Project Risk, Quality, and Procurement Monitoring and Controlling
Order Description
Topic 2: Project Risk
Read the article:
Ribera, J., & Sieber, S. (2009). How uncertainty and risk management impacts the success of Spanish film projects. Journal of Media Business Studies, 6 (4), 49–74.
Project risk is typically described as events that happen to someone or something. Risk managers analyze the probability that such threatening conditions or events will occur and try to make the risk acceptable. This common approach, however, fails to account for the fact that risk also consists of internal factors, such as the characteristics, practices, and deficiencies of the organization itself. The question of what is or is not a pathogenic condition, however, is largely subjective. The article concludes that risk analysis must examine differing perspectives in the organization regarding threats, potential consequences, and appropriate responses. The authors assert that project managers should recognize the existence of these differing views before they can jeopardize project success. They offer guidelines on how to do this:
Analyze the subjective perceptions of risk by…
Getting primary stakeholders to identify and analyze the risks they see, and create their idea of a plan to resolve them
Getting the same people to review each other’s’ analyses, looking for signs of contradictory interpretations
Explore the implications of the differences, including…
Whether a particular difference would hamper effective risk management
Whether there are alternative approaches that would avoid the problem of creating new risks resulting from stakeholders’ conflicting perspectives
Assess the different types of risk mitigation such as
Avoidance
Limitation (also known as mitigation)
Transference or Deflection
Acceptance
Take a position either in support of the authors’ conclusions or in opposition to their conclusions and either rebut or defend their conclusions through researched, cited references.
Remember that this is a discussion, so keep your responses succinct and to the point. Respond to at least three of your colleagues.
Be sure to write your initial post according to APA format using citations/examples to substantiate your position and give credit to your references at the bottom of your post.
synthesize your analysis of the reading as a conclusion and then evaluate your synthesis.
Copyright © 2009 Journal of Media Business Studies. Jaume Ribera and Sandra Sieber, “How
Uncertainty and Risk Managment Impact Success of Spanish Film Projects,” 6(4):49-74 (2009).
How Uncertainty and Risk Management Impacts
the Success of Spanish Film Projects
Jaume Ribera
Sandra Sieber
IESE Business School, University of Navarra
ABSTRACT This paper studies the impact of risk project management of
film productions on the success of the release of motion picture films. By
looking at the production of three Spanish films, the paper analyzes the
challenges that producers face throughout the various stages of a film
project. It specifically focuses on management’s approach to the
uncertainty that may arise during the development stage of the project.
Four distinct uncertainty types are identified: variation uncertainty,
foreseen uncertainty, unforeseen uncertainty, and chaos. The paper
shows how the appearance of different types of uncertainty requires
producers to adjust their management style, and how appropriate or
inappropriate actions have an impact on the likelihood of an overall
successful release of a motion picture.
KEY WORDS: project management, project process, uncertainty, risk
management, motion pictures industry
Motion picture production and the success of a film at the box office is
normally considered to be driven more by the so-called “artistic”
considerations and luck than the application of rigorous project
management techniques. The objective of this paper is to explore the
applicability of project risk management frameworks to the film industry
in order to understand how good management of the inherent
uncertainty in a film production may increase the likelihood of success of
the film’s final release. The field is of special interest as, both in the U.S.
and Europe, the motion picture industry has evolved into a network of
project-based companies. As more and more industries become
increasingly project-centric, interest in summarizing the film industry’s
50 Journal of Media Business Studies
know-how has risen dramatically for managers working in other media
and even in many other fields.
With this objective in mind, this paper offers a detailed breakdown of
the processes involved in the management of motion picture projects and
cites examples of uncertainty that may arise under each phase of
production. Specifically, the paper makes an in-depth analysis of how
three Spanish motion picture firms have dealt with uncertainty at the
various stages of film making. Empirical support is provided through
interviews with producers of several Spanish films and review of internal
production documents, as well as existing literature on motion picture
projects. Analysis of data provided by box office results and media
coverage is also used to define what is considered to be a “successfully
managed film”. The paper finds that the approach taken to uncertainty
may increase the likelihood a film’s success.
THE FILM INDUSTRY
The media is made up of a broad range of industries creating and selling
a wide variety of products. Commonalities between these products are
centered on the need to be money-making operations, where the content
is created by a group of talented people, which in turn is then distributed
to mass audiences. However, media products and their environments
vary considerably among themselves. Identified within the media sector
are two distinct categories of products: continuous and single creation.
Continuous creation products deal with the repetitive process of
transforming content, which can be found in products such as magazines
or newspapers. Once a process is established for a particular product,
failure rates are relatively low. Therefore, the focus is not on content but
on process management and the ability to expand upon prior successes
(Picard, 2005). The second type, single creation, is original in thought
and content; for instance motion pictures and books. This type of product
creation reflects what is referred to in the literature as a project, a onetime
activity with a well-defined set of desired results, with definite
starting and finishing points, undertaken by an individual or
organization (Maylor, 2003; Meredith & Mantel, 1995).
The film industry is one of the best examples today of a project-based
industry. If there is a business where it can be said that participants live
and die by projects, then film-making is that business (Finney, 2008).
Every film is a project in itself and it is usually referred to as such on a
daily basis. The key project manager in making a film is the producer
(Finney, 2008), whose point of view is adopted here. According to the
Producers Guild of America, a producer performs an assortment of
functions that extend across the entire filmmaking process, from
development to exhibition, as discussed below.
Movie making has evolved a long way in the 25 years since
Goldman’s (1983) assertion that “nobody knows anything” in the movie
51 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
industry (p. 39). The process is well-known, and it has very clearly
defined stages: screenwriting and development, assembly of the creative
team, pre-production, production, post-production, and ultimately,
distribution. However, “the paradox of managing projects in the film
industry is that we need to master the principles of how projects are
supposed to be managed to make films, but to be effective we must learn
to cope with the failure of these very principles” (Finney, 2008). But
knowledge is not the same as control. “There are few industries where
project leaders and managers have as little control over results as in the
film industry” (Finney, 2008). Risk stems mainly from demand
unpredictability and is intensified by the front loading of the costs, which
occur almost entirely prior to a film release and, furthermore, are
committed in the early stages of the project definition, leaving little for
the producer to control. This situation is, however, not unique to the
movie industry. Walfisz et al. (2006) describe the characteristics of a
video game development in a similar way: “Success can only be gauged
when the work is complete. Decision points (gates) therefore become
fuzzy, goals depend upon progress and tend to be more qualitative,
groups become more important in progress, and decisions depend upon
stakeholders’ criteria and contributions” (p. 488). In film making, as with
many projects that touch on art, the managers cannot afford the amazing
luxury of knowing where they go by the time they start (Austin & Devin,
2003).
