Though Hollywood is accused of inaction, Disney is taking steps to battle problems like soaring costs and shorter shelf space.

An eminent investment banker was giving me his assessment of the movie industry the other day and, listening to him, I realized that I had heard the same words over and over again in recent weeks. Hollywood is making way too many pictures, costs are out of control, yet no one’s doing anything about it — that’s the mantra.

Well, I’m glad everyone’s in agreement, except for one thing: I’m not sure they’re right. Is Hollywood really fiddling while the back lot burns?

I put that question to Disney’s astute studio chairman, Joe Roth, over breakfast last week, and he stared at me as though I were a mouse murderer. “Fiddling — absolutely not. Costs are rising and too many films are being released, what else is new?”

“Are you planning to do something about it?” I asked.

“I’m planning to change the subject,” the normally affable Roth said.

“Come off it, Joe,” I persisted. “I’m not looking for state secrets, like how much wine is sold at EuroDisney.”

“It’s impossible to respond without pontificating, and I won’t do that,” Roth said, changing the subject.

Ten minutes later I changed the subject back again. “Wasn’t there a question we’d forgotten to deal with?”

Roth paused for a beat.

“The basic issue isn’t only cost, it’s about change,” he said. “The movie business is becoming a whole different ball game and we sat up and took notice.”

“Change, as in ?” ” — as in audience choice. Our prospective audience out there is faced with a staggering array of choices between different movies and different kinds of diversion. Even the related price points have changed: parking, popcorn, ticket prices — it could be $50 for a family of four to go to the movies. The under-30-year-old market effectively has no moviegoing habit, having grown up with homevideo, videogames and the home computer. Truthfully, movie-going has become an expensive option.”

“So why not give them fewer options by releasing fewer pictures?”

“True in part,” Roth replied. “Disney plans to cut its slate to between 18 and 20 releases by 1998,” he said, “compared with more than 38 this year.” Consistent with that reduction, Disney’s echelons of production executives have been cut nearly in half. Fewer pictures need fewer decision-makers.

“And fewer filmmakers?” I put in.

“Not fewer, but more dedicated, at least contractually so,” Roth responded. Disney’s talent deals have been changed into “commitment deals,” he explained. Hence filmmakers like Michael Mann, Jon Turteltaub or Steven Herek, in signing deals with Disney, have committed to make two of their next three movies at the studio rather than simply agreeing to develop projects. “We don’t want people who have a slate,” Roth said. “We want directors who are dedicated to making specific movies. We want producers who have a passion for a film, not a slate of films.”

The studio, he added, would respond to this passion by being willing to invest more in fewer projects more time and focus on marketing as well as more money. “We need event pictures and original ideas that will thrill worldwide audiences either with emotion or great excitement,” he said. “And we need to support them with all our resources.”

An example of a movie with an “event idea” is “Phenomenon,” the John Travolta project that quietly rolled up $100 million in the U.S. alone this summer.

An even more vivid example: “The Rock,” which many initially feared would get lost in the mid-summer maelstrom. In response to these concerns, Roth advanced its release date from late July to June 7, to find wiggle room between “Mission: Impossible” and “Eraser.” The studio also earmarked a $20 million TV blitzkrieg to open the movie a caper that evoked criticism from rival studios.

But the gamble paid off: What was once tagged as a dark horse summer movie ended up grossing $133 million in the U.S. and $325 million worldwide, thus yielding a nine-figure profit for the studio, Roth says.

Roth was staring at me across the table.

“Something I said?” I asked.

“No, something I said. I’m pontificating. I told you I wouldn’t do that.”

“Your competitors don’t criticize you for pontificating,” I replied. “They’re mad because you spend too much money on advertising. They feel you’re making the cost inflation even more extreme.”

“That’s narrow-thinking,” Roth insisted. “It’s clearly working for our films. You can’t think of ad spending in terms of domestic theatrical films alone. A major studio spends to stimulate all of the revenue streams, from merchandising to video to theme parks. Look at ‘The Hunchback of Notre Dame.’ It will gross $300 million worldwide, but when you look at all revenue streams that number more than doubles. To not see the strategy of release dates and ways to create event advertising as weapons sometimes equal to the movie idea is missing the point. Look at the spectacular strategic job that Fox did with ‘Independence Day.’ “

“Now, that’s pontificating,” I said.

“Just the facts,” Roth laughed, pointing out that his studio had more potential blockbusters poised on its launching pad for the Thanksgiving to Christmas period, which it intended to support aggressively “Ransom,” “101 Dalmatians,” “Evita” and “The Preacher’s Wife,” the Penny Marshall romantic comedy starring Denzel Washington and Whitney Houston. “We’re all hoping ‘101 Dalmatians’ will be a major Disney live-action franchise and you’ll see various ways in which we attempt to turn it into a big event.”

“What ever happened to the Disney idea of trying for singles and doubles?” I queried.

“We love them,” said Roth, “along with a couple of Ken Griffey-style home runs. Can we change the subject now?”

“Definitely.”

Joe Roth stared at his empty cup, then shook his head wearily. “Do people really believe that no one’s doing anything about it? Hollywood’s just fiddling ?” “Yup.”

“There’s no accounting,” he replied. “Almost makes one grateful for some occasional pontification.”

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