THR's Studio Chief Summit: 5 Execs on Firings, Franchises and Reflections on a Wild Year

This story first appeared in the Jan. 3, 2014, issue of The Hollywood Reporter magazine.

For top Hollywood executives, this has been one of the most challenging years in a generation, with seismic shifts rippling through the studios. It is a year in which the studios bet big on franchise hopes only to be met with some staggering failures -- notably Disney's The Lone Ranger, which led to a loss of about $190 million. It also was a year of instability that could be characterized as the March of the Suits. In January, Warner Bros. home entertainment chief Kevin Tsujihara, an executive lacking experience in film or television production, was named chief executive at the studio, leading film chairman Jeff Robinov, a contender for the throne, to depart. If the decision to promote Tsujihara shook the industry, NBCUniversal went even more extreme, abruptly dispatching Universal president Adam Fogelson in September and replacing him with Jeff Shell, a well-liked Comcast executive but such a newcomer to the movie business that many even at the industry's highest levels never had heard of him.

Under great pressure to improve its margins, Sony Pictures announced it would slash costs and cut back its number of releases even as it added seasoned executives: former Fox co-chairman Tom Rothman to revive the TriStar label and The Social Network and Captain Phillips producer Michael De Luca to be co-president of production.

In late November (before Paul Walker's death rocked the Fast & Furious franchise's home, Universal), THR sat down with Fox chairman Jim Gianopulos, Universal chairman Donna Langley, Disney chairman Alan Horn, Paramount vice chairman Rob Moore and Sony Pictures Classics co-president Tom Bernard for a wide-ranging discussion about the business and awards-season hopes as well as the challenges facing the world of independents as Universal reconfigures Focus Features, and Sony Pictures Classics -- one of the last art house labels associated with a major studio -- plots its future in a universe where its parent company cuts back.

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Some of you have had a big, troubled movie this year. Was there a point along the way when you realized a movie wasn't good?

ALAN HORN: You're not going to bring up The Lone Ranger again, are you? There's a scene in the movie where a character cuts another character, opens his chest and he takes his heart out and eats it. And I did say to Gore [Verbinski], "When we said we wanted heart in our movie, you weren't kidding." (Laughter.)

Are you trapped at that point?

HORN: First of all, it's hard to make any movie. I guess [2006's] Beerfest wasn't that hard, but it's hard to make any movie. The problem is, the process is sort of imperfect. The perception of the picture changes every time the variables change. It's going be directed by Steven Spielberg. No, it's Francis Lawrence. Oh, no, it's Chris Nolan. We're greenlighting based on a leap of faith.

Rob, you had one of the more spectacular saves of the year with World War Z, which you reworked. Is there a lesson in there?

JIM GIANOPULOS: Never lose hope.

HORN: They kept trying to improve the film, and I think they deserve a lot of credit for doing so.

ROB MOORE: There are a lot of times when you have a movie that doesn't work, and it may be unfixable. There are times where, however it happened, the characters didn't work or there was no chemistry of your cast. And that's nothing you can go back and reshoot. Here, you've got a movie where you could see where the audience got disconnected from where the story had been and what the filmmakers were looking for. It's rare that you're reinvesting $20 million in a movie that you've already shot.

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What developments over the past year have made you most concerned about the business?

HORN: When we evolved to a business strategy of having event movies like The Lone Ranger: When they are profitable, they're very profitable. When they work, they really work, and when they don't work, they are high-profile failures. So all of a sudden, they are making headlines on every medium. It doesn't mean that the strategy -- or the philosophy -- is flawed. But it goes with the territory.

GIANOPULOS: I think the difference is that we've allowed ourselves to make movies with budgets that exceed our comfort zone. The appetite of the audience -- and especially internationally -- for big-scale, effects-driven movies is greater than ever. Things have gone wrong throughout movie-business history -- it's just now the numbers are a little bigger.

MOORE: Part of the reason you end up justifying and deciding to make those big investments is, when it works ... you have two or three or four or six of those that come behind it. And so that's the trade-off you're constantly making -- how much you're willing to put in upfront, because in success, the global audience has continued to turn out for the big franchises and the big sequels.