Hollywood, especially, is a remarkable illustration of managing
single creation products, which has allowed for its solid position and
influence on the world’s film industry. Hollywood was once referred to as
“the dream factory”, producing genre films that were proven to have
appealed to audiences everywhere, hence limiting risk (Schatz, 1999).
However, changes in politics and cultural values along with the advent of
television brought about a drop in motion picture attendance.
In an attempt to battle against television’s appeal, movie firms
adopted new marketing tactics and began to use the latest technology
available to film making (e.g. wide screens, three-dimensional images).
Since the profitability of standard-generic studio fare decreased, the film
industry repositioned itself and adopted a strategy of producing
“blockbusters”. These movies have substantial budgets, star power, and
massive advertising that draw audiences into theaters. In spite of this,
productions still bear a high threat of failure. One of the main difficulties
encountered by producers is predicting consumer demand. Since films
are extremely technical in nature, it is not feasible to create “test units”
to validate commercial success or failure (Picard, 2005). To try and
outweigh the risk, companies will remake successful films, bring in
established directors and actors; all in hopes of creating another
blockbuster (Picard, 2005). Viewed as a supplement to blockbusters,
independently produced films came to bear. These film producers seek to
break away from the limitation of corporate control and explore
controversial ideas not (yet) received by mass audiences. Movies made as
52 Journal of Media Business Studies
independents usually stress high quality, in terms of creativity and
innovation of screenwriting, directing, and acting (Robins, 1993). Due to
minimal budgets, a successful independent film can have a high profit
over cost. Even with marketing strategies and the combination of
blockbusters and independent films, overall movie attendance has
dropped in recent years. The escalating problem of film piracy
contributes to the decline of audience numbers in many countries.
In particular, Spanish cinema has seen a slump in the number of
moviegoers than compared to that of the global industry. The lowest
attendance record was in 2007 (see Table 1), despite the release of “El
Orfanato” (The Orphanage), the second largest box office hit ever for
Spanish cinema and the largest of the year, ahead of Hollywood
blockbusters like Pirates of the Caribbean and Shrek 3.
Table 1: Number of Viewers and Box Office Returns in Spain 1998-2007
Year Number of
Viewers
Spanish
Films
Number of
Viewers
Foreign
Films
Total
Viewers
Box Office
Spanish
Films
Box Office
Foreign
Films
Total
Returns
2003 21,731,317 115,740,684 137,472,001 €100,861,602 €538,569,582 €639,431,184
2004 19,282,967 124,649,175 143,932,142 € 92,875,294 €598,732,668 €691,607,962
2005 21,289,722 106,361,503 127,651,225 €106,211,310 €528,740,074 €634,951,384
2006 18,772,734 102,881,747 121,654,481 € 98,409,293 €537,747,776 €636,157,069
2007 15,795,434 101,135,258 116,930,692 € 86,733,351 €557,003,574 €643,736,925
Source: Prepared by the authors with data from the Spanish Ministry of Culture
Out of the €643 million collected by Spanish movie theaters, Spanish
films grossed only €86 million. That same year only 21.7% of all movies
shown in Spanish theatres were locally produced, while another 37.6%
came from the U.S. Quite the opposite for American films which earned
more than €435 million and gained 67.5% of the total box office in 2007
(see Table 2).
These results in the U.S. can be attributed to the release of numerous
installments of well-established franchises. The sequel-heavy schedule
resulted in the box office tally for the year being 5% higher than the
preceding year. However, according to the US Theatrical Market
Statistics Report, that same year ticket prices had been increased by 5%,
so in actuality, ticket sales only grew by 0.3%, selling a total of 200
million tickets which was still less then in 2006.
As a result, many producers work mainly on intuition to be
successful in order to deal with the industry competition (e.g. television,
piracy, and home theaters), failure, and the challenges of standardizing
projects. There has been an attempt to identify box-office predictors that
aid in selecting those projects with a higher likelihood of succeeding.
Nonetheless, film studios have not created a guaranteed system thus far.
Finding the exact elements of success is much more of an art than a
science.
53 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
Table 2: Market Shares of Movies Produced in Spain and the US in the
Spanish Film Market in 2007
Country Number
of
Movies
Percentage Viewers
(in
Millions)
Percentage Box
Office
Revues
(in
Millions)
Percentage
United
States
667 37.6 % 78.99 67.5 % 435.24 € 67.6 %
Spain 386 21.7 % 15.80 13.5 % 86,733 € 13.5 %
Other
Countries
1206 40.7 % 19.64 19% 96.29 € 18.9 %
Source: Prepared by the authors with data from the Spanish Ministry of Culture
Project Success
Movies are considered experience goods (Hirschmann & Holbrook, 1982;
Reddy et al., 1998). In this sense, when consumers go to the movie
theater they enter into a “purchase agreement” where the format is
known but the subject matter may not be (Reddy et al., 1998). A
conceptual model of success created by Reddy lists two factors in
determining success: information and objective characteristics (e.g. movie
genres and talent involved). Lack of knowledge about a particular movie
may lead the audience to search for additional information before making
a decision of whether or not to view the film (Chang & Ki, 2005). To
determine if they will enjoy the film, the search for clues takes into
account variables such as who the director is, which actors appear in the
film, whether the film is a sequel, and ratings of critics and audiences.
Potential viewers are also influenced by marketing strategies including
advertising and promotion of the film, the release date, number of
screens showing the film, or any awards bestowed upon the film (Chang
& Ki, 2005; Reddy et al., 1998).
Major studies confirm that quality perceived by critics is significant
when it comes to affecting the box office results of a film (Basuroy et al.,
2003; Eliashberg & Elberse, 2003; Litman, 1983; Litman, 1982; Litman
& Kohl, 1989; Ravid, 1999; Eliashberg & Sawhney, 1997; Sochay, 1994;
Wyatt, 1991). Some research points at the fact that the distinction
between art house and mainstream films is important when taking the
above elements into account. For instance, there is evidence that film
critics are a factor when it comes to influencing the success of art house
films, but only serve as predictors when it comes to mainstream films
(Gemser et al., 2006). Until recently few studies have assessed whether
the effect was directly a result of the audience being influenced by the
critics or actually a prediction of the film having some kind of broad
appeal that can be translated to the audience through word-of-mouth.
