New Paramount Unit Will Do Commercials

Paramount Pictures, perhaps best known for making movies such as “Raiders of the Lost Ark” and the Star Trek films, said Tuesday that it will soon begin filming something else--television commercials.

The Hollywood studio, which is a division of Gulf & Western Corp., has created a new unit, Paramount Images, that will exclusively produce commercials for television. Commercials will be filmed on the Paramount lot in a studio directly across from the sound stage where the TV show “Cheers” is filmed.

“We want to make better use of Paramount’s facilities,” said Paul Babb, who was named executive producer of Paramount Images. “The purpose is to take advantage of the things that are already here--the stages, the facilities and even the construction crews.”

Since the facilities are already in place, Paramount will spend very little to set up this new unit, which hopes to film as many as 100 commercials annually, Babb said. Although Babb would not project first-year revenues, industry executives estimate that the new division could post annual revenues of $6 million or more.

“The commercial business is a very solid, working business,” said Babb. “You don’t have the runaway costs of a few years ago. If done properly, you can do very well making commercials.”

Paramount, however, is not the only motion picture studio to attempt to make a profit from commercials. For nearly 25 years, Columbia Pictures operated a TV commercial production unit, EUE Screen Gems, which it sold in 1983. Also, MGM, Universal Studios and 20th Century-Fox all formerly operated TV commercial divisions.

“Most of them closed up because, in the end, it wasn’t profitable,” said Ted Goetz, president of the Assn. of Independent Commercial Producers/West and executive producer at the Studio City production company Filmfair. “For a major film studio, the money to be made in a TV commercial is penny ante, but the executive attention that must be devoted to it is considerable.”

In Los Angeles, Odyssey Entertainment operates a TV commercial production company, Odyssey Filmakers, which has filmed ads for advertisers including General Tire and Del Taco/Naugles.

“Everybody in this industry is affected when another production company opens,” said Sherry Seckel, vice president and executive producer at Odyssey. “There are already too many directors dividing up too small of a pie.”

But she said that Paramount could have some advantages. After all, Paramount will be competing against many much smaller production companies that generally have tiny budgets and small staffs. And historically, some smaller production companies in Los Angeles have been known to appear on the scene one day and disappear the next. “There is solidarity in a name like Paramount,” said Seckel. “There is an inference that they can weather the storm.”

To attract ad agencies and advertisers, Paramount has hired several directors who are well known for their past TV commercials, including Victor Haboush, who has filmed ads for McDonald’s and for the Kibbles ‘n Bits and Tender Chops brands of pet food.

At the same time, Paramount has also lured actor and director Leonard Nimoy--of Star Trek fame--to direct his first TV commercials. Nimoy recently directed the Touchstone hit “Three Men and a Baby.”

“We don’t know what ads Leonard will do yet,” said Babb, “but I can assure you they will be glitzy.”