Focus Features
In a world where box office hits fill the large majority of theaters across the country, it is interesting to take a deeper look into a specialty film production company. With nine nominations for best picture at the Academy Awards, Focus Features has produced titles such as Brokeback Mountain, Dallas Buyers Club, The Theory of Everything, and more. With an interesting path to its creation, Focus Features is an ever-changing company that is compelling to examine.
Company Management
Focus Features, the Los Angeles based company formed in 2002, actually has roots that begin in 1991 with Ted Hope and James Schamus’ creation of the independent film company Good Machine (referenceforbusiness.com, 2006). This small New York based film company began to slowly grow, eventually forming a joint venture with another independent producer, October Films, to create Good Machine International, bringing them to a world wide stage (referenceforbusiness.com, 2006). After this had occurred, a fellow independent company was formed in 1999, USA films, which was made up of October, Gramercy, and other Polygram Units. Following this creation, in 2001 USA films was purchased by Universal in a 7 billion dollar deal that encompassed all of the USA networks (referenceforbusiness.com, 2006). Finally, this allowed for Universal to purchase Good Machine in 2002, merging the company with USA films to create what is now known as Focus Features.
James Schamus was given the job of CEO for Focus Features, a job which was his for 11 years. Schamus held this position, heading a company that had built up to 104 employs, spread across Los Angeles, New York, and London, until 2013 when he was suddenly replaced by then CEO of Film District, Peter Schlessel (Stewart, 2013). This changing of the guard also lead to a relocation of the Focus headquarters, from New York to Los Angeles (Stewart, 2013). Universal’s motives behind the many changes to Focus was that they said it promised to release more films a year, with a wider appeal than before (Stewart, 2013).
Company Assets
Today the company is almost 200 employees strong, operating as Focus Features in North America and to the rest of the world as Focus Features International (Linkedin.com, 2016). Universal has eased the process for Focus to acquire different companies and assets. It has allowed Focus to open more divisions within the company. For example, in 2004 it created Rogue, which developed specifically action, thriller, and suspense films; Rogue was later sold to Relativity Media for roughly 150 million dollars in 2009 (Cieply, 2009). Universal has also enabled Focus to create movies such as Paranormal Activity 2, The Purge Anarchy and more due to Universal’s 10 year, first-look deal with Blumhouse Productions, a company known for making high profits off of very low budget films (Cunningham, 2014). One last notable division under Focus Features’ reach, is that of Gramercy. The company, which was formed in 1992, was recently revived by Focus in early 2015 to work on horror, action and sci-fi pictures (Petski, 2015). Focus Features is a company that hasn’t sat still since its creation, always allowing for new innovations and constant changes which has helped keep the company thriving to this day.
Business Model
Comparable to all companies, Focus Features’ main goal is the make money, and as its company has evolved over the years, so has its business model. Focus has always been a producer and distributor of film, but over the years it has continued to gradually shift towards more production. Reaching the audience becomes tougher every year, not only because it is difficult to create new, original, entertaining content, but also because the number of competitors increases every year. Focus Features has to compete with the top film companies in the world, such as Lionsgate Entertainment, Relativity Media, and the major film producers like Disney and 21st Century Fox (Goodrow, 2016). Even with such fierce competition, Focus has stayed above water by producing critically acclaimed work year after year. Focus is able to do this by acquiring some of the most intriguing intellectual property on the market. This can be seen in a recent 9-million-dollar acquisition of a Berlin film Loving, an interracial marriage drama that is described as a love story for the ages (Fleming Jr, 2016).
Revenue Model
Initially, Focus was concerned with box office earnings and DVD sales. It sought to improve DVD sales by working with retailers such as Virgin, by having them display its films on rotating rack, leading to sales of over 2 million copies of Focus’ Assault of Precinct 13 within the first week (referenceforbusiness.com, 2006). As time has progressed, and the DVD has become less and less relevant, Focus has continued to adjust to the times, as displayed in its move to Los Angeles. Supplying itself with established and rising filmmakers and talent, it has been able to produce more films and reach wider audience (focusfeatures.com, 2016). A majority of the money Focus is able to produce comes from a foreign audience. Through the combination of foreign-pre sales, a co-financing deal with Commerzbank (A German based Bank) and different equity deals, Focus is able to easily survive lower domestic box office profits (Eller, 2010). Also, with new deals with companies such as Blumhouse Productions, Focus is able to earn millions at the box office with movies with very low production budgets. This formula has kept Focus a consistently profitable company over the span of its existence (Eller, 2010).
Future
Adaptation is necessary to keep a company afloat in the ever changing Film industry. This accounts for the rather complex history of Focus Features and leads one to predict an equally scrambled future. Evidence of this is that current CEO, Peter Schlessel, will be replaced by Peter Kujawski on April 1st of this year (Siegel, 2016). Kujawski, the current managing director of Universal Pictures International Production will be taking over due to a slower year than expected in the third year of Schlessel’s reign (Siegel, 2016). Only time will tell if Focus Features has made the correct management changes.
References
Cieply, M. (2009, January 04). Universal Sells Rogue for $150 Million. Retrieved from http://www.nytimes.com/2009/01/05/business/media/05rogue.html
Cunningham, T. (2014, July 20). Blumhouse Signs 10-Year Production Deal With Universal Pictures. Retrieved from http://www.thewrap.com/blumhouse-prods-signs-10-year-production-deal-with-universal-pictures/
Eller, C. (2010, May 25). Positive cash flow through hits and misses makes Focus Features an attractive asset. Retrieved from http://articles.latimes.com/2010/may/25/business/la-fi-ct-focus-20100525
Fleming Jr, M. (2016, February 13). Focus Features Makes Big Berlin Deal; $9 Million For Interracial Marriage Drama ‘Loving’. Retrieved from http://deadline.com/2016/02/loving-joel-edgerton-ruth-negga-michael-shannon-focus-features-interracial-civil-rights-richard-and-mildred-loving-berlin-1201702174/
Focus Features | About Us. (2016). Retrieved from http://www.focusfeatures.com/about
Focus Features – Company Profile, Information, Business Description, History, Background Information on Focus Features. (2006). Retrieved from http://www.referenceforbusiness.com/history2/32/Focus-Features.html
Focus Features Motion Pictures and Film. (2016). Retrieved from https://www.linkedin.com/company/focus-features
Focus Features revives Gramercy label for genre films. (2015, May 20). Retrieved from http://www.filmjournal.com/news/focus-features-revives-gramercy-label-genre-films
Goodrow, B. (2016). Key Competitors. Retrieved from http://lionsgateentertainmentprofile.weebly.com/key-competitors.html
Petski, D. (2015, May 20). Focus Revives Gramercy Pictures Label For Genre Films. Retrieved from http://deadline.com/2015/05/focus-features-revives-gramercy-pictures-label-genre-films-1201430500/
Siegel, T. (2016, February 4). Focus Features Shake-Up: Peter Schlessel Out. Retrieved from http://www.hollywoodreporter.com/news/focus-features-shake-up-peter-862037
Stewart, A. (2013, October 10). Focus Features Shake-Up Blurs Forecast for Specialty Biz. Retrieved from http://variety.com/2013/biz/news/focus-features-shake-up-blurs-forecast-for-specialty-biz-1200709829/
Stewart, A. (2013, October 02). Revamped Focus Features Led by Peter Schlessel Relocating to L.A. Retrieved from http://variety.com/2013/film/news/breaking-focus-features-ceo-james-schamus-out-peter-schlessel-to-take-over-1200688551/