned 24 Oscar nods this year, and the total of 26 for Lionsgate releases last year topped all Hollywood studios by a wide margin. Paramount was next, with 18.
“The conversation last year was all about what’s the next step for Lionsgate after the Hunger Games,” said Daniel Loria, editorial director of BoxOffice Media. “They’ve had a number of highly acclaimed releases in recent months that put their standing in a very different light than how people were talking about them previously.”
In that vein, Amy Yong, a Macquarie Securities analyst covering Lionsgate, wrote in a research note last month that the accolades for La La Land in particular could help “restore confidence in management’s ability to source, create and produce movies”.
And with a production cost of only $30m, La La Land has grossed about $270m globally through last weekend, according to BoxOfficeMojo figures, making it that rare beast in recent years: an Oscar favorite that was also a box office winner.
That’s not to say the studio isn’t feeling the absence of its Hunger Games cash cow. When Lionsgate reported its fiscal third-quarter results last Wednesday, revenue in its motion pictures division had fallen 13% to $440m from a year ago. (Most of La La Land’s take has come after the quarter ended on 31 December.) For the period, Lionsgate had a loss of $31m, or 19 cents a share, stemming mainly from its purchase of the premium cable network Starz.
But the studio was not alone in its decision to go smaller. Smaller was bigger across the film industry last year, according to Paul Dergarabedian, senior media analyst at comScore. “In terms of blockbuster films, it wasn’t seen as the greatest year for movies. But the cool thing was that on the indie, or specialty, side of the ledger, these movies had a killer year,” he said.
Besides Lionsgate’s output, he pointed to other independent standouts in 2016, such as Manchester By The Sea, Moonlight, Lion and Love and Friendship, which have garnered critical and commercial success. “People didn’t come out of these movies saying, ‘Man, did I waste my money on that,’” noted Dergarabedian.
In Lionsgate’s case, the studio’s willingness to bet on innovative film-makers and less formulaic projects has paid dividends. That includes not only supporting a rising talent like Damien Chazelle, director of La La Land, but also backing Mel Gibson to helm Hacksaw Ridge.
That film’s success signals a comeback for the controversial actor-director, who became a Hollywood pariah after making sexist and racist comments during a 2006 DUI arrest. Teaming with Amazon Studios, Lionsgate last year also banked on a well-know auteur in Woody Allen, with the release of Café Society.
“Working with these film-makers is a sort of statement of intent from Lionsgate,” said Loria, signaling a commitment to more personal films.
That’s not to say Lionsgate is turning into an art-house boutique, notwithstanding its haul of Oscar nominations this year.
At an investor event last month, Erik Feig, co-president of the company’s motion picture group, highlighted its strategy of assembling a diverse slate of films geared to specific audiences or genres. Besides YA, two new Tyler Perry movies are in the works, as well as action films, horror, and specialty projects like La La Land.
That eclectic mix is evident in Lionsgate’s 2017 release schedule. The lineup includes John Wick: Chapter 2, Power Rangers, The Shack (based on the 2007 bestseller), My Little Pony, and a new installment in the Saw horror franchise. There’s also Wonder, adapted from the 2012 novel about a boy with a facial difference.
The studio is also hedging against the volatility of the movie business by expanding its TV and digital operations. Lionsgate has already made its mark with TV series such as AMC’s Mad Men and Netflix’s Orange Is the New Black. But its $4.4bn acquisition of Starz last year signals bigger ambitions for TV and video-on-demand.
But for now, the spotlight is on La La Land. Having already scored at the box office, if the film wins an armload of Oscars on 26 February, Lionsgate may have proved that smaller is better in Hollywood. For now.
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