The evidence seems to point at the fact that an adequate combination
of different factors can give a film a good opening (which most time is
enough for a film to be considered a success). However, word of mouth is
54 Journal of Media Business Studies
considered to be crucial in giving the film “legs”—that is, making it
appealing to audiences over successive weeks, something that often
makes the difference between a success and a bona fide blockbuster. The
elements that give a film those legs are much harder to define, as they
have to do with notions of quality. Some recent examples include the
analysis of the relationship between the ratings in Yahoo Movies and box
office results (Liu, 2006). Recent studies have looked at the effect of word
of mouth on box office results, a phenomenon that’s been given a new
boost by new information technologies. Some recent examples include the
analysis of the relationship between the ratings in www.imdb.com and
Yahoo and offline opinions (Dellarocas et al., 2004) or Yahoo Movies and
box office results (Liu, 2006), both concluding that word of mouth plays a
significant role in box office results. It is worth noting that in this article
we have placed our focus more on the success of the film project
management than directly on the success of the film, and that a badly
managed project will more likely translate in difficulties in the success of
the film, but the success in project management will not be a guarantee
for a successful film.
Commercialism Vs. Art in the Film Industry
The success of a film is evaluated in several ways. One view point is
based on its commercial achievement, for example looking at the box
office revenues. Another assessment estimates its artistic merit or
industry praise through awards won such as an Oscar (Holbrook, 2007).
Firms focusing on commercial success use a “hit” strategy. One
practice employed by directors to produce a “blockbuster” is remaking an
already successful movie, or reusing an idea that has demonstrated
profitability (Martin, 1995). The film industry’s main focus concentrates
on short term results (i.e., box-office revenues for opening weekend).
Using its substantial production budget, the marketing campaign
concentrates efforts on promotion and mass distribution. To generate
buzz, films open on numerous screens at the same time (Holbrook, 2007).
With a few exceptions, the turnover of a “blockbuster” is very fast-paced
and can offer considerable returns. Typically audiences prefer fast paced
movies that have any combination of violence, sexual tension between
characters, and, of course, a happy ending (Martin, 1995). The reason
these mainstream films are so successful is that the average moviegoer
wants a “passive experience” rather than engaging in a film that requires
thought (Martin, 1995) and by entering into these films the spectator
implicitly knows what he or she will receive.
Film companies more inclined to produce artistic films could be
compared to the book publishing industry. These organizations tend to
consider long term strategies and emphasize building the careers of the
artists involved. Using the approach of securing a good environment in
which the filmmakers’ talent can flourish is vital. This strategy believes
that eventually one of the developed directors will sooner or later lead to
55 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
economic returns (Björkegren, 1993). Most European films are considered
more cultural than commercial resulting in niche audiences. These
films are usually shown at specialty theaters and rely on exposure
generated from “word-of-mouth” by audience members and reviews by
film critics.
Due to the structure of the industry, which relies heavily on public
funding, there are numerous companies that are willing to invest in new
talent. Obtaining a hit at the theaters is not as crucial to film makers,
since the costs of a film normally are covered with public or TV network
funding prior to the start of the production phase. As a consequence, the
Spanish film industry follows a path that differs from the hit or failure
strategy with big generic blockbusters in the way of Hollywood. It is
mostly based on a long-term strategy that tends to nourish directors in
the hopes that one will eventually turn into a well-known name with the
ability to attract audiences and become a stable provider of successes.
THE SPANISH FILM INDUSTRY
In the beginning of the 20th century, Spanish cinema was developing in
much the same manner as in the rest of Europe. Spanish filmmakers
struggled with the integration of their own national culture into artistic
and commercial films that could be distributed internationally. The seeds
for the current situation can be traced back to Franco’s dictatorship.
During this time, Spanish films, like the country itself, had their
freedoms and liberties repressed through censorship laws; which greatly
impacted the film industry both economically and culturally.
Although cinema, following the Civil War (1936-39), continued on
with themes of the past, it was apparent the films were glorifying the
values of the regime. The objective of these genres was to reassure
Spaniards that the country’s beliefs had not been altered despite the
Civil War (Higginbotham, 1988). The government’s notion of national
cinema was to show the country in a favorable manner by masking
poverty, political repression, and corruption in films (Higginbotham,
1988).
Throughout Franco’s reign censorship, ideological pressures, and
government subsidies were all central influences to controlling the
content produced, resulting in less viable Spanish films. Censorship
impacted cinema in three significant aspects: sex, politics, and religion.
Sex and criticism of the church and government was not allowed in films
(Seguin, 1995). Additionally, regional languages, such as Catalan and
Basque, were prohibited in films. Ironically, forcing Spanish as the only
language allowed on film screens had the unexpected outcome of placing
foreign films on an equal ground with Spanish films. Soon, dubbed
American films became very appealing to popular audiences since the
language barrier had been eliminated, allowing for better-made foreign
movies to gain a solid base in the Spanish market (Triana-Toribio, 2003).
56 Journal of Media Business Studies
Following Franco’s death in 1975 and the full repeal of censorship
laws in 1977, Spain underwent a period of political transition bringing
freedom of expression. This new liberty gave rise to audience expectations
and the desire to view adult content. Topics once considered taboo,
such as drugs, sex and homosexuality, as well as those related to politics
and religion, had now been opened up to film makers providing Spanish
production with a temporary boost. A majority of the productions
consisted of cheap exploitation films. This period became known as “el
destape”, a Spanish expression which alluded to the tendency of these
films to “include sexualized or soft-porn scenes” (Triana-Toribio, 2003).
After the initial burst due to the novelty factor, interest in these
exploitation films started to fade. The decline of the Spanish film
industry occurred due to the rise of television ownership in the 1970s
followed by the global recession of the early 1980s (Kogen, 2007).
With the average quality of Spanish films deteriorating, the new
Socialist government deemed the film industry insufficient for a modern
democratic country and in need of assistance. It was agreed that new
cinema should be created to reflect the modern national style (Triana-
Toribio, 2003). In 1983, renowned film director Pilar Miró was named
General Director of Cinematography to help revitalize the industry. Miró
fostered Spain’s productions by providing state aid for promising young
filmmakers. The public funding system, referred to as “Ley Miró” (Miró’s
Law), established subsidies for a small number of productions a year.
The hope was to create a cinema that would financially strengthen the
national film industry and achieve international fame. The funding was
allocated in the form of grants and based mainly on “artistic merit”, as
judged by a committee of experts (Triana-Toribio, 2003). This policy went
on during most of the 1980s, and had limited success in turning around
Spain’s film industry.
After a decade of functioning this way, signs started to show that for
all the prestige achieved by Spanish cinema, productions were not doing
as well domestically as could be wished for. In any case, Spanish
audiences rejected most of the cinema that was created for them through
the measures adopted in the post-Franco era (Triana-Toribio, 2003).
