Specialty arms are angst-ridden as studios shake up biz plans
Studio execs are lavishing more enthusiasm and more money than ever on their specialty divisions, hailing them as jewels in the corporate crown. But if they’re so valued, why are so many of these units in flux?
With hyped expectations and upbeat biz plans, studios are funneling more money into niches, increasing the budgets on fewer films. As conglom-dominated studios give more attention to their “indies,” however, the result is a large-scale identity crisis.
While the Miramax-Disney relationship may dominate the headlines, there are tugs-of-war going on between other majors and their specialty shingles — battles with equally large implications.
Paramount Classics and Warner Independent have new mandates (and expectations are that shakeups are pending). Over at Sony, UA seems headed for oblivion while Screen Gems, TriStar and Triumph vie for attention. Even Fox Searchlight, which many hold up as a model niche, is winnowing its output this year.
Major studios and their conglom parents have always liked the idea of niches: They’re a way to get into bed with new talent and win awards — and maybe earn a nice little profit. But little profits are not enough these days.
Strong reaction to “Sideways” and “Napoleon Dynamite” have raised expectations, earning so far a respective $96 million and $46 million at the worldwide box office. Inspired by them, majors are throwing more money into the niche arena, hoping for similar results. But those pics were anomalies — and a fluke is not a business plan.
Other than Sony Classics, these divisions are no longer turning out arthouse pics.
Though Miramax’s future is uncertain, its legacy is long-lasting. It transformed the studio’s niche divisions from offering arthouse works like “Cinema Paradiso” and “The Crying Game” into “Chicago” and “Gangs of New York” — venturing into major-studio territory and forever blurring the line of what constitutes a specialty division.
One veteran distribution whiz at a studio subsid sighs that each niche division is unique. “But it looks like many are emulating the studio model. They are sort of swinging for the fences on every picture. When you do that on every swing, when you strike out, you strike out really badly.”
The changes have implications beyond the shingles themselves. Niches are revving up their own development and production agendas as they plan fewer acquisitions. That means more studios arms this year will take big chances on smaller slates of pics. This makes things difficult for those trying to sell their projects.
“There is a sense of limbo in the marketplace,” said one specialty film vet, who mentions Miramax as an example of the confusion. There soon will be two Miramax incarnations, an arthouse unit at Disney and the venture to be started by Harvey and Bob Weinstein, and people are fuzzy about which one their deal would end up with.
But Miramax is just the tip of the iceberg, as the changes in the biz have sellers scratching their heads about who’s buying and what kind of projects they’re looking for.
“Miramax blowing up has nothing to do with trends,” added one industry maven. “But we are reaching one of those moments when all of the studios are taking a hard look at that business.”
Focus Features, headed by former Good Machine execs David Linde and James Schamus, seems immune to the shakeups, and Sony Pictures Classics, with low overhead and a well-honed biz plan, appears to be rock-solid. The company is continuing its 15-year tradition of rolling out about 25 films per year, many foreign-language.
After defining the studio arthouse arm trend in their Orion Classics days, SPC’s Tom Bernard and Michael Barker have continued to shoot for singles and doubles, which can break out for more but don’t alter their biz plan.
That plan seems modest by “Spider-Man” standards, but logical given the realities of the niche world.
“The specialty business is much more about volume than trying to hit the ball out of the park,” said one veteran of the indie wars. “I think that’s one mistake the studios make over and over again. It’s a different way of thinking. The key is the ability to do a kind of grassroots marketing effort on a city-by-city basis. These movies have to be marketed on a market by market, theater-by-theater, patron-by-patron basis.”
That’s not the studio mindset, which aims for tentpoles, wide openings, boffo opening weekends and McDonald’s tie-ins.
The studios are also bringing in their people to help with the marketing and distribution of niche films — which is an entirely different way of doing business.
“Over the years, the most successful ongoing specialty units are the ones to operate all as independently as possible,” said the founder of one specialty division who has since moved on. “With all completely different people” from those working at studios.
It’s always good to get help and an outside voice. But the danger comes when the studios want to change the entire operation.
While at United Artists, maverick Bingham Ray brought in Michael Moore’s “Bowling for Columbine,” but he was also charged with releasing MGM’s “Jeepers Creepers 2.” Ray wanted UA to remain dedicated to little movies, but that was not the corporate mandate. (That company’s future fell into question entirely when Sony and MGM merged.)
