In Hollywood's economic drama, we all play the part of penny-pincher
EmptyFlubbed lines and Aretha Franklin's funny hat notwithstanding, Tuesday's inauguration was historic and euphoric — and for a brief, gaudy hour a welcome respite from the problems at hand.
But those problems show little sign of dissipating soon.
While D.C. was aglitter and atwitter, Wall Street got walloped and stocks fell to ever-lower lows on the big day. (The market rebounded minimally Wednesday, but then resumed its slump.)
In Hollywood, too, however Dem- demented its denizens, hype and hoopla couldn't carry the day. Not even "The Dark Knight" could forestall Warner Bros. brass having to lay off 800-odd employees; on the radio front, Clear Channel said it is forced to cut 9% of its worldwide staff. The parade lengthened through the week, with Disney taking the shears to its theme parks, Microsoft resorting to its first layoffs and Sony having to close factories and institute further belt-tightening. Sony chieftain Howard Stringer declared the situation "the worst in my lifetime."
So, mesmerizing as the inauguration coverage was, it's hard not to be transfixed by another kind of ticker tape — the one that scrolls relentlessly across the screen of business channels each evening with mostly down arrows — or by the news alerts sent to our mobiles: Another bank bites the dust; another Ponzi scheme is upturned; another automaker gets salvaged by the Italians.
Among the addictive shows is CNBC's "Fast Money," in which five high-pitched analysts diss the market in rapid-fire succession, pillory the mavens who have messed it up and argue about where an investor might hide. (You pretty much can forget about the media sector if you subscribe to their views.)
Is there any good news for us in Tinseltown? Perhaps the fact that prices are falling for just about everything isn't so bad.
Take Sundance, a festival where distributors traditionally are caught up in the fervor of the moment and overspend wildly for indie movies with limited commercial appeal. Those days would appear gone: Prices forked out this year by such companies as Sony Pictures Classics, Fox Searchlight and a raft of newcomers mostly were in the modest $1 million-$2 million range for North American rights.
That's good news for distribs, though it no doubt makes it harder for sellers to recoup. That's because they no longer can make up their shortfalls in foreign — a fact that will become even more noticeable during next month's Berlin International Film Festival, where the penny-pinching is expected to be even more painful.
Japan, which lately has seen audiences go bananas for local fare, is spending practically nothing to acquire rights to foreign movies from indie producers. The same is true in Spain, where piracy is so rampant it has undermined the indie market.
Prices are under pressure just about everywhere else, too, and beleaguered TV stations abroad (their ad revenue is down) aren't paying through the teeth, which means most indie product likely won't make its money back unless there's a deep-pocketed, patient investor onboard who took most of the risk. And even those don't come out of the woodwork very often anymore.
In short, whereas distributors seem to have tightened their belts when it comes to what they shell out for rights — President Obama says we all need to be "more responsible and accountable" — the folks making these movies will have to figure out how to bring them in on even leaner budgets if they want to stay in business or luck out with a breakout hit that makes up for a half-dozen duds.
It's not just on the indie film front that the call to be more cost-conscious is so insistent. It's happening at almost every level and in every category of the biz.
"We're all going to have to settle for less and just get on with it," one studio exec said the other day. "At least for a while."
Everybody I talk to sort of "gets it," and few are inclined to complain out loud about their jobs because at least they have one. Still, we're in Hollywood, and no one wants to be taken advantage of.
Least of all, working actors.
From what I hear from talent agents, their hardest job right now is convincing clients they won't get the $3 million-$4 million they thought they'd be worth after that studio movie they did two years ago.
"We're now talking about $500,000 or even just $250,000; in some cases, it's even less," is how one agent put it before adding, "I'm generally telling them to take the deal."
What no doubt doesn't sit well with some of these B-listers is that they constantly are bombarded with headlines about top stars who supposedly pull down megabucks for their movies and shows, either upfront or as a backend. (We rarely write in The Reporter about someone getting "just" $250,000 for a movie.)
But wait: Even that might be changing. Under their own pressures, studios are increasingly balking at big-buck payouts, first-dollar gross deals or ultrarich TV renewals for top-tier talent.
So, if it can be demonstrated that everybody in Tinseltown is feeling the pinch, maybe it's really not so bad.
And besides, isn't self-denial what Obama is calling for?
Elizabeth Guider can be reached at [email protected]