Critics of the legislation believed films produced during this time were
“director’s projects” not concerned with box-office results and unable to
equate with viewers. It became evident that box-office results were
essential to build a solid, self-sufficient industry. As a result, funding has
since been reorganized and films now need to achieve pre-specified
revenue levels at the box-office to qualify assistance.
Funding a Film in Spain
Funding a film project is an important aspect of the endeavor as
normally producing a new film requires massive amounts of money and
is wrought with high risks. It is common that a mix of funding sources
(e.g. loans, subsidies, financial partnerships) is used.
57 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
Being a cultural item, film making also attracts the interest of local
public administrations, which use the cultural edge to justify providing
subsidies or tax credits to attract movie investment to their areas and to
promote local industry. The original Empire State Film Production
Credit, passed in 2004, has had a profound positive effect on New York’s
economy (Spitzer, 2008). The French “cultural exception” to the global
free trade accord in 1994 is another textbook case as it states that France
could favor its movie, television and radio industries with subsidies and
minimize foreign competition through quotas. It is estimated that the
French pour $400 million into the movie industry every year (Riding,
2003).
Spanish governments have always thought it was imperative to have
a healthy film industry so that it can be used as a carrier of national
culture and identity. The decentralized structure of the public funding
system established a co-sharing of financial responsibility at the national
level, via the Institute of Cinema and Audio-Visual Arts (ICAA), and
regional level (Cultural Policy in Spain). Financed exclusively by
government funding, the ICAA promotes, regulates, and provides
financial backing to the Spanish film industry. Producers are offered
monetary assistance with production, distribution, and exhibition of
films. Regional authorities are autonomous communities with a strong
identity and a case in point is the Catalan Institute for the
Cinematographic Industry in Catalunya. In the case of Catalan films,
they can receive up to €200,000 per project, depending on different
elements of the film, such as location, language in which the film is shot,
technical and artistic team, and so on.
Lastly, at a broader level, Spanish film producers have access to the
Media Program designed by the European Union. The Media program
assists producers with project development. In the case the original
project does not reach completion, it is re-invested into another project.
The Importance of Agreements with TV Networks
Besides government subsidies, the backing of Spanish cinema, 80%,
depends on co-financing agreements with television stations (Gladstone,
1999). Since 2005, TV networks have been forced by law to re-invest 5%
of their total income into funding films, as is the case in many other
countries. Little risk is left at the box-office with production costs already
covered by a combination of public funding and TV programming rights.
However, since television broadcasts are usually part of the deal, TV
stations expect films to attract mass audiences. Thinking of television
viewers is sometimes even more important when it comes to selling the
film, as channels are less likely to fund projects with low popular
interest, given the consequence would be low ratings for the channel.
58 Journal of Media Business Studies
PROJECT MANAGEMENT APPROACHES TO
UNCERTAINTY
Due to the global evolution towards an information and knowledge-based
economy, project-based businesses are becoming increasingly common
(Kodama, 2006). However, uncertainty accompanies each part of a
project in its phases and outcome. Producers understand that risks can
have a positive or negative effect on the film and therefore they try in
advance to identify, assess, and manage those factors (De Meyer et al.
2002).
The movie-making project evolves along a series of stable, wellknown
phases, as von Rimscha says (this issue). With each phase of a
movie mapped out, it helps to identify where uncertainty may lie.
There is a generalized consensus that the movie industry is
inherently risky (De Vany, 1999). Literature reviewed points to demand
as the greatest uncertainty faced by film studios. “Although estimates
vary, industry observers put the average cost of making a movie a little
over above $50m, with cost rising at an annual compound rate of nearly
10 percent, significantly above the rate of inflation. Furthermore, of the
480 or more movies made each year, 60-70 percent of them do not recover
the initial investment” (Watson, 2004, p.403).
However, we have not found in the literature any analysis of the
different types of uncertainty faced in the making of a movie and how
understanding the various types of uncertainty can help the producer
adapt. De Meyer and co-authors. (2002) provide what we have found to
be a useful framework to map uncertainty and describe the most
appropriate managerial adaptations already proved useful in other
project-based industries. The authors recognize that “there are different
types of uncertainty, each of which requires a different management
approach” and that as managers move from certainty to chaos, they must
adapt from textbook approaches of project management towards
approaches that allow for the vision to change.
Following De Meyer and co-authors (2002), we do not treat
uncertainty and risk as two different issues. Rather we integrate them
into a single framework, moving from certainty on one end, where
managers know exactly what will happen and in what amounts, to: (a)
variations, where the project plan is stable, and managers know what
will happen but schedules and budget will likely vary from their
estimated values to (b) foreseen uncertainty, where managers are aware
of events that may or may not occur, due to identifiable and understood
influences to (c) unforeseen uncertainty, where managers are not able to
identify the events that may occur to (d) chaos, on the other end, where
even the basic structure of the project is uncertain.
It is widely accepted that the textbook project management
techniques do not apply to most real-life projects (Goldratt, 1997), and
uncertainty is said to be one of the most important gaps. The greater the
uncertainty that exists in a project, the more the team will have to
59 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
redefine the activities, or even the whole structure of the project in
midcourse. Producers can benefit from knowing the uncertainty profile of
their projects, and how the profile changes along the project life cycle.
The uncertainty profile of a project includes estimating how much of each
of the four types of uncertainties (a) to (d) (defined above) is the project
likely to experience. Further, the managers could estimate how the
profile will change during the course of a project. A chart similar to the
one below (Figure 1) could be representative of a general movie project.
Hence, for a certain movie project one can establish a typical risk profile
of an action movie or comedy that does not contain a high degree of
special effects. Films with high special effects or animated films have a
different risk profile. In this research, we are focusing exclusively on
films with a risk profile as shown in the Figure 1.
Project management approaches vary according to the uncertainty
presented. Described below are the different profiles:
A) For variation uncertainty, the role of the producer is to ensure
that the project plan incorporates buffers to deal with the estimated
variation and then ensure a disciplined execution. Appropriate buffers
for cost, time or resource variation are needed. Time buffers must be
Figure 1: Uncertainty Profiles of the Different Phases of a Motion Picture
Project
1. Development 2. Pre-production 3. Production 4. Post-production 5. Marketing and
distribution
6. Exhibition
Uncertainty Level
Project Phases
Variation Foreseen uncertainty Unforeseen uncertainty Chaos
60 Journal of Media Business Studies
conveniently located at strategic points at the end and around the
critical chain (Newbold, 1998; Leach 2000). Control limits must be
established to determine what an acceptable variation is and when
the managers need to take corrective action. During execution,
monitoring the use of buffers is a very simple but very effective tool.
