Boutique facelifts

Studios' specialty divisions reinvent themselves to compete in changing times

Update your address books … again.

The one consistent thing about the specialized film sector is that it’s constantly in flux. While the studios’ strategy of releasing lower budget films through “independent” labels is almost as old as Kevin Smith, the business has reformed anew in the last 12 months with fresh blood, fledgling companies and new-fangled mandates.

With new divisions at Disney, Paramount and Fox, major management shakeups at Universal’s Focus and Warner Independent Pictures, and New Line’s Picturehouse still getting up to speed, you could call 2006 a startup year. As Warner Independent Pictures distribution prexy Steve Friedlander says, “I tell everybody that WIP also stands for ‘work in progress.'”

“We’re still in our infancy stage,” echoes fledgling WIP prexy Polly Cohen.

Indeed, even though Picturehouse has been operational for just over a year, chief Bob Berney calls this summer’s sleeper “A Prairie Home Companion” the division’s first real film as a distinct arm of Time Warner/New Line. “It’s the one that we acquired and saw all the way through to release,” he says. “It takes time to get these things into the market.”

New formulas

Similarly, Focus Features, though celebrating its fifth year, reshuffled its executive ranks after losing co-prexy David Linde to Universal’s “Black Tower.” And newly titled CEO James Schamus says the company’s Rogue Pictures genre label is only now working at full capacity. “The big news for us on the domestic side is ramping up to handle the volume and the scope of the Rogue business,” he says.

Former Endeavor percenter John Lesher, newly installed prexy of Paramount Vantage, admits, “I’ve learned more in the past six to eight months than in the last 19 years of being an agent.”

But all these fresh starts don’t necessarily translate to immaturity. Instead, the revamped studio divisions are emphasizing new formulas: more inhouse productions rather than acquisitions and a deeper synergy with their parent companies.

“Because there are so many more mouths to feed,” says Friedlander, “you’re finding more films acquired before festivals at script stage, in co-financing deals or with completion funds.”

The new Warner Independent Pictures, for example, has a fledgling development fund aimed at bolstering production. “That allows us to develop and put in production things that we believe in from the get go, without having to rely on other outside sources,” says Cohen.

As Vantage’s Lesher puts it, “If you can work with great filmmakers on your own terms, then you should.”

Lesher also touts the many Paramount pieces — MTV, VH1, Comedy Central, BET, and Nickelodeon — that Vantage can rely on. And because of Paramount’s new ownership of DreamWorks, the division is also developing work with Steven Spielberg and Brad Pitt. “We have the benefit of the fact that big Paramount has producer deals with all these people, so I can use them to fill our own slate,” he adds.

And Fox’s new youth-centered Fox Atomic aims to capitalize on parent company News Corp’s recent acquisition of, according to Fox Searchlight and Fox Atomic topper Peter Rice.

The dependents also work closely with the studio’s international arms.

Miramax’s Daniel Battsek, formerly managing director of Buena Vista Intl., notes the close relationship between his former and current Disney units. “We’ve been able to make sure that Miramax Intl. and Buena Vista Intl. are synchronized,” he says. “We work together on marketing material, so instead of handing the movie over to them, they start at the same point we do.”

Increased synergy

Focus’s Schamus explains, “We look at each individual film, and rather than say, ‘this is a Focus movie or this is a Universal movie,’ we say in every single territory ‘what is the best thing for a film?'”

And given the breakup of Universal’s international arm UIP, Schamus says the working relationship between studio and division has become “more dynamic,” he explains. “It increases the points of collaboration and decreases any sense of monolithic or cookie-cutter approaches to the business.”

The corporate cross-pollination also works domestically. Lasse Hallstrom’s “The Hoax” was originally set up at Disney’s Touchstone, for example, but after discussions, the companies decided it was more suited for a Miramax release.

It goes both ways. Warner Bros. recently took over WIP’s “The Astronaut Farmer” for a wide release after deciding the film had enough mainstream appeal.

Fledgling WIP chief Cohen is a veteran of the WB, having worked in different capacities at the studio for over 10 years. After joining the specialty division in May, she has rejiggered much of WIP with new execs. “I have the benefit of being able to put us in a position to get what we need from the parent company,” she says.

During Paramount Vantage’s start-up months, Lesher notes he received publicity support from Paramount marketing prexy Gerry Rich and continues to collaborate with Par creative advertising senior veep Josh Greenstein on Oscar bait “Babel.”

Speaking of Vantage’s close association with big Par, Lesher says, “I talk to Brad (Grey) about everything we’re doing. If I want to acquire or not acquire a movie, he’s involved. But we still have the ability to do what we want.”

Sony Pictures Classics veteran Tom Bernard isn’t sure the new studio units have the freedom that they claim. “The studios slowly absorb them and make them mirror images, so you have a lot of divisions that look like what TriStar was to Sony or Hollywood Pictures was to Disney. They’re just creating another product for the studio system.”

Indeed, with overall belt-tightening in the age of flattening DVD sales and Internet rivals, the nimbler and more cost-effective specialty divisions may be the studios’ best tools for survival.

“As people have infinite choice and total control of the way they want to be entertained,” says Rice, “it’s becoming increasingly difficult to find movies that appeal to everyone. Therefore, it’s about recognizing smaller niche audience. And you don’t have to gross $100 million to be profitable.”

Then again, indie veteran Schamus says the specialized companies are in no better shape to deal with fast-changing economies and technological shifts: “We live in the shadow of ignorance about what truck is about to hit us as we step out into the street as much as everybody.”

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