Week Of July 17, 2006 -Mon / Wed / Fri

July 21, 2006

Enough drama this week to wear me out. I am due in San Diego by noon, so I am on a tight column leash.

The things that no one seems to want to write about regarding the Oren Aviv ascension at Disney - since 95% of what has been written and said by Disney types, including Oren, has been said already - are:

1) Nina Jacobson will walk away with millions of dollars to settle her contract. I don't know exactly how things played out, but it would not be unreasonable to say that Ms. Jacobson chose the delivery room moment of her ultimate execution and passed on various other ways of doing this, offered by Dick Cook.

2) The rise of marketing is a big story… but the rise of the power of the international departments at studios, which is not as much in the daily psyche of beat reporters, is an equally significant story. Just as Oren follows Mark Shmuger to the throne, Mark Zoradi, previously President of Buena Vista International, follows Jim Gianopulos and, to some degree, Jeff Blake to the top of the studio food chain, now in charge of all marketing and distribution for Disney worldwide (that includes the U.S.)

3) Pixar. It's as though that purchase had no influence or was not part of the infrastructure for this occurrence.

4) The number of films to be released by Buena Vista each year as a result of this "revolutionary" action has crept up daily from 8 to 10 to 13. Why any studio would need to release more than one film every 3 weeks (14 a year) is beyond me. Yes, the Miramax arm is there for another level of movie, but that business has hit the skids at every studio in town except Searchlight (Paramount Vantage is spending more than Searchlight or Focus, based on greenlights to date), so the value of maintaining that business, aside from DVD, is negligible and surely will be revisited regularly in the years to come.

The truth of the matter is that every studio in town, except maybe Fox, would love to thin out the herd and reconsider major elements of their studio game plan. It is very hard to make changes incrementally in this business. It's not even a matter of one exec or another being so much better than another. When seismic studio events like this occur, choices can be made, even when the choices involve losing some very high quality talent that just doesn't move the right way for the studio's future. But even something like changing a production chief or a head of marketing doesn't always make that much of a difference because the rest of the folks who got used to a certain style are still there, fighting change, if even subconsciously.

The situation at Paramount, with the infusion of DreamWorks talent, is fairly exceptional. And it still has people on all sides of it more than a little antsy. The reason that all the bloodletting is required in this new combined studio is that Paramount wasn't doing great when the merger happened and when you make a lot of change when doing poorly, the perception is that you are desperate, even if the changes make great sense. On the flip side, when you make change when you are on top, as Disney is now, it's daring and progressive.

The irony is that the film business is not run like other businesses, no matter how massive the conglomerates that own the studios become. The drama is much higher and the returns are much lower. Lots of people get rich working in this business, but for the studios and their owners? Not so much.

It is crazy. Why did it take so long for Disney to "greenlight" (since they are in partnership with Phil Anchutz, there is no unilateral greenlight) the sequel to Narnia? Because $745 million simply wasn't a distinct enough success. The first film was every bit as expensive as a Harry Potter film or the first Rings, but it didn't do those numbers. It did a lot and it generated over $500 million in returns in rentals, DVD sales, etc. But what of the next one doesn't do that and they spend even more money?

Why will Sony release the next Bond film in Summer instead of fall for the first time since 1989? Well, Bond had been a mostly summer series. But that 1989 film, License To Kill, was the first Bond film in fifteen years to drop under $35 million in domestic gross. Back to Fall, on to Pierce Brosnan, on to $100 million domestic grosses. But, as Pixar decided after The Incredibles and Monsters, Inc, the Fall numbers for franchises, except for Harry Potter, just don't seem as good as in summer. So even if Casino Royale breaks the domestic record and kisses $200 million, the hope will be that by opening the summer in 2008, it could open to more than $80 million and gross more than $250 million.

That is the new paradigm… now that they have decided to chase the dollar with pre-sold product and gotten really good at it, it's time to maximize even more. Disney, Fox, Paramount, Sony, Universal, Warner Bros. Six studios. 52 weeks. 4 truly crappy weeks or so. 24 summer and holiday weekends that can support more than one opening. That's 12 movies per studio. Hmmm….

The reason Disney has "everyone" freaked out is that it is a big picture move in a small picture industry. But you gotta know… the guys with the money… all about the big picture.

Have a great weekend. Be careful with your ticket buying dollars out there.

E Me.

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