B) For foreseen uncertainty, the role of the producer is to identify
risks, develop a set of scenarios and anticipate alternative paths to
achieve the project objectives. The scenario planning has been
applied to a variety of subjects. It was originally developed as a
method of military planning after WW II and soon moved to the
business field. It is claimed to have helped Shell to move from one of
the weakest of the seven large oil companies that existed before the
Yom Kippur war in 1973 and the subsequent oil price shock to the
second in size and first in profitability (Daum, 2001).
The use of decision trees, identifying decision nodes and chance
nodes would allow managers to plan contingent actions in each
scenario, allowing the list of risks and the analysis of the set of
scenarios to be shared with other project stakeholders.
During execution, the manager must maintain awareness for
changes in environment and identify the occurrence of foreseen risks
to trigger contingencies. In managing the relationships, the producer
should inform and motivate other stakeholders to accept and cope
with the planned contingencies.
C) For unforeseen uncertainty, the role of the producer is that of a
flexible orchestrator, modifying targets and execution methods. In
the planning stages, the managers must accept the iterative nature
of the plans, and be ready to solve new problems and change even the
structure of the project. It is in this stage that managing
relationships becomes more important than with previous
uncertainties, as he will need to mobilize new partners in response to
the new challenges that will appear in the project.
During execution, the producer will have to continuously scan the
environment to detect early signs on unanticipated influences and
maintain a fluid communication and develop mutually beneficial
dependencies with the stakeholders.
D) For chaos, the producer and the project team must continuously
and repeatedly redefine the project to be able to achieve the most
favorable outcome within the developing situations. When managing
a project on this context, the managers must build long term
relationships with other stakeholders and strive for partnerships,
rather than contractual agreements.
The managers must iterate and redefine the goals of the project,
minimizing negative consequences and leveraging results on the
basis of learning.
61 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
RISK PROJECT MANAGEMENT IN FILM PRACTICE
The main objective of this research is to evaluate the impact of different
organizational approaches to risk management and the concrete actions
reducing the perceived risk impact on the final success of managing a
movie project. Since very little is known about the impact of risk project
management on film making, a qualitative research method was chosen,
focusing on an in-depth study of three cases. The method has made it
possible to examine the why and how of decision making beside the what,
where, and when (Bailey, 1987; Yin, 1993). The case method has been
used widely in the study of film and media project, since it allows
shedding light on some industry specific aspects that under the current
state of research would be difficult to examine through quantitative
approaches. In addition, in order to gain a full understanding of the topic
a variety of data-generating methods was utilized. Beside in-depth
interviews, data collection was complemented with the analysis of
secondary information from books and articles specific to filmmakers and
productions. Our main aim has been to validate the scheme derived from
the initial literature analysis.
The main source of empirical evidence has been extensive interviews
conducted with film producers. Company documents, press clippings, and
primary-source literature were also examined. Secondary information,
including books and articles on the film industry, both in general terms
and specific to Spain, project success, and commercial vs. art productions,
were all used for insights and empirical evidence to draw our
conclusions. Details about the full range of data collected for each of the
three films are shown in Table 3.
To choose the movies, we used a purposive sampling strategy,
selecting movies with different box office success rates, since we wanted
to be able to analyze what type of actions and organizational structures
could have an impact—positive or negative—over the final box office
results.
The analysis of the data was done by specifically looking at the
criteria that drive the different stages of project selection and production.
By applying a general project risk framework, our analysis shows the
different ways the film is created, how the producer could assess the risk
through each phase, and the impact this has had on the final outcome.
THE CASES
Case A. A Commercial Success: El Orfanato (The Orphanage)
The first case studied is that of El Orfanato, produced by Rodar & Rodar.
Rodar & Rodar is a good example of portfolio management (Picard, 2005).
Rodar has three branches in its structure: advertising, television and
motion picture, and a screenwriter’s school (Taller de Guionistas).
According to Joaquín Padró, the firm’s president, the screenwriter’s
62 Journal of Media Business Studies
Table 3. Data Sources
CASE A
El Orfanto
(The Orphanage)
CASE B
53 Días de Invierno
(53 Days of Winter)
CASE C
La Leyenda del Tiempo
(The Legend of Time)
3 Semi-structured interviews
with producer (Joaquín
Padró) and assistants
2 Semi-structured interviews
with producer (Antoni Camín)
and assistants
2 Semi-structured interviews
with producer (Paco Poch)
and assistants
Onsite visits Onsite visits Onsite visits
Company press archive Company press archive
Local and international press
clippings
Local and international press
clippings
Local and international press
clippings
Box office results Box office results Box office results
school also serves as an additional function of Research & Development,
where new ideas can be toyed with by fresh talent. It offers the promise
of a potential contract if the project is interesting enough and considered
suitable for investment; it is a “win-win” situation for both the
organization and the students.
A number of the company’s projects have been conceived at the
school; however, “El Orfanato” was not among them. The script was
brought to them by José Antonio Bayona, a filmmaker that started his
career producing music videos and later moved into commercials,
collaborating with Rodar. The “green light” for the project came after
approaching Rodar, where the producers were convinced of Bayona’s
potential as a filmmaker. According to the producer himself, they hoped
the project would work, as they do with every film they produce, but were
not aware that they had a blockbuster on their hands.
The professional network established early on by Bayona allowed for
“El Orfanato’s” conception and success. It was set into motion by a
fortuitous meeting with Guillermo del Toro, who was presenting his first
feature film “Cronos” at Sitges Fantastic Cinema Festival. Bayona,
attending the event as a film enthusiast, spotted the talent in del Toro’s
movie and spoke with the director to congratulate him. Hollywood
agreed, as del Toro’s next project would be the Hollywood horror
blockbuster. A few years later at yet another film festival, Bayona
encountered Sergio G. Sánchez, who wrote “El Orfanato”. The friendship
they formed led to discussing projects and specifically the script. All
these steps were crucial in forming the right combination so the project
would become the highest-grossing Spanish-language film of all time to
be shown in Spain.
While del Toro moved on with his career, Bayona kept in touch with
him and by the time Bayona asked for his support with the film, del Toro
was already a household name. His latest project “Pan’s Labyrinth” had
won 4 Academy Awards. Everyone was looking forward to his new
undertaking and his credit as executive producer of Bayona’s film made
“El Orfanato” the next best thing.
63 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
The subsequent piece now was to sign popular Spanish actress Belén
Rueda to the film. Working almost exclusively with Spanish television
channel Telecinco, she was already famous for her different roles in
many prime-time TV shows. Rueda was impressed by Sánchez’s script
and after meeting the team signed on for the film. Recognizing the
opportunity, Telecinco fulfilled the expectations by co-producing the
motion picture starring its famed actress and backed by a prestigious
filmmaker as del Toro.
