STATE OF THE INDUSTRY, PART ONE

As usual, the week of the annual ShoWest exhibitor’s convention in Las Vegas must be noted by industry trend watchers… but not for the usual reasons.   The $25 million purchase of the show two years ago by media conglomerate VNU, which also owns The Hollywood Reporter, has turned out to be one of the great missteps of recent Hollywood history.  (On the flip side, it is one of the few happy stories for the National Association of Theater Owners, the seller of ShoWest, in the last couple of years.) 

The studios, which had traditionally lined up to fill the four-day convention with lavish, star-laden lunches and dinners, have been suffering through extreme belt tightening at the same time VNU and the Sunshine Brothers, who have been contracted to operate ShoWest, hoped to expand the convention.  Additionally, the new for-profit nature of ShoWest eliminates the “we’re supporting the industry” argument that studios used to make when agreeing to spend what could be argued to be excessive dollars on a promotional event. 

On the other side of the aisle, many exhibitors are in some form of bankruptcy  - or just coming out of that chapter – and can’t afford to attend the convention in traditional numbers.  Worse, many of these exhibitors are being gobbled up by a small group of buyers, eliminating the need for a convention in a world where a handful of people will control over 90 percent of America’s movie screens.  In other words, elaborate events for a few hundred is likely to replace this event, which drew thousands in its heyday.

But ShoWest becoming irrelevant is a blip in the industry radar.  No, the big news was happening back in L.A. 

I’ve been out of town for about six months and the landscape of my return is quite scary.  It’s almost as though the studios have been taking practical sets (fully built spaces that can be shot from inside and out) and scraping away at the inside until nothing is left but pure facade.  Of course, this process has been under way for a long time.  But the studios have managed to keep the facades freshly painted and appealing to the masses.  The thing about the last six months, which is the tail of an eighteen-month cyclical downturn for the entertainment business, is that the masses seem to be more and more able to see the cracks.  And the businesses, getting a little desperate, are beginning not to care.

As the industry leader in synergy, Disney remains the best story out there.  The company has done an excellent job of keeping the media’s eye on individual sagas.  But like the Mickey Mouse March, if you put all the letters together, you get a very clear message. 

With all the talk about Letterman vs. Nightline, it strikes me as funny that we didn’t all see this coming.  Just a few years ago, before Millionaire and Survivor, the hot trend was to have as many hours of “news” programming as possible.  There were seemingly endless Dateline NBCs, multiple 20/20s and Primetimes and even 60 Minutes II.  This must have seemed a happy trend around New York’s newsrooms, but someone forgot to check the subtext… the line between news and programming was gone. 

In this context, the hire of Richard Roeper makes perfect sense.  After a year of critics subbing on the program, the choice really came down to Richard and Michaela Pererra, two non-critics who did television well and who looked good… people that Disney could try to build an expanded audience around.  Like Politically Incorrect, Ebert’s is a program that is unique in the industry with an established and loyal following.  But it is not a major moneymaker.  Audience loyalty to Ebert is set in stone.  The show would not drop off the map so long as Roger and his thumb were in place.  Who would give the Disney marketeers the best shot at a home run?  The answer came up Roeper.  After one season in which the show stabilized, but didn’t soar, the studio started developing a new look and feel for the show.  Ebert will have his job for as long as he wants because he cannot be replaced.  There is no one else even on the horizon at this point.  There is no David Letterman, no John Madden… not even a Kelly Ripa.  As far as Richard goes, given the Disney mindset, he was absolutely the right choice.  But once they got past the heat of battle, it must have occurred to them that there are other, even more sellable Richard Roeper types out there.  I’m sure that there is some exec over in Fortress Disney kicking him/herself over not bringing in Steve Kmetko for a tryout in 1999.  How did they miss out on Carson Daly?!?!?  But so long as Disney has a hold of the syndication slots it has with Ebert, the show is safe.  As great as Roger is, it has nothing to do with quality.  It has to do with business.

The Ebert franchise is quite specific.  But there is another trend developing as the conglomerates conglomerate.  Again, it started with the news divisions.  Studio/Networks are taking franchises and riding them to the point of burn out… the same way studios are riding theatrical distribution into a shorter and shorter, hotter and hotter burst cycles.   

Who Wants To Be A Millionaire was the hottest show on TV… until it went to 4 shows a week.  Survivor has stayed strong, despite being thrown up against Friends, with just one show a week in most weeks.  But Big Brother has remained a slight disappointment, demanding near constant attention. 

Deal after deal is being made for series to run on cable platforms in the same week they premiere on their home network platforms.  NBC already runs week-old Tonight Show and Conan O’Brien reruns in the middle of the night.  The Today Show is now 3 hours long.  Later runs on E! a few days after first airing on NBC.  The View just did a deal to run same day.    Of course, all these shows are time-sensitive, so the ability to exploit them this way is the ability to generate new revenue. 

But what about the shows that have always been fodder for syndication?  Saturday Night Live will now run on E! on a year delayed basis… which is necessary so that NBC can get their second use out of every episode.  Fox’s FX channel has been the subject of multiple lawsuits, as its been loaded with just-off-the-webs programming owned by Fox.  But, just for good measure, you can watch Buffy and The Practice and NYPD Blue on network and cable and syndicated TV.  What will we do when the shows are actually cancelled?  Will there be any life left to suck out of them?

The Universal-produced Law and Order is currently running on NBC and on two cable nets, Arts & Entertainment and Time Warner’s TNT.  The other Law and Order spin-offs are both running on NBC and Universal’s very own USA Network.  In fact, the original Law and Order was the program that launched this whole trend.  Universal sold the show to A&E for relatively little money since the hour-long syndication had long gone into the toilet.  Little did they know that one series could become a cable signature and that L&O’s audience was so incredibly loyal. 

Within a few years, TNT was re-launching as the “We Know Drama” network, with current network dramas including Law & Order, ER, NYPD Blue, Charmed and their original show Witchblade taking up eight hours of every normal weekday.  Old movies and a variety of “classic” hour-longs make up the rest of the programming day.  Soon, The West Wing will start its run on TNT.

So what does all this have to do with the movies?

Well, the move to make compromised art into pure commodity started a long while ago.  But what has changed is that as each year goes by and the multinationals do a more and more thorough job of squeezing every dollar out of the “product,” profits continue to drop.  No one wants to believe that film and TV is a bad business.  But it is.  As margins on the film side have shrunk, the TV side of these studios have become the profit engines.  With the rules of the television business changing to allow the studios to have partial ownership of the product that airs, the studios that don’t own networks have become the odd men out. 

More tomorrow…

Page Two Copy:  Miami & Oscar Rumblings