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This story first appeared in the Nov. 21 issue of The Hollywood Reporter magazine.
When IFC Films president Jonathan Sehring arrived at The Hollywood Reporter‘s annual film executive roundtable, he said he felt like he was sitting down with the Five Families. And for good reason. Sehring, 58, whose IFC is in the Oscar race with Richard Linklater‘s 12-years-in-the-making drama Boyhood, was invited to join Disney Studios chairman Alan Horn, 71, Fox chairman and CEO Jim Gianopulos, 62, Paramount chairman and CEO Brad Grey, 56, Universal Pictures chairman Donna Langley, 46, and Warner Bros. chairman Kevin Tsujihara, 50, all carefully guarded moguls who rarely appear together at one table. It has been a year of relative executive stability in Hollywood, though there is a sense that a wave of ownership change might be building, while the promise (and fear) of China looms larger than ever. The execs gathered Oct. 31 — without Halloween costumes — at Siren Studios Orange in Hollywood to discuss the poor summer at the domestic box office; Time Warner’s strategy amid Rupert Murdoch‘s bid for the company and the ongoing layoffs at Warner Bros.; Marvel’s battle with DC and the glut of superheroes; Netflix; and Universal’s plans for the Fast & Furious franchise without Paul Walker.
What is your biggest concern for your companies?
ALAN HORN I’m concerned about the proliferation of movies from my fellow studio people. (Laughs.)
KEVIN TSUJIHARA It’s challenging to find that much material for all of us. There’s incredible competition with television and with video games. And that’s not even considering the Internet content that you’re now seeing out there.
BRAD GREY The choices are so vast that it requires everything being unique, everything being authentic and everything being special. That’s what we strive to do, and that’ll keep you up at night.
JIM GIANOPULOS Great, creative content will always find its audience. But what we’re seeing is a great deal of media fragmentation and audience fragmentation. And that’s reflected in audiences’ attention spans. For a lot of content, you say, “Well, is someone — a millennial — more likely to watch 30 3-minute videos than my 90-minute movie?”
DONNA LANGLEY The change in consumer habits is putting this huge pressure on our business model. And not just from the home entertainment side but also on pay television.
Brad and Kevin, is Interstellar too long at two hours and 50 minutes?
JONATHAN SEHRING It’s longer than Boyhood. (Laughter.)
GREY I think the movie works, and I think the time works. We’ve all been through movies that felt too long and in fact were too long.
TSUJIHARA I don’t think the movie plays long at all.
SEHRING We look at those movies of length like events. We did Steven Soderbergh‘s Che, and we sold out the Ziegfeld [Theatre in New York] for two weeks straight for a five-and-a-half-hour movie.
LANGLEY I can watch 12 more hours of Boyhood.
HORN By the way, I once told Chris [Nolan] that he could double for Leo DiCaprio in Inception because he looks enough like him. So that can be a whole new career for him. (Laughs.)
TSUJIHARA And a new best actor category.
Jonathan can do day-and-date VOD releases without theater owners getting angry. Are the others jealous?
SEHRING Well, our biggest success in the past couple of years has been Boyhood, where it’s been a traditional model.
Why did you choose that for Boyhood?
SEHRING Because [theatrical is] still the most effective economic model in terms of generating a financial return. We had tested it a number of times, and it tested through the roof with theatrical audiences. We actually tried to replicate how specialty film was distributed 25 years ago.
Well, you waited 12 years.
SEHRING Thirteen, actually.
Kevin, Warner Bros. presented its DC movie slate on a Time Warner investor day. Marvel then presented its slate to a theater full of screaming fans. Does that speak to Time Warner’s agenda? A lot of people do get the impression that the company is looking to sell.
TSUJIHARA It was just about an opportunity to use that platform to lay out our plan for DC movies. I think, first and foremost, if I was wearing a hat, I’d take my hat off to Alan and Disney. They’ve done an amazing job on the movie side with Marvel, and I think it’s nothing short of incredible.
Are any of you worried about superhero overload?
HORN The term “superhero” has become sort of all-inclusive. But, in fact, I think there are delineations. Captain America is a spy movie to us, in many respects. Thor is a Shakespearean drama in some respects.
And what is Iron Man?
HORN Iron Man is a superhero movie. (Laughs.)