In order to visualize the movie, thousands of sketches and story
boards were designed even before any filming began. Bayona said the
degree of precision was demonstrated when the “entire set was
reproduced in the form of a three-dimensional graph in which the
cameraman could position the camera before arriving on set, allowing for
the creation of the most complex sequences to be shot”. The only concern
encountered pertained to additional money spent on costumes and extra
time filming; however, Bayona had expected this and had made
adjustments to the budget.
The production concluded smoothly, thanks to the professionalism of
the team and the extra degree of commitment which came from Bayona’s
strength as a leader and his friendship ties with his team. Also, for most
of the team it was their first feature film, and therefore a possible to
break into a very competitive industry, so they all shared a special
interest in wanting the film to be a success.
The premiere screenings at Berlin, where distributor Wild Bunch
picked up the project for international distribution, signalled the success
which were to come once the film was released. Prior to the showing,
Telecinco pulled out all the stops in promoting the film with commercials
being shown on its channels. This gave the film an exposure that very
few Spanish films have had access to.
All these elements combined contributed to the film having an
extraordinary opening weekend, grossing 5.9 million Euros after only
four days of exhibition. The film was also well received by both critics
and audiences, (the film gets a 7.8 rating on IMDB, 3’5 stars on the user
comments at Yahoo.es) that could be interpreted as a reflection of the
positive word of mouth that would give the film its “legs”. The film stood
at the number one position for 6 weeks and went on to gross over €25
million (the next other big films of the year, “Pirates of the Caribbean: At
The End of the World” and “Shrek 3” made €22,77 and €22,06 million
respectively) becoming the largest grossing Spanish produced film since
“Los Otros” (The Others).
Case B. The Mixed Model—Balancing Commercial and Artistic
Considerations: 53 Días de Invierno (53 Days of Winter)
The second case is that of 53 “Days of Winter”, produced by OVIDEO.
OVIDEO’s business structure is similar to Rodar & Rodar’s, with three
different production areas: advertising, television, and filmmaking.
64 Journal of Media Business Studies
OVIEDO has locations in Barcelona, Madrid, and Lisbon; with sales,
management, production, and post-production teams on each site. They
have exclusive agreements as well as hire well-known film directors
trying to offer the widest range of possibilities to potential clients. TV
projects are commissioned by networks in a similar way and are less
risky endeavors than movie projects.
Feature films are a higher risk, but the benefits also have the
potential to be so (even if that is not often the case). According to
executive producer Antoni Camín, “The risk in our role is that of
developing projects, a lot of investment is made on creating projects
which might never get sold. OVIDEO maybe investing in ten projects, up
to €600,000 in development, and then out of those only two or three will
be produced”. In some situations more money maybe invested in certain
projects and less in others. Unless there is a clear future for a project,
funding may come to a halt. In any case, a business structure is required
to handle the different sources of income. For instance, some films do not
get money from state subsidies until two years after completion;
therefore money needs to be financed in advance.
Hence, advertising and TV branches contribute to a certain degree of
stability and provide a solid enough structure that reassures the state
and allows the continuance of public funding, aiming to fulfill the
objective of producing a film. Access to subsidies is a crucial factor and
remains vital for the feature film production branch of OVIDEO in order
to survive. To “keep the machine running”, according to Camín, the
company tries to produce about two films a year, which he describes as
“auteur films, movies about feelings, mostly dramas”. As of January 2008
the company had 4 films in the “project” stage; two of them being
thrillers, one dramatic comedy, and one drama. Therefore, although the
genre component does not necessarily contradict Camín’s words, the fact
remains that their productions are also inscribed to some extent in
generic conventions, allowing us to think of a mixed model.
In the case of “53 Days of Winter”, it was filmmaker Judith Colell
who contacted the company with the script by writer Gemma Ventura.
Both had been working together for years, having built the symbiotic
writer-director relationship. Colell’s reputation and previous work with
OVIDEO were crucial in the firm’s decision to produce the film. Since
they do not accept unsolicited scripts, OVIDEO only works with people
they have dealt with previously or those recommended. From there, they
work in establishing their own strong relationship of trust.
After signing the deal with the production company, the project
changed quite a bit during the development stage. It started with the
name “The Four Seasons” and transformed into “53 Days of Winter”. The
title was not the only modification; the script underwent changes as well.
The film opens with three people waiting for the bus while looking on as
a dog is abandoned. Mila is a teacher who took a leave of absence after
having been attacked by one of her students. Celso is struggling to keep
together his marriage and his job as he tries to make ends meet. He is
65 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
fired for stealing a necklace for his wife; unable to tell her he takes to the
streets. The last character Valeria is a cello student whose relationship
with her teacher falls apart. The final screenplay reveals these three
characters on a journey to confront their fears and frustration with each
of them about to make a life-changing decision.
The executive producer thought the project could be summed up as a
success:
It has achieved the expectations. Its budget was €2 million, it grossed
€3 million and remained in movie theatres for 5 or 6 weeks (which is
more than the average for a Spanish film). It retrieved its production
costs and received a good critical reception and nominations for a few
awards. We are happy.
Case C. Falling Behind Initial Expectations: La Leyenda Del Tiempo
(The Legend of Time)
The third case relates to a film that did not meet the initial expectations
set by both the producer and the director. After two short films and one
feature film, producer Paco Poch and director/writer Isaki Lacuesta
decided to collaborate on “La Leyenda Del Tiempo”. The two had met
when Poch presented a lecture on making documentaries to Lacuesta’s
class at Pompeu Fabra University in Barcelona. Poch was already a well
known film producer who had created extremely innovative
documentaries such as “Gaudí” and “Innisfree”. It was Lacuesta who
approached Poch soliciting aid with the production of his first
documentary. Poch found the idea appealing and begun searching for
ways in which he could assist to turn the project, called “Cravan vs
Cravan”, into a film.
“Cravan vs Cravan” was released in 2002 and by 2005 the Spanish
Ministry of Culture registered a total gross of €16,413 for the film.
Despite the low earnings, the film had received many awards, such as
the Gran Angular Best Film at the Catalonian International Film
Festival and the prestigious Sant Jordi award for Best Film. Even
though their film making style did not fit into the mainstream, both men
had decided to partner again and make two more short films. Poch had
faith in Lacuesta’s talent though none of his previous films had become
“hits” but rather pieces of art. (Poch mentions Iranian Abbas Kiarostami
or Béla Tarr as his favorite film makers, who both could hardly be
described as “commercial”).