DONNA LANGLEY: For the most part, I think franchises have been growing. But this year, we've certainly seen a couple that didn't work. It points to quality. With what's going on in television, and the quality that audiences are starting to enjoy there, I think it does put the emphasis back on the quality of films and the quality of storytelling in a big way.

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TOM BERNARD: One thing I've noticed over just the last couple of years is the movie-going experience is very uneven around the country. There's a new audience that's coming up that I think is trained to stay home. So I think that the exhibitors needs to step in there and create this experience so people want to go to the theaters again.

GIANOPULOS: That's a really good point. I think all of us have had those conversations with exhibitors. The only place we're asking audiences to sit stock-still and allow the movie to come to them, with no relationship to any external stimulus, is in the movie theater.

HORN: I believe prospective members of the audience ask themselves, "Do I have to see it now,and do I have to see it on the big screen?" And if the answer to both of those is no, I think we have a problem.

GIANOPULOS: To be clear, I'm not suggesting that we change the best way to experience a film, which is in a theater. But the conversation I've had is that when there's a kid next to me texting, and the phone lights up, and I'm focused on the film, that's annoying to me. When I tell him to stop texting, that's annoying to him. So I've suggested ... put him in the back row, find a way for people to enjoy their movie experience in their way and still not ruin mine. And then you've got two customers.

What is the reason for all the executive changes? In some cases, the studio actually was doing well, like Universal, which is having a record-breaking year.

BERNARD: It's cyclical. People get older. People have new sets of skills. Back in the old days, the people who ran the studios didn't have high school educations.

HORN: They also owned them. (Laughter.)

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GIANOPULOS: And they did pretty well.

HORN: You think because it's tougher and because there are more high-profile failures, that contributes directly to management turnover at the highest levels? I don't think there's any obvious linkage.

MOORE: We went through more than our share of turnover. And then we found a strategy that was working for the group of people who came together. And you're either then connecting with what's happening in the marketplace and you keep going. Or there are times when people go on a cold streak, and then people can't think of any other way to solve it but to change the management team.

LANGLEY: It goes beyond market share success. It's about profitability, and I can speak for my own studio. Our owners [Comcast] are here for the long haul. Our business fits very nicely into their portfolio. I think they were very happy with the way the movie studio was running actually.

So happy they fired the chairman?

LANGLEY: No. There are some big wins and there are some big losses. There's volatility in that product line, but the understanding is that that volatility is always going to be there. You can manage it as best you can, and you can make sure that you've got people around you who know what they're doing. But how do you manage the profitability? And how do you find profitability in a business model that is changing, with the DVD market in decline.

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Are you saying that Jeff Shell, who has no experience in the film business, brings a fresh outsider's perspective?

LANGLEY: Yes.

MOORE: And he brings trust. Jeff is somebody whom I happen to know from Disney who then had great success at Comcast. So then they trusted him in that job, no different than Jim trusting the people [Paul Hanneman and Tomas Jegeus] who have done great work for him internationally and putting them over at domestic marketing.

LANGLEY: And I would argue he comes to the table with television experience and was leading our overseas operation for two and a half years. He certainly comes to the table with a lot of expertise that is helpful.

HORN: I don't think we can overstate the importance of international as a component of the decision-making process. It really has represented the big growth opportunity.

BERNARD: Don't forget these are not movie companies anymore. They are entertainment companies. What's under that umbrella is diverse, and it's changing every day. I foresee gaming becoming a major part of the studios down the road. Half the people in the U.S. are gamers. Games are virtual movies. It's not just guys making movies anymore. It's much bigger.

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Tom, you have a parent company, Sony, that is looking to belt-tighten. How are you managing?

BERNARD: Our belt is tight. What we do is, we sort of go between the trees. We're like the swamp fox. When we have a film that we think is going to have a long tail, we go for that picture. In our world, we can stay in one theater for a long time because those theaters offer something to a specialized audience. We don't need a huge break in three weeks to make our money back.

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