Miramax and its “Secret” for Staying in Business

Miramax is widely known as an entertainment company that primarily focuses on the distribution of independent and foreign films. Miramax was founded in 1979 and it was “established” by two brothers, Bob and Harvey Weinstein (Perren, 2). However, it took more than a decade for Miramax to become an “attractive target for Disney and other media conglomerates” (Perren, 2). The key focus of this blog is too look at the secret to how Miramax becomes one of the most well-known entertainment companies. Alisa Perren’s book on Miramax, Indie Inc., Miramax and the Transformation of Hollywood, focuses on how the company started from the bottom and eventually achieved success. The journey was long and Miramax was in company with other entertainment companies from the early 1980s, but many of them didn’t last. “By 1992, Miramax, New Line, and Samuel Goldwyn were the only independents left standing” (Perren, 54). The entertainment industry always changes rapidly throughout the years and films like John Lucas’s Star Wars trilogy or other science fiction films revolutionize the expectation of films. This also happens in other genres, especially comedy films as well. For example, the amount of vulgar and drug related comedies have increased over the years with movies like the American Pie films, the Hangover films, Harold and Kumar films and the most recent film Wolf of Wall Street (2013). The content within the film Wolf of Wall Street would normally be something that is taken seriously, but the tendency to joke about it with the addition of drug references is what entertains people who look for a good comedy film. This is just a small example of the rapid change within the entertainment industry.

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Miramax had responded well to the “rapidly changing” entertainment industry by adding more staff, receiving more films, increasing production number and forming new divisions (Perren, 54). Miramax did lose profit with a noticeable profit margin decrease that Perren points out despite gaining more attention by raising the company’s profile (Perren, 54). Perren specifically stated said that the profit margins went down from “9 percent to 5 percent” within two to three years, 1990 to 1992, and they were rumors that “surfaced in the summer of 1990, when the Weinstein’s retained Allen & Co. and Salomon Brothers to look at potential financing options, including a public offering” (Perren, 54-55). Taking some action is always better than doing nothing and giving up because there is always some benefit, even if it is “secret.” The effort of diversification was an extremely necessary step that independent entertainment companies needed to make to keep up with the change. Perren points this out with using an additional example of the entertainment company New Line. Between 1990 and 1992, New Line made an effort to diversify by having its own home video and television distribution divisions (Perren, 55). This is similar in contrast to how chain stores like Walmart and Target are popular in the areas they are doing business in because they try to satisfy customers with the many different options they have. These different options consist of grocery, school supplies, movies and video games, furniture and clothing. Because Walmart, Target and many chain stores that are like them are successful because of the many different divisions they satisfy. Critics reading my post may say “what do chain stores have to do with films or entertainment companies?” However, Perren talks about how Miramax and New Line are opening more divisions to stay in business and continue having success and chain stores also have multiple divisions or departments in which they choose to offer customers services in.

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Miramax did launch its own official art house division with Fine Line Pictures and New Line also did the exact same action (Perren, 55). Miramax and New Line alike had to take a good look at their business and realize that when it comes to entertainment, they cannot keep things the same as they did before. Perren says that “In pondering how to reenter the specialized film business, the studios recognized that they had to proceed differently than they had before” (Perren, 56-57). The music industry for example is always changing the way they do business because what entertains the mainstream is always changing. Kendrick Lamar’s album Good Lid M.A.A.D. City (2012) was an album that entertained many fans of traditional hip-hop, but it didn’t win the Grammy because its songs were not as popular on the mainstream as Macklemore’s hip-hop album songs from his album The Heist (2012). The controversy of hip-hop fans was that Kendrick Lamar’s album was more close to traditional hip-hop, but the fact is that the mainstream doesn’t always look at things the way traditional fans do as things always change. Miramax has stayed in business because they always adapted to the change in the entertainment industry and that’s one of their secrets.

Images in this Blog:

http://galleristny.com/2014/02/morning-links-star-wars-edition-3/

http://logos.wikia.com/wiki/Miramax_Films

Works Cited

Perren, Alisa. Indie, Inc.: Miramax and the Transformation of Hollywood in the 1990s. Austin: University of Texas, 2012. PDF.

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Comments

  1. You seem to be saying that the “secret” of Miramax’s success is its ability to adapt to changes in the industry. How do you see that squaring with Perren’s argument that Miramax was the driving force of some of the most profound industrial changes during the 1990s?

  2. Re-reading your post I was again struck by the analogy you draw between independent distributors and big box stores. I’m not sure I see efforts by Miramax and New Line to diversify — or at least not the ones you name in your post such as creating spin-off companies or new divisions within the company — are particularly comparable to Wal-Mart and Target offering a large selection. I think the more apt comparison would be to something like The Gap, Inc., which focuses on a single market (i.e., clothing), but diversified its line and thus strengthened its position within that market by acquiring complementary brands such as Old Navy and Banana Republic. In the scenario you propose, the Wal-Mart or Target is Disney, not Miramax.

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