Following the film’s release and distribution, its director and
producer started exploring topics for the next project. The development of
“La Leyenda Del Tiempo” was born out of the personal interest of its
director, Isaki Lacuesta. He had been on holiday in San Fernando, the
island where the famous flamenco singer Camarón de la Isla had been
born. Lacuesta became fascinated by the lives of the people in the area
and the presence of so many Japanese expatriates who had arrived in
66 Journal of Media Business Studies
Cadiz to study flamenco. All these elements had combined to form the
inspiration for the storyline of “La Leyenda Del Tiempo” where a reunion
of the band would play with the singer to re-interpret the title song of the
film as the centerpiece. The narrative revolved around two characters,
one a gypsy boy who stops singing whilst morning his father’s death and
a Japanese teenager who, captivated by the figure of Camarón, travels to
Cadiz to learn to sing.
Poch was fond of Lacuesta’s proposal for the latest endeavor. He was
convinced of Lacuesta’s talent and had proven he could lead a project.
The film was indeed a risky one since the design was a peculiar mixture
of fiction and documentary. He decided to only follow the 10-page
declaration of intent. Poch felt this style of film making would allow for
the truth of the characters to be revealed through improvised situations.
Poch didn’t expect it to become a massive hit but thought since Camarón
was the central subject and such a well-loved figure, the movie could
reach a wider audience than their first project.
The budget for the film was set at €590,000. With a name like
Camarón attached to the project and the good reputation of Poch as
producer of quality films, the project managed to gain the support of
Televisión Española. The station bought the broadcasting rights for the
film for €135,000, becoming the main funder of the film. Another station,
TV3, also invested €60,000 into the project. The rest of the financing
came from private investors and public subsidies of Spanish, Catalan,
and Andalucía governments.
The film experienced serious problems from the onset. The most
critical predicament was the conflict with the Camarón family. Without
the knowledge of Lacuesta and Poch, another film company had already
started working on a biographical film about Camarón de la Isla. When
Poch and Lacuesta approached the Camarón family to ask for permission
to use Camarón’s image in the film, they found out the family had
already granted exclusive film rights of the artist to the other firm.
Therefore, Poch and Lacuesta were denied the rights to use any material
that the family had rights over and prohibited the use of the artist’s
name to promote the film in any way. According to Poch, this was a
significant blow to the commercial appeal of the film, which relied
heavily on the central presence of Camarón.
Poch considered abandoning or putting the project on hold. This
could have put the funding in jeopardy, since the project had changed
substantially when compared to the original proposal approved by the
investors. However, after a crucial meeting, Televisión Española decided
to move forward with the project, partly thanks to the reputation of Poch
as a producer. The film, originally conceived as a three part structure,
now had to be reduced to only two. Without the most commercially
appealing segment, which was suppose to feature some very popular
Spanish singers such as Kiko Veneno or Tomatito, who had been the
guitarist of Camarón, the focus of the film switched from the filming of
67 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
the Camarón tribute reunion to the stories of the boy and the Japanese
girl.
Another problem that the production had during the making of the
film was that the industrial partner who agreed to provide technical
support backed out one week before filming. Another provider was found
but at a higher price and left the project’s budget without enough money
to spend on advertising. When the film was finally released in Spain, it
only brought in €27,712 . Yet the film received excellent reviews from
specialized and mainstream press and won the Jury Prize and the Best
Actor award at the Las Palmas de Gran Canaria film festival.
Poch said he was happy with the film and its results. He
acknowledged the problems with Camarón’s estate which damaged the
film’s commercial viability, changed the funding, and led to one of the
partners backing out. The end result was the film’s inability to recoup
approximately €100,000 of production costs. However, as of 2008 he
expected the film to be release in France and Japan, by putting together
the revenues from the foreign theatrical and DVD releases, which should
prompt TV sales in those countries as well, the rest of the money would
be recouped. In the meantime, Poch was already planning the production
of the next Lacuesta project, based on the story of a Vermeer
counterfeiter, the first collaboration of the producer-director tandem in a
strictly fictional film.
ANALYSIS AND INTERPRETATION OF RESULTS
In the light of the uncertainty profile described in section 3 above, we
could identify examples of each level throughout the project stages. We
have labeled each uncertainty event as either a positive or negative
consequence for the production. We refer to these uncertainty events by a
letter in this section and correspondingly in Tables 4, 5 and 6. The table
shows that a project has more chances of success if the producer is able to
constrain the uncertainty to situations of variation or foreseen
uncertainty. In situations where the producer is pushed to unforeseen
uncertainty or chaos, even when the result of the event turns out to be
positive, it may decrease the likelihood of success.
Following are a few examples of the uncertainties identified in the
three cases.
The example illustrating variation (referred to as a. in Table 4,)
taken from Case A. Bayona, visualized the film in advance using story
boards. It was therefore able to make adjustments to the budget and
timeline before filming began. In order to create the look desired, he
doubled the budget allocation for costumes and allowed for additional
time to film, so when it actually became needed, the budget was
available.
68 Journal of Media Business Studies
Table 4: Positive and Negative Effects of Uncertainty Levels for CASE A: El
Orfanato
Development Pre-
Production
Production Post-
Production
Marketing
&
Distribution
Exhibition
Variation a. +
Foreseen b. + b. + b. +
Unforseen d. +
Chaos
Table 5: Positive and Negative Effects of Uncertainty Levels for CASE B: 53
Días de Invierno
Development Pre-
Production
Production Post-
Production
Marketing
&
Distribution
Exhibition
Variation
Foreseen c. + c. + c. +
Unforseen
Chaos
Table 6: Positive and Negative Effects of Uncertainty Levels for CASE C: La
Leyenda Del Tiempo
Development Pre-
Production
Production Post-
Production
Marketing
&
Distribution
Exhibition
Variation
Foreseen
Unforseen e. – e. – e. – e. +
Chaos f. –
Case A has many examples of foreseen uncertainty (referred to as b.
in Table 4) resulting in positive outcomes in the development, preproduction,
and marketing/distribution stages. From the outset, Bayona
was able to identify and address many risks associated to the project by
envisioning the film prior to production. Everything from the creation of
thousands of sketches and story board design ideas to the detail of where
the camera would be positioned was prepared before filming even had
begun. Since Bayona worked with most of these people on short films and
commercials, he had previous knowledge about the way the team would
collaborate. He knew by selecting a team with limited experience on film
making he would get new perspectives and create a sense of excitement
and camaraderie on the set during production. Additionally, he
understood the significance of having del Toro’s support for the
production as well as having his name on the film. Bayona foresaw the
importance of quality casting and selected a talented group including the
69 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
famous actress Belén Rueda. He also recognized the opportunity of
having Telecinco (Spanish TV channel) financially on board, promoting
the film, as evidenced by signing their star TV actress. Bayona knew
early on in his career that by establishing and managing all these
relationships his project would come to fruition.