True indies are an endangered species.
As companies like Hemdale, Carolco, Goldcrest and Orion have faded, there are only a handful of genuine indies left — Lions Gate, Newmarket, ThinkFilm and a few others. Newmarket was even apparently a takeover target for Paramount to seed its new division.
While studios often label their specialty divisions as “indies,” they are exerting more control over them. The divisions have been dubbed by Indiewood as “the dependents.” And history has shown that the niches that flourish best, like Sony Classics and Focus, are the ones with the least meddling from the parent.
Some are looking at Paramount Classics as a test case.
For years, David Dinerstein and Ruth Vitale fretted because they got so little attention (and funds) from the parent company.
Paramount certainly made a bold move to relaunch its Classics label — under guidance from Viacom co-prexy/co-chief operating officer Tom Freston and newly installed Paramount Motion Picture Group chairman-CEO Brad Grey — by winning a bidding war for Sundance’s hottest pic, John Singleton’s “Hustle & Flow,” though some felt the label overpaid.
Led in negotiations by Vitale and Dinerstein, the label pacted for a $16 million multipic deal with Singleton, and fortified its ties with MTV Films in the process, which had partnered with Searchlight on the left-field hit “Dynamite.”
(Viacom’s BET could also help pump the urban-skewing pic about a Southern pimp who wants to make it as a rap star.)
Par Classics then went and paid $2 million for worldwide rights to “Mad Hot Ballroom,” with its sister Nickelodeon.
The move was a coup for a company previously known for buying highbrow fare at bargain prices under Par’s previously tight-fisted regime.
But despite priming its pipeline, Par’s specialty scene is still fuzzy to the outside world.
“These specialty divisions have been cyclical,” said one exec. “They start out with one mission statement, and then they change their mission statement with success, and then you are in uncharted waters. If there appears to be chaos out there, it’s that the business plans are not clear to the industry.”
Freston boldly announced plans to rejuvenate the Classics label — either by making changes or creating yet another, more commercially aggressive indie arm — and the studio had conversations with execs from Michael London to Bob Berney about joining the fold. But despite announcements of a brighter and shinier Par Classics, there have been no exec shifts, just a few acquisitions to beef up their slate.
Freston apparently wanted to give Dinerstein and Vitale the chance to prove they could make moves if they weren’t hampered by budget constraints.
The company’s slate of just six pics reflects a transition.
Beyond the big buys “Hustle” and “Mad Hot,” Par Classics’ releases are to include tyro helmer Josh Sternfeld’s drama starring Anthony LaPaglia and Allison Janney, “Winter Solstice”; the French import “Apres Vous”; the Colin Farrell-Salma Hayek-starrer “Ask the Dust,” and Patrick Marber-penned “Asylum.”
Over at Warner Independent Pictures, rumors of changes have consistently dogged the unit, headed by Mark Gill, with some saying that there are too many cooks stirring the broth, from studio brass to Section 8 co-head and helmer Steven Soderbergh.
As talk of musical chairs floats through the specialty ranks, Gill’s name has come up as one of a few candidates to run a rejigged Miramax. But Disney’s Dick Cook is said to be far from making any decisions about who may take the reins there and WIP says that Gill’s staying put.
Reflecting the schizoid nature of the specialty biz, the Warners arm has on its slate both the current release “The Jacket” and a French doc about penguins it picked up at Sundance.
To clarify their business plans, some studio divisions have taken a cue from Bob and Harvey Weinstein and created genre units a la Miramax and Dimension: Universal arm Focus Features announced a year ago at ShoWest that it would launch its Rogue banner.
The move enabled company co-heads David Linde and James Schamus to separate a slate that would have included both an Ang Lee-helmed lit adaptation that centers on a gay relationship (“Brokeback Mountain”) and a supernatural thriller starring “The Grudge’s” Sarah Michelle Gellar.
Searchlight seems to have managed being a banner where arthouse, urban and upscale genre fare have found a home.
But after the year in which it bought “Napoleon Dynamite” and “Garden State” – two pics held up as the poster children for why a studio needs a specialty division – the company oddly sat out Sundance as Rice headed to Oz to try and save the ill-fated, star-studded “Eucalyptus.”
It remains to be seen if the growing pains in specialty bungalows are a minor distraction or if the culture clash between the majors and their specialty arms actually gets sharper.