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Paramount Pictures is working on a “replacement plan” to secure new film financing should the promised payments on the $1 billion slate-financing deal with Huahua Media and Shanghai Media Group fail to materialize, Jim Gianopulos, Paramount chairman and CEO, said Saturday.
Speaking at the Bank of America Merrill Lynch 2017 Media, Communications and Entertainment Conference, Paramount’s new chief was asked about the Chinese deal that appears to have met regulatory hurdles.
“We haven’t received the money we’re entitled to under the deal,” Gianopulos acknowledged. “But we’ve been given continuing assurances that they’re processing it and going through with it.” He went on to say, “If it does not come together in a timely fashion, we have a great deal of confidence, based on overtures that have come to us and relationships that I and others have, that if it doesn’t work out, we would replace it in a timely and immediate fashion. We’re waiting to see how that plays out, but, very shortly, we’ll know and then enter into a replacement plan.”
Assessing the challenges Gianopulos faces as he engineers a Paramount turnaround — part of the larger turnaround that parent company Viacom is also attempting — the former Fox chief acknowledged that “2016 was a disaster.” He predicted that “2017 will be much better, 2018 will continue to improve and 2019, I think, is the first realization where you’ll see a very substantial swing in what we’re doing because there are already films in progress and plans in progress to realize that. The slate for ’19 is coming together and it’s brilliant.”
Gianopulos explained that he took the Paramount job — as opposed to a competing offer, he didn’t specify, to build a new studio from scratch — because it offered “the chance to be part of a renaissance of a storied institution” that has all the existing elements of a major studio but “just needs direction and strategy and some hard work.”
Among his immediate tasks, he said, are re-energizing and revitalizing the studio’s executive team, which he has done by bringing aboard such new execs as Mireille Soria, formerly of DreamWorks Animation, to oversee animation and Awesomeness TV founder Brian Roberts, who joined to run a new unit, Paramount Players, to produce films based on Viacom properties and appealing to younger audiences; cementing and enhancing relationships with creative talent; and taking advantage of the assets belonging to Viacom, such as Nickelodeon, MTV, Comedy Central and BET, since, he noted, Viacom is in 3.9 billion homes throughout the world and has access not only to talent and IP but also marketing potential because of its connections to its various audiences. Gianopulos added that he also wants to improve global distribution in all media, grow the studio’s TV business and look at the opportunities offered by new media.
The exec ruled out the idea of following Disney’s example by offering the studio’s own streaming service — at least for the moment. “For Paramount, at this point, a stand-alone OTT service is probably not something near-term for us,” he said. “It may evolve over time in conjunction with Viacom and other content owners, but there is no immediate plan for that.”
Gianopulos predicted, however, that premium VOD is probably just over the horizon. “I think it’s inevitable at this point — it’s now about what and when,” he said. “All the various stakeholders have come around to the idea that this is something that has to happen in part because consumers are demanding it.” Declining to say exactly how soon movies should be available in the home after opening in theaters or at what price, he said, “Now it’s incumbent on us to find the right business model and the right consensus on how to do it. We’re engaged in that fully with exhibition and with delivery platforms to find the best way to do it.”
Gianopulos didn’t sound fazed by this summer’s downbeat box office, saying, “I honestly do think it’s cyclical,” and observing that a drop in 2014 was followed by record years in 2015 and 2016 and that the first quarter of 2017 had been the biggest first quarter in history. “It’s the movies, stupid,” he concluded. With regard to sequels, Gianopulos explained,” You can’t just do the next one. You have to take advantage of the affection equity [that audiences have for a movie], but you also have to give audiences something fresh and new.” As examples, he cited Fox’s success in reviving the Planet of the Apes franchise by creating CG apes and the new life that J.J. Abrams brought to Paramount’s own Mission: Impossible and Star Trek franchises. And, while admitting that this summer’s Transformers: The Last Knight “fell short of expectations,” the exec said that the upcoming Bumblebee spinoff would take the franchise in a new direction and that James Cameron, who plans to oversee future Terminator movies from David Ellison’s Skydance Productions, “will take them to the next level.”
A seasoned hand when it comes to international distribution, Gianopulos also was bullish about the possibility of further growth in foreign markets, observing that most European territories have been consistently improving; that smaller markets like Malaysia and Latin America have become very vibrant; and that while the box-office growth in China has slowed and only grew by four percent last year, the box office commanded by movies from MPAA companies was up by 21 percent.
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