Commentary: The world's slings and arrows have put Hollywood flat on its back

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I was lying under a bone-density scanner the other day, a great position to be in for realizing just how topsy-turvy things are. There I was staring up at the General Electric logo, marveling at what these medical machines can do nowadays, while remembering how bone-shattered that conglomerate's stock is, down to about $7 a share from an all-time high of $60.

As is about every other media- or entertainment-related stock I could think of.

Who would have thought such iconic companies as GE and General Motors would be brought low by such basic but unglamorous things as subprime mortgages, pension obligations and lending practices? Or that little red snail-mailed envelopes (Netflix) or a comic book purveyor-turned-film producer (Marvel Entertainment) each would be worth about as much on paper right now as, say, a CBS?

The world is upside down, and no matter how many media panels we go to or pundits we listen to, no one seems to know when it will turn right-side up again, or what right-side up will look like when things improve.

This upending of the economy has to be frustrating to Hollywood entertainment execs, who even before the recession were under pressure to retool their business models in the wake of Internet encroachment, DVR penetration, the popularity of video games and changing lifestyles.

In the case of NBC Universal and Sony, the entertainment divisions are feeling additional pain from unrelated parts of their parents' businesses rather than strictly their own activities. In NBC Uni's case, neither "The Office" nor "30 Rock," "Mamma Mia!" nor "Milk" can compensate for GE Capital's missteps; likewise, no "Spider-Man" or "Green Hornet" will rescue Sony Pictures from flat-screen fizzles in Japan.

The stock market is reacting to irrational pessimism in the same uncontrollable way it responded a few years ago to irrational exuberance. No movie, be it "The Dark Knight" or "WALL-E," or TV show, be it "CSI" or "The Simpsons," can shield a studio from the slings and arrows. And takedowns in the media ricochet: That erstwhile epitome of fiscal probity, Tribune Entertainment, will end up paying pennies on the dollar to its studio creditors.

Fortunately, there are some smart moves being made in Hollywood.

Such digital-platform plays as NBC-Fox's Hulu and various studios' new venture ZillionTV might well pay off as the Internet matures, but so too will some old-style strategies.

Think unflinching focus on the brand. As more content -- professional or user-generated -- becomes available whenever and wherever, breaking through the clutter becomes ever more paramount in order to be profitable.

And what do people, especially in these times, gravitate toward? Predictability.

If they're young, red-blooded males, they want to know they're coming home to watch some kick-ass actioner, so it's up to Spike or USA or FX or whoever to satisfy that desire and be the destination of choice. Or, if they're families with young kids, tired after a long day at work (or looking for work), they want to tune in wholesome fun, so it's up to Disney Channel or Nickelodeon or whoever to entertain the tykes without shocking them.

You get the point.

As Hallmark CEO Henry Schleiff put it during an HRTS panel this week, "You get up one day and you don't have a job, or you get up one day and you eat peanut butter." In other words, folks could use a little pre¬dictability in the brands with which they choose to relate, and the best brands know these tastes and cater to their audiences.

Entertainment types also are rethinking relations with advertisers now that projections suggest DVR penetration, and hence ad-skipping, might hit 60% of U.S. TV households within two years.

Product placement is so last century, having yielded rapidly to product integration. An upcoming Lifetime miniseries titled "ManEater" is Unilevered to the hilt, even while NBC's comedy "30 Rock" manages to mock its reliance on the practice.

Finally, Hollywood content of all caliber is being mashed, milked or metamorphosed to wring every last dime from it.

Seeing what happened when the musical "Mamma Mia!" was reinvigorated as a movie, who can be surprised that super chick-flick "Sleepless in Seattle" is being re-imagined as a Broadway musical?

And, untrendy as domestic syndication is, studios are considering taking the unlikeliest of shows to the rerun market -- even reality fare, which always has been dismissed as having little backend potential.

Look closely at what Fox has managed with "Idol Rewind," which after four seasons of respectable ratings demonstrates that a little clever editing can breathe new life into -- and extract additional coin from -- a property that seemingly had exhausted its potential.

In short, however dizzy Hollywood might be from the roller-coaster recession, this is no time to dither.
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