Exec gives dim industry forecast

Bill Mechanic says lack of consumer regard dents studios

Former Fox and Disney studio chief Bill Mechanic delivered a gloomy forecast for the U.S. movie industry -- studios and indies -- in his keynote speech Tuesday at the Independent Film & Television Alliance Production Conference in Santa Monica.

"Hollywood in the broadest sense of the word is much like Detroit," said Mechanic, a producer and CEO of Pandemonium. "It's a manufacturer's mentality that reigns, seemingly indifferent to the consumers it serves."

Mechanic said that since shifting from being a studio boss to indie production, he has seen that "the independent world was no more concerned with the consumer than the studios."

He said that while attendance was declining and revenue growth was a function of inflation, the number of movies made jumped as a result of an influx of hedge-fund money creating a glut of product, "most of it with no idea of who it was for or how it could be sold."

He added, "Whether some of these movies had artistic integrity or not, there is no question there was no audience appeal."

Mechanic said that since 1990, the number of movies made increased by half and since 2000 by 25% again, with most coming from nonmajors whose output rose from 150 pictures in 1990 to 450 in 2008. "That, my friends," Mechanic said, "is insanity."

In short, he concluded, we're left with "too many insignificant movies clogging our distribution channels" even as once "vibrant markets such as DVD and TV seemingly have evaporated in front of our eyes."

And more bad times are ahead, he warned. "The next two to three years will be even worse -- not because of the flood of new releases, since that is already abating, but rather due to the effect the oversaturation has had combined with the economic downturn," he said.

The good news is that the business isn't going away, at least for those who make the best products.

"It is a game for winners," Mechanic noted. "And those who win today will win to an even greater extent than at almost any point in the past. The flattening of the boxoffice is only true on a macro level. For the individual film, the sky is the limit.

"Those who will win will be smart about what they make and how they sell their films. They hopefully will make good films, but perhaps even more key (is that) they will make unique films that stand out."

Two successive panels Tuesday -- one moderated by Imagination Worldwide chairman Pierre David and the other by Cinetel president Paul Hertzberg -- dealt with some of the issues Mechanic raised, with glimmers of hope for indie producers if they come up with clever ways to appeal to consumers on the Internet and avail themselves of ways to market their movies virally.

VOD in particular holds out some promise, panelists suggested, as does clarity as to how to market one's work to the most appropriate audience.