Lions Gate tres shriek

By PATRICK GOLDSTEIN

Oct. 31, 2005 12 AM PT

EVERYWHERE I went in Hollywood last week, people seemed to be in two distinct camps. They were either depressed -- you would be too if none of your movies were working -- or they were wildly jealous that they didn’t have a movie like “Saw II.” The Lions Gate film, which opened No. 1 at the box office with an estimated $30.5 million, the best opening in the company’s history, has an eye-catching poster that sells its concept perfectly. It shows two blood-spattered fingers, their nails split and cracked, with the tagline: “Oh yes, there will be blood.”

After catching a glimpse of the poster the other day, one rival marketing executive said enviously: “That is a great movie poster. It’s so creepy that it tells you right away -- this is a very scary movie.”

Lions Gate has been getting a lot of admiring glances lately, even from its well-heeled competitors. While the big studios have been staggered by a string of flops, Lions Gate has been on a nice under-the-radar roll. Since it made headlines with its release of “Fahrenheit 9/11” in the summer of 2004, the tiny independent has had a steady stream of hits. “Open Water,” a thriller it bought for $2 million at Sundance, took in $30 million last fall. The African American family comedy “Diary of a Mad Black Woman” was a surprise hit in the spring, making more than $50 million. In summer the studio had a hit with “Crash,” a critically praised drama that grossed $68 million. And then there was the original “Saw,” a $1.3-million horror film that brought in $55 million last fall and was a huge DVD seller in the spring.

Thanks to its box-office heat and a lucrative video library, Lions Gate has been the subject of steady acquisition rumors. Desperate to hire someone to run its specialty division, Paramount recently made a run at Lions Gate Films President Tom Ortenberg, though he says he’s not going anywhere.

It’s no wonder the big studios are envious of the business model. At a time when youth-oriented niche movies are one of the few successful areas of the business, Lions Gate has done an especially savvy job of pouncing on cool projects and keeping costs to a minimum. “Saw II,” made for $5 million, is already in profit after this weekend’s opening. But more important, it offers a striking demonstration of how Lions Gate is more nimble than its rivals and more in sync with the fickle young moviegoers whom studios have failed to connect with this year.

Anyone who has to reach teenagers, whether it’s with movies, music or sneakers, realizes that a new generation comes along every two years. So Lions Gate has learned to seize the moment. This weekend, “Saw II” trounced “Legend of Zorro,” a sequel that took seven years to make. At a big studio, it typically takes at least two years to get a sequel into theaters, but “Saw II” arrived exactly 12 months after the original. That’s because at Lions Gate the decision-making is in the hands of roughly half a dozen key people, not a giant boardroom full of executives.

“Everyone here is empowered to make big decisions,” explains Peter Block, president of acquisitions at Lions Gate. “It comes from having a history as an independent where we had to go with our instincts. When you don’t have the kind of money the big studios have, you learn to cut corners and do things on the fly.”

What also sets Lions Gate apart is its willingness to take risks and be outrageous. Nowhere is this more evident than in its marketing of “Saw II.” Studio ad campaigns are largely predictable because studios, eager to reach everyone, are afraid of alienating anyone. Lions Gate operates much more like a hip-hop record label. It wants to reach a core of cool kids who crave something that hasn’t already been homogenized for mass tastes.

“The big studios have to shave the edges off their material,” said John Hegeman, Lions Gate marketing president. “We want to find those edges and highlight them. We talk to our core audience first. Then we can go after a bigger audience by having them hear about us and think, ‘What am I missing?’ ”

Lions Gate almost seems eager to alienate stodgy adults, notably the Motion Picture Assn. of America, which regulates studio marketing materials, figuring that will only excite its young audience more. For the Rob Zombie film “The Devil’s Rejects” earlier this year, the studio’s ad pictured the film’s wild-eyed killer, armed with a shotgun, posed as if he were at the Last Supper. With the original “Saw,” Lions Gate marketing wizard Tim Palen created an Internet site that put fans into jeopardy situations from the film, with the admonition, “How [messed] up is that?” He flooded comic-book and horror conventions with gory posters bearing images of severed limbs. He also organized an actual blood drive, advertised with a poster of a sexy nurse drenched in blood.

Perhaps the topper was an amputee beauty pageant Lions Gate did as a “Saw” co-promotion with “The Howard Stern Show” on E! Entertainment.

