Is film biz just a sellers’ market?


IF Hollywood had a suicide prevention hotline for despondent agents, managers and producers, the switchboard would be swamped. In the last few weeks every industry insider I’ve had lunch with has been morose, sullen or depressed -- one poor guy actually rushed off to see his therapist right after we got the check.

To hear the talk, the dark ages are upon us. Producers are glum because studios are killing their deals left and right. The agents and managers are bummed because after untold years of actor and filmmaker salaries heading in only one direction -- up -- studios are putting the squeeze on talent, having recently killed a series of costly star-driven movies in favor of more manageable genre pictures and family films.

With Jim Carrey essentially out of work (having seen two consecutive projects fall apart), Tom Cruise’s Paramount production deal in jeopardy and Brad Pitt taking steep pay cuts to get a pair of ambitious films made, you know we’re in a new man-overboard stage of the business. U.S. movie attendance has been flat for a decade (grosses are up largely because of increased ticket prices), while DVD sales are leveling off after a lengthy boom.


So the media conglomerates that own today’s studios are demanding less risk and more return. Everyone is doing some sort of cost cutting, reacting to Hollywood’s core inconvenient truth: At most media companies, the movie studio is the least-profitable, slowest-growing and most cash-intensive division, making it a drag on corporate profits, not to mention a tempting target for job slashing.

The big news has been at Disney, which to save up to $100 million a year in overhead costs has axed 650 employees, most notably Nina Jacobson, its respected head of production. Her replacement, Oren Aviv, the studio’s marketing chief, was given the job by studio chief Dick Cook because, as Cook told the New York Times, Aviv “knows how to sell something. He knows what works and what doesn’t.”

Coming not long after Universal installed Marc Shmuger, a former marketing chief, as studio chairman, Disney’s move was taken as a not-so-subtle hint that the era of studio filmmaking that gave us Irving Thalberg, Darryl Zanuck, Robert Evans and John Calley is finally over. Disney has essentially gone from being a movie studio to a family entertainment company, making 10 Disney-branded films a year, all pictures that will be easily exploitable by one of Disney’s other businesses. It’s telling that the upcoming Disney slate is dominated by more sequels (“Pirates 3” and a new installment of “The Chronicles of Narnia”), animation pictures and family fare like “Meet the Robinsons.”

In the New Hollywood, the power has shifted from production to marketing. And why not? When your aim is to make a franchise picture aimed at the whole family, the person you want at the helm is a brand-management expert, not a filmmaker-friendly production chief. Next summer is already jammed with another slew of sequels, including new installments in the “Harry Potter,” “Spider-Man,” “Pirates of the Caribbean,” “Shrek,” “Fantastic Four,” “Rush Hour,” “Bourne” and “Ocean’s Eleven” series. These are consumer products, not cinema.

AT studio after studio, the production chief who used to say “We’re going to make this film” now has to share clout with an ever-expanding green-light committee, with the studio marketing guru having the biggest vote. The mantra is: Don’t make a movie you don’t know how to sell. It’s only a matter of time before a studio marketing chief hands some poor filmmaker a 90-second spot, saying, “Here, we’ve cut the trailer. Now go out and make a movie just like it.”

For someone who’s made a living as a creative filmmaker, this marketing-driven approach is maddening. “It’s folly for studios to say we’re only going to make a movie we know how to market,” says producer Michael Shamberg, who made the Oscar-nominated “Erin Brockovich” as well as the new Oliver Stone film, “World Trade Center.” “The problem with marketing is that it’s based on what’s worked in the past. But audiences want freshness and new ideas, which is all about the future. If a studio is unwilling to be a home for fresh ideas or daring films, they’re ultimately not going to be competitive, because the top talent is going to go somewhere else.”


Dick Cook insists that promoting Aviv doesn’t mean Disney will become a movie-studio version of McDonald’s. “We picked Oren because he’s talented and talent trumps everything else,” he told me last week. “It’s like putting together a good ball team -- you draft for talent. Agents have been successful running studios. Babe Ruth started out as a pitcher before he became a home-run hitter. When talent surfaces, you reach out and grab it.”

Apparently, executive talent is one thing, creative talent another. Lost in the hoopla over Jacobson’s departure was the news that Disney also let go of J.J. Abrams, creator of “Lost,” director of “Mission: Impossible III” and perhaps today’s hottest writer-producer. It’s telling that Abrams didn’t walk away from Disney. Disney walked away from him. To hear the agents talk, the studios have declared war on talent, intent on grinding down their fees after years of free-market spending, not unlike the way that major league baseball owners cracked down on free-agent spending in the 1980s. No one’s saying the studios are colluding, as the baseball owners did -- after all, the studios can’t even agree on a new DVD format. But they are clearly taking back much of the power that had been ceded to star-packed agencies like CAA.

The talent is feeling the crunch because many studios believe it’s crazy to give away 25% of the back-end profits to talent who can no longer guarantee they can open a movie. Of the four films generally considered to be this year’s most profitable big hits -- “Pirates of the Caribbean: Dead Man’s Chest,” “Ice Age: The Meltdown,” “Cars” and “Over the Hedge” -- only one has a movie star. In fact, three of the four don’t have any actors at all.

ASK any studio boss. Animation is the most profitable segment of today’s business, in part because talent costs are so low. This is no fluke. None of last year’s top-three grossing films -- “Star Wars Episode III,” “The Chronicles of Narnia” and “Harry Potter and the Goblet of Fire” -- were driven by a movie star either.

On the other hand, in today’s franchise-crazed world, the last place a serious actor would go for good material is to a studio. With development slates being slashed everywhere, most studios have little to offer top stars, unless they want to be in a broad comedy or action-filled thriller. All the movies featuring best actor nominees at last year’s Oscars were either independently financed or made by studio specialty divisions. Likewise for virtually all of the movies that spawned best actress and supporting role nominations.

Top filmmakers can always get a job at a big studio -- if they’re willing to sex up some franchise material, as Steven Soderbergh has done with the “Ocean’s Eleven” series and Michael Mann has done with “Miami Vice.” This is the new Hollywood: Everyone works for peanuts on Oscar fare like “Crash” while the cash spigot is wide open for “Rush Hour 3.”


Playing an increasingly minor role at most media conglomerates, movie studios have had to adapt to the culture of their corporate parent. At General Electric-owned Universal Pictures, Shmuger fits neatly into the formula for a good GE division manager. He can create and sell a new piece of product. The rub, of course, is that movies aren’t just a piece of product. If there is one immutable law in the film business, it’s that only risk brings reward. From “One Flew Over the Cuckoo’s Nest” and “The Godfather” to “Lord of the Rings,” “Crash” and “March of the Penguins,” movies that seemed like longshot gambles ended up helping to transform the culture, thanks to a bold risk-taker saying, “Count me in.”

Maybe I’m too much of an optimist, but I’m betting that Hollywood’s latest effort to bean-count its way to profit will be short-lived. After all, who wants to work in a business whose motto is “Count me out”? Even a GE loyalist like Shmuger, who once cut such a good trailer for Mike Nichols that Nichols told him he should give up marketing for filmmaking, can’t resist green-lighting a movie like “Charlie Wilson’s War,” an ambitious new film Nichols is directing at Universal from a script by Aaron Sorkin.

GE needs good lightbulbs to prosper, but Hollywood needs great artists to survive. Give the public more sequels with cheap talent and maybe you’ll improve your profit margin. But you’ll take even more of the magic and surprise out of the business, turning it into one giant, suffocating rerun machine, driving fans to more involving entertainment alternatives. Magic and surprise may not add up to much on a corporate balance sheet, but on a movie screen they mean just about everything.

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