News
Paramount Indie Pullback Continues Trend
June 5, 2008 – The decline of the indie distribution sector continues with word that Paramount Vantage is being downsized, and a Wall Street Journal article (see link below) provides background.
Earlier, Time Warner consolidated New Line Cinema (Lord of the Rings trilogy) into Warner Bros. and is winding down Picturehouse (Pan’s Labyrinth), which was a New Line and HBO joint venture (see “Warner Shutters Two Indie Distib Units” May 9).
That reduces the number of major-studio owned indie units to eight, from a peak of 11. Par Vantage is only downsized, so the eight figure still stands.
A week ago, movie advertising agency Allied Advertising filed a lawsuit against ThinkFilms, which is a distributor not aligned with a major studio, alleging $4.2 million in unpaid bills. This is another indication of indie-sector travails.
One factor in the majors’ pullback is spiraling marketing costs. Major-studio trade group MPAA said that the indie arms of the majors averaged $25.7 million per picture in domestic marketing spend in 2007, compared to $17.8 million the previous year. Not long ago, it was under $10 million.
The indies also suffer from poor selections of what films to make, often going for edgy over what is profitable. Par Vantage distributed the early-modern business greed epic There Will Be Blood, which was an ideal vehicle for Daniel Day-Lewis’ over-the-top acting performance. But this anti-capitalist screed wasn’t a crowd pleaser when moviegoers have personal concerns about economic stability. The $25 million production grossed an okay $40.2 million domestically.
The spate of anti-Iraq and Afghanistan films – while many represent excellent filmmaking – all proved to be busts at the box office (see “Iraq War Films Flop With War Pro & Con Audiences” Dec. 7, 2007). Those were poor economic bets from the get-go, so no one should be surprised when the cutbacks follow later.
According to the WSJ article by Lauren Schuker, Paramount Pictures expects to save several million dollars a year by downsizing Par Vantage. Marketing and physical production is being absorbed by the major. Some 6-8 films a year will be distributed under the Paramount Vantage banner name.
Notes the WSJ article, more films are clogging the domestic theatrical market “driving up budgets, increasing competition and causing some studios to pull back from a business that once seemed so lucrative. A flood of nontraditional financing sources, from hedge funds to independent investors, has driven up the number of films released in theaters. ‘The business has gotten a lot more competitive, with a lot of new buyers and a lot more money in the space, and this is the best new organization for managing the business to an effective margin,’ said Paramount Picture vice chairman Rob Moore.”
For full text, click link below:
online.wsj.com/article/SB121260450801345757.html
