Paramount Pictures and Warner Bros. Pictures are closing or retrenching four of their indie-style specialty distribution arms, after the majors rushed into low-budget, high-brow films in the 1990s. At that time, the majors emulated Walt Disney’s indie-diversification after acquiring Miramax Film.
“Lord of the Rings” was a blockbuster, but Warners downsized the film-trilogy’s originator New Line Cinema.
In recent actions, Paramount Vantage is being downsized. Across town, Warner Bros. consolidates corporate sibiling New Line Cinema (“Lord of the Rings” trilogy) into the flagship Warners studio. Further, Warners is winding down Picturehouse (“Pan’s Labyrinth”), which was a New Line joint venture with another corporate sibling HBO. And, finally, Warner Independent Pictures is being closed just after achieving blockbuster success with Antarctica documentary “March of the Penguins.”
That reduces the number of major-studio owned indie units to eight, from a peak of 11. Par Vantage is only downsized, so the eight figure still stands.
One factor in the majors’ pullback is spiraling marketing costs. Major-studio trade group MPAA said that the indie arms of the majors averaged $25.7 million per picture in domestic marketing spend in 2007, compared with $17.8 million the previous year. Not long ago, it was under $10 million.
The indies also suffer from poor selections of what films to make, often going for edgy over what is profitable. Par Vantage distributed the early-modern business greed epic “There Will Be Blood,” which was an ideal vehicle for Daniel Day-Lewis’ over-the-top acting performance. But this anti-capitalist screed wasn’t a crowd pleaser when moviegoers have personal concerns about economic stability. The $25 million production grossed an okay $40.2 million domestically.
According to a Wall Street Journal article by Lauren Schuker, Paramount Pictures expects to save several million dollars a year by downsizing Par Vantage. Marketing and physical production is being absorbed by the flagship Paramount Pictures. Some 6-8 films a year will be distributed by major studio under the Paramount Vantage banner name.
Notes the WSJ article, more films are clogging the domestic theatrical market “driving up budgets, increasing competition and causing some studios to pull back from a business that once seemed so lucrative. A flood of nontraditional financing sources, from hedge funds to independent investors, has driven up the number of films released in theaters. ‘The business has gotten a lot more competitive, with a lot of new buyers and a lot more money in the space, and this is the best new organization for managing the business to an effective margin,’ said Paramount Picture vice chairman Rob Moore.”
The now-shuttered Warner Independent Pictures is most famous for blockbuster wildlife documentary “March of the Penguins” (a 2005 release that grossed $77.4 million domestically) and Picturehouse distributed “Pan’s Labyrinth” (a late 2006 release that grossed an artbuster $37.6 million domestically).
Related content:
Leave a Reply