A photographer and former graphic designer who often designs his own art, Palen seems to enjoy his adversarial relationship with the MPAA, whose ratings group banned his initial “Saw II” poster, which had two severed fingers protruding from a sticky pool of blood. “They freaked out,” he says, beaming. “But I honestly credit having the MPAA upset with us as helping our original tracking on ‘Saw II.’ We got all sorts of stories in the online media -- and they all showed our banned art.”

Studio ads are regulated by Marilyn Gordon, the MPAA’s director of advertising administration, who did not return my calls to discuss their policies. Many of Lions Gate’s more outrageous Internet ads have slipped by because they’re ostensibly aimed at the international market, which is outside the MPAA’s governance.

It’s hard to imagine a major studio using the word “blood” in its advertising tagline. The conventional wisdom is that being too explicit turns people off. “If I’d brought this art to a marketing meeting at Sony, where I used to work, they would’ve lost their minds,” Palen says. “But my feeling is that if you’re really going to turn people on, you have to be willing to turn some people off. Whenever we asked fans about what they wanted in our ‘Saw’ sequel, they always said, ‘More blood!’ ”

Having strong grass-roots support for its films allows Lions Gate to save on marketing costs. For a wide-release film, studios routinely spend $40 million on prints and advertising; Lions Gate rarely spends half of that. But the real value of having hits is that they give Lions Gate the opportunity to create its own versions of a studio franchise.

The sequel to Tyler Perry’s “Diary of a Mad Black Woman,” called “Madea’s Family Reunion,” is on as much of a fast track as “Saw II,” due out next February, exactly a year after the original. “Family Reunion” introduces Keke Palmer, a young African American actress who has a leading role in “Akeelah and the Bee,” a black family picture that is due out two months after “Family Reunion,” allowing Lions Gate to promote “Akeelah” by attaching its trailer to “Reunion.”

“We used to be completely reactive and opportunistic,” says production chief Mike Paseornek. “When something hot would become available, we’d grab it. Now I actually know what my slate is going to be for the coming year.”

The company plans to release a horror thriller and an urban film every quarter, while continuing to make or acquire quirky documentaries or awards-caliber films such as “Crash” to balance out its slate. “Success definitely breeds success,” says Ortenberg. “Doing well with ‘Black Woman’ helped give us the confidence to move ahead with ‘Akeelah and the Bee,’ while the experience of putting out ‘Fahrenheit 9/11’ helped us do a better job on ‘Crash,’ where we did a sociopolitical campaign as well as going after upscale adults and an urban audience.”

Ortenberg credits Lions Gate chief Jon Feltheimer for encouraging individuality and risk-taking. As Block puts it: “Our films that do the best usually are the ones we get most emotionally involved with. No one had heard of Tyler Perry, but I remember Mike Paseornek shouting, ‘I don’t care who that guy is. I want that movie!’ The same with ‘Crash.’ We reacted so emotionally that we had to find a way to make it work.”

A show of emotion goes hand in hand with a refreshing irreverence. At lunch one day, Ortenberg proudly noted that he’d just seen a story claiming that “The Devil’s Rejects” had more uses of a certain expletive than any movie in history (560, if you’re keeping count). “We didn’t make it for that reason,” he said. “But we did fight with the MPAA to keep the language in.”

It’s always more fun working at a place where almost anything goes. “We don’t have the deep pockets of a big studio,” said Palen. “So we just have to be louder and brattier. Making noise is encouraged because it’s something you don’t need any money to do.”

“The Big Picture” usually runs Tuesdays in Calendar. Suggestions or criticism can be e-mailed to patrick.goldstein @latimes.com.

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How to make a sequel in a year

Oct. 29, 2004: “Saw” arrives in more than 2,200 theaters.

Nov. 1: The film has an $18-million opening weekend. Lions Gate greenlights the sequel.

Mid-November: “Saw” director James Wan decides to serve as an executive producer of the sequel but not to direct.

Mid-December: Darren Lynn Bousman is hired to direct the sequel based on his thriller script “The Desperate.”

Feb. 4, 2005: Bousman delivers a rewrite of “The Desperate,” which is transformed into “Saw II.”

Mid-February: Leigh Whannell, who wrote “Saw,” revises and polishes the script.

March 1: Pre-production begins with casting, construction of sets and a search for locations in Toronto.

May 2: “Saw II” shooting begins in Toronto.

June 6: Shooting wraps.