Donna and Brad, how do you get into this game? Donna has said that Universal’s monster movies are not competitive with the superheroes.
LANGLEY To Alan’s point, we have to mine our resources. We don’t have any capes [in our film library]. But what we do have is an incredible legacy and history with the monster characters. We’ve tried over the years to make monster movies — unsuccessfully, actually. So, we took a good, hard look at it, and we settled upon an idea, which is to take it out of the horror genre, put it more in the action-adventure genre and make it present day, bringing these incredibly rich and complex characters into present day and reimagine them and reintroduce them to a contemporary audience.
GREY We’re in the franchise game — whether it’s Transformers or whether it’s creating a new franchise with Teenage Mutant Ninja Turtles, which has gone beyond our expectations. So, we’ll continue to do that, and we’ll do it to the point where we’re making four or five of those franchises per year.
Speaking of franchises, Furious 7 will be the last one with Paul Walker, sadly. Does the series stand without him?
LANGLEY I believe it does. We think there’s at least three more. Paul is, and always will be, an integral part of the story. But there are many other great characters, and it’s also an opportunity to introduce new characters. I think it’s still a growing franchise. We’ll see what happens with Furious 7, obviously, but our box office has grown over the past three or four films and internationally, in particular. So we think that there’s more to mine there. But we’re of course very mindful about fatigue.
Let’s talk for a minute about China. Will a Chinese company buy one of your studios? And will it be Alibaba?
GIANOPULOS Well, first of all, we didn’t [just] discover Alibaba. It’s one of the biggest e-commerce and engagement platforms in the world, so we’ve dealt with them, mostly locally in China. I could tell you about our sensitive business discussions, but I don’t want these guys to know. (Laughs.) I can’t talk about this stuff in the press. Jack Ma is a lover of film and a true cinephile.
TSUJIHARA There’s no opportunity like China in the world. You look at the size of what that [box office] business is going to be in 2018 — I think the number is like $6.5 billion or $7 billion, and Alibaba is a great company. There are other great companies as well. All of us are going to look at every opportunity to try to build ancillary businesses.
GREY From our recent experience [with Transformers: Age of Extinction], we made China a priority.
But isn’t it frustrating that anywhere else in the world, you get back 40 to 60 percent of the box-office revenue, but in China it’s a smaller portion? If you get the money back at all.
HORN Marketing is much cheaper in China.
GREY I can’t tell you as I sit here today if we’ve gotten all the money back [from Transformers], but we certainly have no concern about the money, and we’ve been paid and will continue to be paid. I can get back to you.
Kevin, is there another bake-off going on at your studio among the three executives running the film studio, Toby Emmerich, Sue Kroll and Greg Silverman?
That’s certainly the perception.
TSUJIHARA It’s not.
A year from now, will you have the same structure? It’s unconventional to have a committee running a studio.
TSUJIHARA You have to find the structure that works for your company, and whether it’s unique to your company or it models after another company, I think you have to find what works. And it’s working. The performance of our movies and our slate is reflective of the teamwork of those executives and many others.
I want to go back to the Time Warner sale question. You’re laying people off, even at HBO, which is raking in money. It looks as if you’re gussying up for a sale.
TSUJIHARA No. We’re absolutely not gussying up for a sale. That’s a nice word. I gussy up for other things, but not for a sale. And we’ve gone through these types of layoffs before, as has everybody around this table. They’re very, very difficult.
Brad, your strategy at Paramount has been to make fewer movies. What are the benefits?
GREY On average, we’re releasing about 15 movies a year. Sometimes it will be 17, and sometimes it will be 13. It really depends on what pictures are ready at the time. That, for us, feels like a comfortable number. Our capital structure works for that. I think the advantage is that we have time. So when we run into trouble on pictures that don’t live up to the expectation that we had from the very beginning — which we do — we have time to work on those movies.?
Like World War Z.
GREY Well, there’s World War Z. And we had a challenge with Noah that we had to go and rework.
You tried to rework it, but Darren Aronofsky’s cut was the one that was released, right?
