… as little guys scramble for space

This summer’s wave of mega-mergers is raising the anxiety level of many in Hollywood’s creative community, who’ve been left wondering what their place will be in a media landscape dominated by a dwindling number of giants.

True independents are feeling vulnerable – not to mention confused – over what the dizzying array of business combinations will mean for them. This angst applies particularly to TV producers, though screenwriters and film directors also have reason to ponder what it could mean if buyers like Warner Bros., New Line and Castle Rock all potentially play for the same owner.

Industry consolidation had resulted in limited opportunity for indie contractors before the recent mega-deals. Independent series producers are already an endangered species, with the likes of Stephen J. Cannell Prods., Orion TV, Reeves Entertainment and other midsized players having all been absorbed into larger entities.

In the same vein, the expectation is that the new, vertically integrated companies will want to own as much product as they can, relegating producers in even greater numbers to the role of employees working for hire as opposed to being independent entrepreneurs.

Such a shift within the industry could have far-reaching implications for everyone, including the unions and guilds, which may find themselves negotiating with a handful of major companies which can thus strike a harder bargain the next time they discuss contracts.

Others say even with consolidation there will still be enough companies to provide competition for talent, suggesting a possible benefit from the mega-mergers for independents: Disney/CapCities/ABC may be less inclined to buy shows from a major competitor like Warner Bros, or Paramount, which are also in the production/distribution business, than independents who operate with lower overhead and thus can produce more efficiently.

“No studio or network can self-supply its entire lineup,” notes one indie producer.

Still, the belief that the spoils will fall to indies may be in some degree wishful thinking. In terms of the series business, the horse long ago left the barn. Only a very few well-capitalized companies – like Carsey-Werner, fat with syndication profits from “The Cosby Show” and “Roseanne” – are able to compete with the majors. A-list players like Witt-Thomas, Wind Dancer Production Group, Steven Bochco Prods., Cannell and others all have alliances either with a studio, network or major distributor.

With Disney acquiring CapCities – promising to increase its output of movies and specials for the network – and Time Warner looking to acquire Turner Broadcasting, the refrain is that there will be a continued need for writers and producers but fewer opportunities for them to own the result of their labors outright. “I’ll still be able to produce,” says one producer, on condition of anonymity, “but I’ll be working for one of these (companies).”

“Warner Bros, doesn’t make ideas. Writers, producers and actors do,” suggests Leonard Hill, a principal in Hill-Fields Entertainment and chairman of ACI, a distribution consortium of independent producers. Those disciplines, he adds, “will be as valuable as ever. Whether we receive full return for our efforts remains to be seen.”

Hill and other outspoken advocates during the financial interest and syndication rules debate have long warned that the ultimate effect of deregulation would be a consolidation of the industry and abatement of opportunities for truly independent producers.

In some respects, that shift has been in the works for some time. A recent example is indie movie distributor World Intl. Network (WIN), which has suffered financial troubles, squeezed by deep-pocketed competitors like Hallmark Entertainment, which acquired RHI Entertainment and has forged alliances with a lengthy roster of producers, including Francis Ford Coppola and von Zerneck-Sertner Films, one of the founding members of ACI.

A tightening in the syndication market has also made the studios more open to exploring genres, like telefilms and reality programming, that once were the province of independents. Disney, for example, for years eschewed one-hour drama series, content to focus on producing sitcoms, which can bring huge returns in domestic syndication on a show like “Home Improvement.”

Doubles not so bad

Now, however, the studio is getting back into the drama business (producing the new UPN hour “Nowhere Man”), realizing that while there are few home runs to be hit in that field, singles and doubles aren’t such a bad thing in a splintered media marketplace.

The same, many fear, may hold true for TV movies and reality programming. These areas have been perceived to offer profit margins too slim to warrant the time (or support the overhead) of a major studio.

“I’m not a big fan of mergers,” says Dave Bell, a documentary maker who is producing the new firstrun strip “LAPD” for MGM this fall. From Bell’s vantage point, the mergers and strategic alliances sweeping the industry wind up changing the attitude of buyers.

“Everybody goes back and tries to reinvent the wheel,” he says. “They think they can produce everything in-house because they are so big and powerful and smart. All you get from that is programming that you wouldn’t show Aunt Minnie.”

Even in the aftermath of all the mergers – and the promise of more deregulation and corporate couplings – Bell is hopeful there will always be multiple buyers to which he can shop his projects. “If Congress came along and said there would be no more competition, I’d get out of the business,” he asserts.

The problem, of course, is that it’s not Congress but industry that’s responsible for the dimunition of competition, which may be causing more concern among the creative community and certain legislators than any other issue. Does the consolidation of the media into fewer hands threaten to suppress information? As one producer put it, “I’m scared of a world where Rupert Murdoch, Michael Eisner and Jack Welch… are able to control the dissemination of news, both print and video.”

That point was made with the Disney-CapCities deal and Disney’s newfound ownership of Los Angeles magazine, whose editor, Robert Sam Anson, has been working on an unflattering book about Eisner and the studio.

Very, very wary

Bill Blinn, an independent writer-producer and chairman of the Caucus for Producers, Writers & Directors, says members of his group are “very, very wary” about the events of the summer. “I think it’s potentially very worrisome and ominous,” he says, making it more difficult to produce offbeat or idiosyncratic programming.

“Quentin Tarantino would have had a difficult time,” says Blinn, pointing out that things may become that way again.

In such a marketplace, Blinn also suggests that the growth potential of independents is limited, noting that small fish can swim among the predators until they begin to grow large enough to be noticed. “As the medium-sized fish starts to get bigger, the shark eats it,” he says.

Still, not everyone is ready to throw in the towel on independents. Another reality producer, Dave Forman, says that even as the marketplace shrinks, other players “keep jumping into the game.” Forman points to companies such as Sacramento-based Kelly News & Entertainment, a division of Kelly Broadcasting, which has picked up a weekly project from him for fall ’97.

That comes as good news to firstrun producers, who have been watching the landscape at the top of the entertainment ladder continue to erode. Deep-pocketed companies like Cox Communications, which is behind Rysher Entertainment, Scripps-Howard Prods. and Hallmark Cards, have also provided the backing needed to create entities capable of competing in primetime.

Despite the emphasis on bigger companies, producers say the creative community still hold the ultimate key to the equation. “What we have is the software, “Hill says,” in an industry that keeps looking for what’s next in terms of hardware.”

Jim Benson contributed to this report.

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