Studio heads roll...and the brand plays on

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A year ago, Marc Shmuger and David Linde were riding high as the heads of Universal, in the middle of what was to become the most profitable year in the studio’s history, presiding over a two year string of hits that included ‘Mamma Mia!,’ ‘The Bourne Ultimatum,’ ‘Wanted’ and ‘Knocked Up.’ Today they’re licking their wounds, having been ousted after months of bad buzz about studio infighting and weak, inconsistent leadership.

Shmuger and Linde seemed like a intriguing choice when Ron Meyer teamed them up in early 2006 to take over as heads of Universal after Stacey Snider left to join Steven Spielberg at DreamWorks. Snider was in many ways the prototype of a modern-day studio chief -- great with talent, blessed with smart commercial instincts, media-friendly and business-savvy -- so she left big shoes to fill. Shmuger had been the studio’s brainy marketing chief while Linde had been running Focus Features, where he had developed a real mastery of the international marketplace, the biggest growth area in today’s studio businesses.

But even though they had a lot of early success, the duo never built a loyal following, either inside or outside the company. Disgruntled insiders felt Shmuger never developed a consistent strategy for what kind of movies the studio should be making. Outsiders complained that the executives, in particular Shmuger, also had poor people skills in dealing with the demands of top talent. So they’re out, replaced by Adam Fogelson, who is now studio chairman, and Donna Langley, who will be the studio co-chairman, while still retaining her old job as head of production.

What’s fascinating to me is that even as Universal is totally revamping its executive team and Disney has named a successor to studio chief Dick Cook, who was abruptly fired two weeks ago, no one seems to have given much thought to the complex array of skill sets needed to run a contemporary movie studio.

Until a decade or so ago, it was pretty easy to identify what it took to run a movie studio. The best executives had the same kinds of skills -- they were movie pickers. They could identify a good script, figure out the kind of talent who should star in it and hire the right filmmaker to make it, all the while having a relatively good grasp of its commercial potential. But studios aren’t movie-idea incubators anymore. They’re brand businesses, always on the lookout for a project that can be transformed into a franchise that not only has worldwide appeal but -- even more crucially -- can be duplicated over and over in sequel form.

Now that they are so dependent on the franchise business, studios need leaders with a skill set that is something closer to an advertising brand manager. It’s hardly a surprise that Disney, which is now largely a collection of identifiable brands (Pixar, Bruckheimer, DreamWorks and Marvel) has replaced Cook with Disney Channels chief Rich Ross, who has overseen the creation of such successful young teen brands as ‘High School Musical’ and ‘Hannah Montana.’

With rare exceptions (meaning Johnny Depp in ‘Pirates of the Caribbean’) the movies that have been the biggest profit centers for studios in recent years, such as ‘Harry Potter,’ ‘Transformers,’ ‘Batman,’ ‘Spider-Man’ and ‘X-Men,’ are films that rely more on our collective pop-culture subconscious than any individual movie star or creative talent. Even as recently as four or five years ago, you’d measure the value of a studio chief by his or her relationships, either with A-list stars or the top writer-directors in town who could supply ready-to-shoot, talent-friendly scripts. But at today’s studios, the real payoff comes from acquiring a new, well-known pop-culture brand, a brand with the kind of kinetic energy that appeals to moviegoers who speak different languages and live in all sorts of different cultures.

The big movie brands no longer depend on top talent. It hardly mattered who was cast in ‘Harry Potter’ or ‘Transformers’ or ‘Spider-Man.’ The character, already clearly a part of the pop-culture firmament, was the star, not the actor. The same goes for the filmmaker, as the evolution of ‘Harry Potter’ has proved, with the various installments all padding Warners’ deep pockets, regardless of whether a real auteur -- like Alfonso Cuarón -- or a journeyman director was at the helm.

This emphasis on brand management has led many corporate chiefs to hire marketers to run their studios. Dick Cook came out of marketing, as did his lieutenant, Oren Aviv, Disney’s current head of production. Shmuger had been in marketing for years; the same goes for his replacement, Adam Fogelson, who’s been the studio’s head of marketing and distribution. Rob Moore, now Paramount’s vice chairman and a major force in all of the studio’s strategic moves, had also been overseeing the studio’s marketing before assuming a larger role in production.

Most studios make essentially safe, traditional top executive hiring choices because out-of-the-box thinking has so often backfired. At Paramount, studio chief Brad Grey made two unconventional picks for the studio’s job of production chief, both of which were disasters. His first choice was Gail Berman, a TV executive; his second was John Lesher, a former talent agent who’d run Paramount Vantage. Both were branded arrogant and uncommunicative, although if they’d managed to create a couple of new franchises, it’s possible the lack of people skills would’ve been overlooked.

People skills still count, since every studio still has to make a few talent-dependent films to fill up the slots in its slate between the franchise tentpoles. As everyone who runs a studio discovers sooner or later, Hollywood remains an irrational business that can’t always be reduced to charts and graphs. So movies still get made based on hunches and emotional responses that don’t show up on a profit and loss statement. But as the Universal chiefs discovered, if you make too many high-minded films that don’t make money (‘Duplicity,’ ‘State of Play,’ ‘The Express’) and too many talent-based hunches that don’t pay off (‘Brüno’ and ‘Funny People’) without creating some mega brands along the way, you will be out on your butt, wondering why your phone has stopped ringing.

It’s interesting to note that if you ask a dozen industry insiders -- as I did in the past week, pondering the coming changes at Universal -- to name their model for a great modern-day studio executive, the consensus pick was someone who’s already left the movie business behind. Nearly everyone’s favorite executive is Peter Rice, who helped make Fox Searchlight the most successful specialty division of its era. A favorite of News Corp. chief Rupert Murdoch, Rice normally would have been in line to run 20th Century Fox. But with a pair of talented executives already at the Fox helm, having provided years of consistent profits and steady leadership, Murdoch decided to install Rice as head of Fox’s TV division, figuring that if Rice could make Searchlight a winner at a time when nearly every other specialty division was foundering, then why not let him have a shot at running his TV business at a time when the TV industry was in the midst of a similarly wrenching sea change.

Even though Rice has moved on from the movie business, I’d argue that his approach remains a model for any studio looking for top leadership today. Rice had a keen eye for talent -- as a young production exec at Fox he was the first to champion Baz Luhrmann’s groundbreaking ‘Romeo + Juliet.’ But he was also the first specialty division chief to realize that specialty divisions needed to be in the brand business too. It was simply a different kind of branding. At Searchlight, the brand wasn’t action comic superheroes, it was a series of brash, idiosyncratic comedies (such as ‘Napoleon Dynamite,’ ‘Sideways,’ ‘Little Miss Sunshine’ and ‘Juno’) that all hit box-office pay dirt by attracting moviegoers, young and old.

I’m betting that Rice is already trying to figure out how to export that sensibility to Fox TV, which thanks to ‘The Simpsons’ and ‘Family Guy,’ already has an iconoclastic comedy brand of its own. But if I was hiring a new studio chief today, I’d be looking for someone young and hungry with the eyes, ears and voracious appetite of a real pop-culture fan, because it’s the vast landscape of comic books, graphic novels, cult TV shows, webisodes and video games that will provide studios with the raw material for the next generation of mainstream movies.

Marc Shmuger. [UPDATE: The identifications in an earlier version of this post were reversed.] Credit: Mel Melcon / Los Angeles Times.