Week Of April 9, 2007 - Mon / Wed / Fri

April 9, 2007

How Much Is Enough & Who Can Get It?

We are in the early stages of the Hollywood Gold Rush of this decade.  By this time next year, I would expect that the studio business is going to look very, very good after years of looking like it's teetering on the edge of real danger.  That danger will not actually be gone.  But compared to the killing field littered with the bodies of very smart, savvy, aggressive businesspeople who try to buy their way into Hollywood, the stability of a studio will look great.  And that's about when Universal and Sony will end up being sold ... but that's another column for another day ...

The first guys to get the big greenlight in the Gold Rush were the Weinstein Bros, who turned down a big, albeit significantly reduced, deal with Disney in order to build their empire their way.  And now, with Grindhouse, their big gun, reduced to a breakeven or slightly profitable proposition at best, reality will set in and set in fast.

There is plenty of "what happened?" discussion on The Hot Blog, so I won't bother getting into that here.  But this was the first epic publicity effort for The Weinstein Company.  They worked it and worked it hard.  There were public appearances at awards shows and wrestling matches and auto races.  There were events at film festivals and talent on the road and Midnight shows and an L.A. revival house turned grind house.  There was a Tyra show with lots of girl laughs and foot fetish and at least one star and/or director on every late night talk show.   They worked it like a classic Weinstein effort from the old days.

And it didn't work. 

Not well enough.

The thing is, we have to consider what is realistic for non-major studio releases ... and in the studio releases, I include The Dependents, which have a great advantage with the assets of the big studio available to them in many ways. 

117 films grossed $20 million or more last year.  12 of them were from outlying companies.  And in that group, I include MGM/The Weinstein Co, which have not been set up as true full service studios, in spite of MGM's MPAA status.  Weinstein Co has a full group of staffers but for budgetary reasons they have not been able to hire many people on the top of the food chain, an advantage that the majors have - no matter how talented the young Weinstein group is.  And MGM has outsourced marketing and publicity responsibilities, only recently starting to staff up more seriously.

But I digress ...

Lionsgate had half of the 12 over-$20m films.  The Weinsteins had four, split evenly between TWC and Dimension.  Yari had one (The Illusionist) and MGM has one of its own (Rocky Balboa).

Four of the films grossed over $50m ... all four were sequels (Scary Movie 4, Saw III, Rocky Balboa, and Madea's Family Reunion).  Of the other eight, five were heavy action or horror (Hostel, Crank, The Descent, Lucky Number Slevin, and Pulse).  The final three were The Illusionist, Lionsgate comedy Employee of the Month, and Kevin Smith's Clerks II.  These were the most rare of all.

So what can we really expect of these companies?  And with more companies to come, what can they expect?

We're very cut and dry in this world about winners and losers.  But while phenoms, like My Big Fat Greek Wedding, sometimes happen, the deck is pretty well stacked against the new independent distribution channels.  For all of our deep abiding faith in the marketing genius of the Weinstein Bros, they simply don't have the tools they once had.  The theory was that QT & Rodriguez were living franchises ... and to some degree they are.  The same way $24 million was pretty damned good for a Kevin Smith Clerks sequel, $30 million to $40 million domestic gross for a grindhouse homage seems pretty reasonable.  Unfortunately, the movie they made was too expensive for that number to be ok.  Perhaps the most surprising thing is that the Weinsteins didn't make the Kill Bill call and split it into two more easily digestible halves.

The more muscular newcomers are Fox Atomic, which obviously is part of a major but is trying to experiment with some new techniques to build and market their genre/teen product.  And, more in the Weinstein mold, but not, is Overture Films, which is essentially building a full service distribution company with acquisitions and a few original productions.  But with Chris McGurk, Danny Rosett, and Peter Adee on top of the food chain of the John Malone/Starz owned company, there is more top talent watching the store than anywhere else.

And the wave of product is coming as group after group seems to get the seminal $200 million in funding ... money that needs to be spent to make movies and to make them soon.  How many $20 million budget movies can dance on the top of a pin?  Good question.

"Where is the best place to take my movie?" is a question that hasn't quite settled into the mindset of the higher priced indie world yet.  Yes, as always, anything can happen.  But if your aspiration for a movie is to gross over $30 million domestic, getting a major studio release is critical.  Of course, with that bigger machine, they handing marketing and publicity on a bigger level and really don't know how to aim lower.  So your costs increase as well.  And for independent producers, there is the bigger mind fuck of knowing that a studio relationship means a windfall opportunity is much more distant than if magic happens independently.  So which is it?  Which of Sophie's kids goes away with the Nazis?

As I have indicated, I think that studios are going to be in an even more advantaged position in a year or so, when all of these production funds start kicking out movies that need distribution.  How will MGM respond to life without a Showtime deal?  How much will Overture's Starz deal and above-the-exec-line talent mean to their success as a new distributor? 

And while we sweat so many things about the future, it seems we will be reminded by the critical value of powerful distribution.  There is so much content.  There is so much competition.  And with front loading at the box office so in control at this time, marketing and distribution trumps the content itself. 

Would it be a failure of the Weinsteins became another Imagine or, for arguments sake, year 2003 Miramax?  I don't think so.  Building a distribution machine is very expensive and very difficult.  It has become an institutional business.  Anyone with the money and access to talented people can make a movie.  But wide release distribution is not something you just walk into ... even if you can luck into a success or two.  (Yari will face a big test this summer trying to replicate the success of The Illusionist with Resurrecting The Champ, which is also a movie for adults with an awards discussion performance by Samuel L. Jackson.)

Racers, start your engines ...

E Me.

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