The shrinking studios: monoliths to megabanks

SO HERE’S THE WAY it used to be at Oscar time.

At about this stage of the proceedings, each of the studios would send employees a list of its films that were in contention. The purpose of these “reminders” was clear: If you worked for MGM, for example, you’d sure as hell better support MGM’s slate at Oscar time.

Remember, this was in 1939, not 1999, and just about everyone worked for one studio or another. Studio movies dominated the Academy Awards, studio loyalty was a virtual mandate, and there were no videocassettes to circulate.

If this structure still prevailed today, of course, the big question would be whether “Armageddon” would stomp on “Godzilla” — forget about stuff like “Shakespeare in Love” or “Life Is Beautiful.”

WE’VE COME A LONG way. Today the question quietly being debated is not whether any of the studios can still “get out the vote,” but rather whether the studios per se have much of a future.

This is not to suggest that the Foxes and Disneys and Paramounts may disappear from the scene. But some insiders believe that, over the next few years, they likely will shrink in size and function. The entities that will emerge may pose a startling contrast to the pop culture monoliths of 60 years ago.

Consider the forces that already are quietly at work: Almost all of the studios are cutting back on their production slates as well as their development. Those projects that are moving forward require financial partners. In the case of at least one studio, an overseas partner is taking over foreign distribution and yet another domestic partner is advancing money for the right to handle ancillary sales in the U.S.

Then, of course, marketing and merchandising partners are being rounded up to help cover the ever-escalating cost of launching a movie domestically. This, in turn, means that more and more of the marketing strategy and execution is being spread over a wider network of “experts.”

THE HARD FACT IS that most of the studios already are shrinking,” says the production chief of one of the majors. “It’s all taking place quietly, but it’s happening. Deals are being canceled. Executives are not being renewed.”

The studio, he points out, slowly is assuming the role of a sort of superbanker, marshaling resources, arraying projects and orchestrating the negotiations. Inevitably, those projects being favored offer the most obvious commercial prospects with the smallest apparent risk. Since these usually are star-driven vehicles, their costs continue to climb, thus perpetuating the entertainment industry’s own private inflationary cycle.

If much of the production, marketing and distribution functions are assigned to “partners,” there’s clearly a diminishing need to maintain sprawling organizations within the studio. More and more “satellite” companies like New Regency or Beacon will be established to pick up the slack.

NONE OF THIS IS unprecedented, to be sure. Some industry veterans recall that two of the most successful regimes in recent history were the smallest in terms of overhead and manpower. These were United Artists in the 1960s under Arthur Krim, which gave birth to movies like “Tom Jones” and “The Apartment,” and Paramount in the early ’70s, which hatched “The Godfather” movies, “Rosemary’s Baby” and “Chinatown.”

These two regimes had several common denominators. Their overhead was minimal. They had no studio facilities — just suites of offices. Nothing was put into development unless a filmmaker said he intended to shoot the film in the next couple of months but needed a final polish.

And, finally, their movies made lots of money.

No one is suggesting such a radically deconstructionist approach today, but there are voices in the industry who assert that, given the diminished role of the studio, a diminished overhead may not be far behind. Hence there’s little expectation that studios in the future will be sending out “reminders” to personnel urging support of their product during the Oscar race. Instead, what may come in the mail are pink slips.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Voices News from Variety