By: Jeffrey Dorfman as it appeared in Online
One of the surprise television hits of the last few years is Duck Dynasty, a show about a family that loves to hunt and fish and occasionally works at their family business making duck calls. If you have never watched Duck Dynasty you may not realize that it is actually a family show, with no sex, violence, or bad language and with many Christian references. Every episode ends with the whole family saying grace before eating dinner together.
The show is also wildly profitable, with twelve million people having watched this season’s premiere on the A&E cable network. That is more viewers than all but a few shows on the major broadcast networks. Yet, family-friendly television shows remain in short supply.
Hollywood’s movie moguls have the same aversion to family-friendly entertainment even though it is a demonstrated money maker. A recent report by the Dove Foundation contains all the facts to suggest that Hollywood’s bias towards sex and violence comes with a big cost.
The Dove Foundation evaluates movies for family-friendliness using six categories: sex, violence, language, nudity, drug/alcohol use, and other. If the movie meets their criteria, it gets to say it is Dove-approved. Some movies actively promote this designation. In other cases families check for themselves online and use the Dove approval as a clear signal that the movie is safe for their kids.
As part of their effort to encourage more production of family-friendly movies, the Dove Foundation tracked the profitability of the top 200 movies each year from 2005-2009. The results are fascinating. Dove-approved films are 2.5 times more profitable than non-approved movies. That translates into earnings of $90 million on average versus $36 million. In simple terms, family-friendly movies are the smart movies to produce from an economic point of view.
In fact, the results of their study show similar results no matter how you slice the data. Ignoring the Dove ratings for a moment, we can just look at the official Motion Picture Association of America movie ratings. Doing so, we find that G-rated movies made a profit of $108 million on average, PG movies averaged $65 million, PG-13 movies cleared $60 million, and R-rated movies earned an average profit of only $13 million.
If we look at return on investment (ROI), we see a very similar picture. G movies had an 80 percent ROI; PG movies, a 48 percent ROI; the average ROI for PG-13 movies was 46 percent; and R movies had only a 16 percent ROI over the five years from 2005-2009.
Yet, in the face of these simple economic facts, this clear and convincing evidence that more family-friendly movies earn higher profits, how has Hollywood responded? The answer is not as economic principles suggest.
Only 3 percent of the movies released each year for wide distribution are G rated, 18 percent are PG, 41 percent are PG-13, and 38 percent are R rated. While the big profits are routinely found in the more family-friendly fare, it is the less family-friendly movies that dominate the cinemas and get the widest distribution.
Obviously there are exceptions to the rule: The Blind Side is a perfect recent example of a major motion picture that was family-friendly and critically acclaimed. These successful examples just leave you wondering why studios, who are certainly not averse to following trends and churning out hits according to the formula of what has worked in the past, are not making family-friendly, uplifting movies as fast as they can.
Basic economics suggests that firms should produce more of items that are earning exceptional profits, particularly relative to other products made by the same firm that are less profitable. Since many of the family-friendly movies are made (or at least distributed) by the same studios that make all the family-unfriendly ones, why would these studios not alter their mix of movies toward the more profitable products?
Possible answers are: that is not what directors want to make, there are fewer good ideas for family-friendly movies, or even that those movies are not the ones that win the prestigious awards. However, none of these answers seems sufficient. After all, nobody is saying Hollywood should not produce movies and television shows that are not family friendly. There are hundreds of movies released every year and uncountable television shows spread over hundreds of channels. There is plenty of room for all genres to find an audience. And since even R rated movies earned a return on investment of 16 percent, they are still profitable.
No, the real mystery is why movie studios and television networks do not continue everything they are doing now and in addition produce more family-friendly shows and movies. After all, with the highest economic returns, it appears that the audience for family-friendly entertainment is hungry for more.
Unless major movie studio and television executives have a bias against producing and distributing family-friendly shows, the most logical alternative explanation would be that they do not know the economic facts of life of their own industry. Modern studios and networks all have plenty of MBA-certified number crunchers around, so the idea that the executives do not know what is most profitable is ridiculous.
This brings us back to bias as an explanation. Perhaps I am missing the explanation that has swayed all the industry decision makers. However, it certainly appears that Hollywood is either more intent on disseminating their view of what society should be like than making money or is simply too jaded to believe there is a large audience still out there that wants to enjoy some wholesome, feel-good entertainment.
When it comes to family-friendly entertainment and the big profits that it can produce, it is Hollywood that seems to have a blind side.
This article was originally published in Forbes Online and is reprinted with permission from the author.