GREY I mean on a marketing basis. There were many Christian groups that came out and felt that the story Darren was telling was not the story that they knew or the story that they would accept being out in the world. And so we had to go out and have endless meetings and endless screenings to show people what we were doing and that Darren’s vision was simply a movie and it was his interpretation of what Noah was. There was one Christian group that came out and said that 98 percent of Christians will hate Noah. That was a big number. So we had to really work it. So it wasn’t in terms of Darren’s cutting, because Darren stayed pretty true to what he believed in, and we backed that.
Let’s not get carried away. You had your own cut.
GREY We backed it. So in the end, it was really about the marketing, and it was about how we got people to accept it.
Jim, on that point, some of the same people could now make noise about the Moses movie Exodus: Gods and Kings. How do you navigate that?
GIANOPULOS Well, we navigate it by being true to the story. There’s really not a lot of variation from it.
You’re dealing with three of the major religions of the world.
GIANOPULOS Well, but the good news there, and one of the things that I think was important to us in considering the movie — because it’s not a small budget, but it’s brilliant — is that Moses is the only character that I’m aware of that’s embraced by all three major religions, by Christians, Muslims and Jews. But each of them has a different perception. So I think that’s a matter of creative interpretation, but not creative in the sense of varying from the story but in telling the story in a way that manifests it cinematically. And I think there’s no one better than Ridley Scott to do that.
Some people exploit these movies as opportunities, right?
GIANOPULOS Absolutely, and I think there are going to be purists who say, “Well, I didn’t see that.” And, yeah, OK, but you’ll never satisfy everyone in that regard. It doesn’t have, with respect to Noah — which I thought was an excellent film — it doesn’t have the creative liberties that were taken in some respects in Noah. Even in limited aspects of it.
LANGLEY In some ways, the conversation can be helpful, too. The debate can ignite real interest.
Jim, did you, like Jeffrey Katzenberg with Prince of Egypt, meet with all the imams and the rabbis and the ministers and the priests?
GIANOPULOS We did, and we’ve shown it, and they’ve been very supportive. For the most part, it has been embraced and accepted and is actually aesthetically and creatively really loved.
This summer’s domestic box office was way down, while international remained strong. Are you alarmed?
TSUJIHARA There were a lot of factors that played into this summer, and I think that one of the things that we probably underestimated a little bit was the World Cup. Ratings in the U.S. for the World Cup were the highest ever. And, if my household is any kind of barometer, my kids, who have played soccer all the way through school, loved it and watched it religiously. It definitely had an impact.
GREY We did a billion-two on Transformers. We live in a world where the fact is that we do over 70 percent of our business now around the world, and it’s probably going to increase with China. All the choices that everybody had over the summer, as Kevin alluded to, probably took a toll on Transformers. And the length took a toll. But if Michael Bay is going to drive a $1.2 billion train for us, we’re very, very happy people.
TSUJIHARA You’ll probably sign up for that again?
Donna, you’re in business with Jason Blum, who makes many low-budget movies. You can stream them if they don’t feel theatrical, but there aren’t many digital outlets willing to pay for those types of films.
LANGLEY The model is evolving, actually. Even in the past 12 months, it has evolved. Our business model with Jason is pretty much covered by the overperformance of the one or two or three movies that we put into the marketplace, or at least so far — Ouija or The Purge, or we have a couple movies coming up that we feel very strongly about. But we’ve been able to bundle a couple of movies for Walmart and Netflix. Those platforms, they’re looking for their own kind of “event-ism,” and I think Jason is really looking at his movies to help fit those models. It’s evolving, and we’re still in a good place.
How long until you all join Jonathan in releasing films day-and-date on VOD?
GREY We believe wholeheartedly in the theatrical experience. We will always be in the immersion business.
GIANOPULOS You do have to respect the fact that there needs to be some exclusivity, or some uniqueness, to that experience in order to justify the continuity of it. But at some point, it may evolve. We’re still up against exhibition’s perception that anything that’s within an extended three-plus-month window is the end of the world, and I think that’s completely wrong.
LANGLEY It’s just going to be a matter of time. I don’t think any of us can sit here today and predict what the future is going to look like. If fax machines had the monopoly on sending messages and said you can’t send emails, well, guess what, the consumer would speak and say, “We’re going to send emails, it’s a lot easier.”
Netflix recently made some noise with an Adam Sandler deal. Is a movie still a movie if it debuts on Netflix?
GIANOPULOS This is another story that to me is not a story. HBO has been making movies for 30 years, and nobody cares.
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