Another example of foreseen uncertainty (referred to as c. in Table 5)
is demonstrated in Case B with changes occurring in the development
and pre-production phases. Although the script and title were both
altered, these were expected changes often made in film projects early,
helping the producer to visualize the film; therefore they did not have a
negative impact on the project. Any changes in title or script made after
this phase would be viewed as unforeseen since storyboards had already
been created, costumes made, budget finalized, and market prospects
and audiences already in mind, etc. As far as the exhibition of the film
(referred to as c. in Table 5) is concerned, it could be classified under this
category as well, since, according to its director, the film “achieved
expectations” and received “good critical reception and nominations for a
few awards.”
An example of unforeseen uncertainty (referred to as d. in Table 4)
with a positive outcome comes from Case A. The magnitude of success for
the film was unexpected. The team believed in the script and was happy
with the results of the edited film but did not realize that the movie
would become a “blockbuster”. However, looking at how they had
managed uncertainties of the previous stages, one can conclude that the
film’s final positive outcome has been due to a good management of
variations due to the producer’s ability to foresee other uncertainties,
and manage them successfully.
Case C exemplifies unforeseen uncertainty (referred to as e. in Table
6) from the beginning of development through to exhibition but in a
negative connotation. Lacuesta truly believed in this film and wanted to
pay homage to the legendary flamenco singer. He knew that this would
be welcomed by the family, but he was unable to anticipate the rights to
the artist being sold to a different firm. The consequence of the
unanticipated competition forced him to alter the structure of the project
from three parts to two, removing the most commercially appealing
segments. Another unpredicted event took place when one of the
partners pulled out of production accelerating the costs which eventually
resulted in a necessary decrease in marketing expenditures. Although
the events occurring up to this point had been negative, the exhibition
was still considered a positive unforeseen. The film was expected to
recoup the lost funds through its release in France, Japan, and on DVD.
If Lacuesta had built a stronger team, he might have been able to use
them as resources as offset unexpected problems.
Lastly, chaos (referred to as f. in Table 6) is shown in Case C when
Lacuesta insisted on working without a screen play and used only a ten
page declaration of intent. This led him to continuously alter the filming
in order to capture the “true character”. An example of following the
70 Journal of Media Business Studies
“true character” is the inclusion of sorrow since Lacuesta had no idea the
boys’ real father had died. It was not until filming began that the theme
of mourning became apparent. It was not part of any preconceived plan.
He said, “I had imagined La Leyenda as a rather happier film”. Lacuesta
said his preference was for “imperfect films”, films that are always “en
camino” (progressing to the next level). In retrospect, the director said:
“As a means for making a film, this might not be the best method. But as
a means of making cinema, it’s the better route”.
The patterns of uncertainty in variation or foreseen with positive
results allowed the film to succeed. This is true of Case A, where Bayona
identified the risks before production and plotted out different scenarios
all the way to where the camera would be placed. He spent more time
upfront on the planning so that when the time came to shoot the movie,
it was an easy process with all the steps already laid out. The focus on
detail in the development phase alleviated any risk and contributed to
the movie’s success. Even Case B is considered an overall success, though
it was not a blockbuster. The producer and screenwriter ironed out all
the changes in the script before the production had begunn. Therefore, if
producers approach uncertainty by managing to move it to the variation
and foreseen profile areas, the project has a high probability of success.
When a producer—due to really unforeseeable events or to a lack of
effort to foresee them—has to face events in the unforeseen or chaos
area, with positive or negative results, likelihood for failure increases.
Case C is a clear example of this tendency, even though the producer
may prefer to call it “imperfect artistic cinema”. By allowing the
development stage to begin in chaos, it allowed for the rest of the
production to move in the unforeseen direction. Since the producer did
not plan ahead, he was forced to alter his script after production had
begun. He even changed the feel of the movie and incorporated the boy’s
refusal to sing to mourn his father based on real life events of the
character. The one unforeseen positive event was that the film would be
released in France and Japan. However, it still did alleviate the problems
the project endured due to a lack of risk preparation. It might have
turned into a “blockbuster”, if Lacuesta had gone to the family first and
obtained the movie rights. Even if the rights had already been sold, he
would have known in advance and been able to plan a different storyline,
or at least escaped the difficult position that forced him to compromise
funding.
Producers need to take the time in the earlier stages and plan out
steps. They need to avoid unforeseen and chaos especially in the early
stages since it sets the tone for the rest of the project. It is easier to deal
with uncertainty at the variation or foreseen level since producers have
thought about the risks and have solutions, buffers or contingency plans
for the different scenarios.
71 Ribera and Sieber—Uncertainty and Risk in Spanish Film Production
CONCLUSIONS
Like all other media industries, the inner workings and processes of the
motion picture industry is perhaps more dependent on environment than
believed. Motion picture firms have been operating on a project-based
environment since the rise of the independent film production. Without
theory to support them, they have instinctively been accustomed to
identifying risks and opportunities.
There is a widespread notion that all producers would like to achieve
both critical and commercial recognition for their films. But actually this
is not always the case. It is easier to understand the producers’ aim as a
continuum between artistic and commercial and artistic success, with
actually few producers aiming for a perfect balance between the two
(they might get success in both fields afterwards, but that is actually
seen more as a bonus).
It falls on the producer to take on the role of leadership by organizing
and protecting the creative idiosyncrasy of the projects. An exceptionally
successful Spanish film, Case A, is an example of the time taken in
advance to assess and evaluate risk. Even Case B, an average Spanish
film production, managed its risks and achieved success. However, Case
C shows what happens to a project when there are weaknesses in the
development stage and continues to plague the rest of the film
production. Generally, the results of our analysis seem to indicate that it
is extremely important that, without putting too many constraints on the
creative process, already known project management techniques are also
adopted for the management of a movie project. In this sense, especial
care should be devoted to the initial planning stages, calibrating the
outcome of each of the milestones and eventually pre-defining possible
actions to be taken in case of positive or negative events, since these
actions will have a significant impact in achieving the final expected box
office results. In this sense, the paper provides limited but still
significant evidence that the framework presented for understanding and
managing risks in film making can be of value to producers.
Acknowledgements: The authors would like to thank Lisa Narrell and Lluis Ruscalleda,
research assistants at IESE, for their extensive support in the preparation of this paper.
We also appreciate the suggestions and comments of the participants of the JOMBS
workshop in Jönköping, Sweden, September 2008.
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