Hollywood's Bargain Bin

Avid moviegoers and film watchers share a deep reverence for the days of going to their local Blockbuster or Walmart and rummaging through the DVD bargain bins like they were pirates scavenging for buried treasure. Since streaming's rise to prominence, those days are largely behind us, however the psychology isn't. In retail, there's a micro industry many of you may be aware of, coined as 'reverse logistics,' that exists to repurpose and redistribute distressed or under-purchased goods. Courtesy of AI's remarkable ability to enhance automation and streamline distribution, the industry is worth $770B with estimates of ~10% growth¹. However, in Hollywood, when a movie bombs at the box office, that movie, or sometimes a show, is thrown in a waste bin, instead of the recycle bin. In the era of post-peak TV and IP universe redistribution, the stars are perfectly aligned for Hollywood to try to surf the current, yet many haven't yet.

A box office bomb yesterday can be a commercial success tomorrow if redistributed under a new banner. It's a story we've seen play out profusely over the years, and most box office bombs have an IP price tag akin to a distressed asset. Many of the biggest box office bombs also left a surviving core cult following that, if given more airtime, can expand massively². So, as a studio looking to justify elevated premiums to consumers and optimize costs by purchasing surefire-success IP licenses, why not implement reverse logistics into buying IP? Develop a content funnel devoted to 'bargain bin' buys comprised of the biggest critical darlings, cult-following shows and movies, and movies previously referred to as 'ahead of their time,' then filter out all the ones that are already on streaming services. Likely, all that would be left are the commercial flops streamers may not have wised up to acquire. For the cost of one prestige IP, a streamer can purchase a full 'bargain bins' worth of content: expanding their library to a point of 'perception of abundance,' possibly acquiring the cult fanbase of each of those shows and movies as new subscribers, and creating new universe expansion opportunities without paying IP prestige premiums.

Just last week, Warner Bros announced a new division they call 'Clockwork,' with its sole intention being producing low production cost content with 'innovative' marketing³. Along with TikTok announcing the scaling of its billion-dollar short drama division⁴, all underscore the reality that consumers just want to be entertained in accessible and consumable facets: no matter how measly the budget and overhead was going into the creation of the content. The first streamer to own the unclaimed but adjacent lane as the 'Blockbuster for Hidden Gems' can establish a new frontier that both consumers and shareholders can get behind.