01-24-2006, 12:54 AM
Quote:The "chatter" in and around the entertainment industry is increasingly consumed by techno-talk, but one very basic reality seems to be emerging: The major media companies are significantly reducing their financial commitment to the motion picture sector.
Substantially fewer films will be produced over the next year or two. And a significant portion of the production costs of the reduced slate will be borne by hedge funds and other investment groups.
Talk to the corporate hierarchs and you quickly elicit the thinking behind this pullback: Too many movies have been crammed into a market whose appetite for new product has obviously leveled off.
Sony believes a cutback in production is vital to clear the clutter in the marketplace. Disney is intent on pushing further resources into animation, ESPN and ABC to create new content for newly expanding digital platforms. Warner Bros. wants to focus more on big "event" movies and cut back those discomfiting "middle" films. So it goes across the board.
The economics of the movie industry have always been intensely cyclical. Propellants like the advent of video or the expansion of the international audience cause a sudden spurt in the revenue stream, to be followed by periodic lulls.
"There's little doubt," acknowledges one CEO, "that we are now in a lull."
While the major companies believe this is a time to trim their sails, investor groups ironically are reaching for their checkbooks -- witness the major financing deals announced only last week by Sony and Universal.
Hedge funds and other groups seem convinced that promising deals can be made with the studios to help underwrite film slates. The risks, to be sure, are high, plus investors must pay fees to the hedge fund managers and then absorb distribution and overhead fees from the studios.
The fervor of the hedge funds may also work against investor interests in that they may again spur an uptick in production. The majors, nonetheless, seem resolute on preventing this. The time has come, they feel, to tighten their belts. And outside investors clearly are making the belt-tightening a lot less painful.
Quote:Stars accept pay cuts as Hollywood profits dip
John Harlow, Los Angeles
THE Da Vinci Code is one of the most eagerly anticipated films of the year but its significance to Hollywood may go deeper than mere box office success: Tom Hanks has delighted his studio bosses by accepting a pay cut for his role as the book’s art sleuth hero.
Facing declining cinema audiences, Hollywood is trying to persuade its top actors to set an example by cutting back a lucrative arrangement known as “first dollar”, under which the director, producer and stars receive a share of a film’s box office take regardless of whether the studio has covered its filming costs.
Hanks had been expected to share 40% of the takings of The Da Vinci Code — to be released in May — with Ron Howard, the director, and Brian Grazer, the producer, in addition to their own fees. Instead, they will reportedly settle for 25%. Studios hope this will become the industry standard, claiming that this will leave them with more money to spend on the films.
“It all depends on how much the actor wants to make the film,” said one studio source. “Tom knows that Harrison Ford could have played that role wonderfully and maybe even cheaper.”
“First dollar” deals date back to the early 1950s when James Stewart first negotiated a share of the box office receipts for Harvey, a fable about a seemingly delusional man and a giant invisible rabbit. “That rodent will eat Hollywood,” said a Universal studio executive at the time, and he was right: the practice has since been commonplace.
No actors will publicly admit that they have lowered their price but industry reports suggest that Hanks is not alone. Cameron Diaz, who is second only to Julia Roberts in the female stars’ pay scale but still earns on average half a top male star’s salary, is said to have agreed to forgo her “first dollar” deal to star in a romantic comedy called Holiday.
Sony, the studio, said it had no choice after a number of recent box office disappointments and promised to make it up to Diaz in the future. “Let’s not get too weepy here,” said a Sony executive. “Cameron Diaz is thinking of the future and she is still getting north of $10m (£5.7m) for the two months’ work.”
According to industry reports, Disney also cut down on star salaries before filming two sequels to Pirates of the Caribbean. Johnny Depp is believed to have sacrificed his “first dollar” to allow the studio to afford Keith Richards, the Rolling Stones guitarist, upon whom he modelled his piratical performance.
In the end, Richards did not appear in the first sequel, Dead Man’s Chest, because of touring commitments and is unlikely to be in the second — but nobody expects Depp to be given a pay rise.
I dunno, I read this today, and I just feel like, they just don't get it. It's not a matter of a lack of quality movies being released; to me, it seems like the good film-bad film release ratio is about the same this year as was every other year. It's not a watered down industry, it's not paying actors so much, or the blockbuster costs of production.
The one reason why I don't see movies, nor have a desire to, is the fucking PRICE. Loews and Regal own every fucking theater in the country, and charge 10 bucks a ticket, with uber-over pricing on the snacks. It's the fucking theaters, and I hope they wake the fuck up and figure out ways to lower the price while putting out entertaining movies.
In the past, I wouldn't care about going to see a bad movie. Nowadays, I have to read every fucking review, to make sure I'm not throwing away 40 bucks on Resident Evil 2.
I could give a shit about the studios, but if they are worried about losing profits in theaters, they should be less focused on trimming down their content, and get these theater monopoly fucks to lower their fucking prices.