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June 1, 2012

What’s Wrong With The Film Industry?

by Howard Suber

The resignation/firing of Rich Ross as Chairman of Walt Disney Studios, which I suggested was coming when I wrote a couple of blogs on the mentality that produced the disaster of John Carter several weeks ago, demonstrates another point I have made: that the average shelf life of the head of production at a studio in recent decades is in the range of 18-30 months.

An astute analyst of the film industry who had substantial investments in it compiled a list titled “What’s Wrong With the Film Industry?” which included the following points:

  • The constant turnover of the production head of the studio is disastrous.
  • The conflict and turnover caused by the buying and selling of companies causes  confusion, uncertainty, and weakens morale in the production areas.
  • Authority is not clearly defined.
  • Overhead is indefensibly high.
  • Budget estimates are not complete or accurate when shooting begins. Budgets are a joke, since they are exceeded with impunity.
  • Shooting schedules are disregarded; scripts are not ready when shooting begins.
  • The write-off on stories and contracts is enormous.
  • Screenplay costs are excessive.
  • Producers hold exorbitant contracts, and there is no relationship between a producer’s salary and the box-office success of his pictures.

To cap this analysis, the expert concluded that there had been too much ‘business’ interference with the production of movies. He made the revolutionary proposal that someone who had intensive experience actually making films be appointed head of production at each studio.

The expert I’m quoting is Joseph P. Kennedy, the father of the future president of the United States, John F. Kennedy. Joe Kennedy had been involved in major film companies such as Pathe and FBO (the Film Booking Office, which was absorbed into the RKO studios), kept Gloria Swanson as his mistress, and knew the industry well. The list above comes the 1936 report that Kennedy presented to the board of directors of Paramount Pictures, after they asked him to analyze what was wrong with the film business. [This comes from Leo Rosten, Hollywood: The Movie Colony/The Movie Makers. (New York: Harcourt, Brace and Company, Inc., 1941), Pp. 253-254.]

So, lest you blame Disney for its string of bad decisions, it’s important to recognize that this is an industry that has always suffered from mismanagement, whether at the top or in the production of individual films.Why are problems identified 75 years ago still with us today? Around the time Joe Kennedy delivered his report to Paramount, Louis B. Mayer across town was being paid the highest salary in America to head up production at MGM. Were they any better? Nope.  Why can’t Hollywood studios get it right? There are, of course, a multitude of possible answers, but I’ll just mention just one.When Apple came out with the iPod, it could clone millions of identical copies, as it would go on to do with the iPhone and the iPad. Although they constantly try, the studios cannot clone anything; every film is a new and unique product. (Well, as new and unique as any mass medium is allowed to be.) When Steve Jobs returned to Apple, he famously decreed that it would produce only four products at a time. That’s about how many new products are issue every month from a major studio.When the studio system was at its peak from the Thirties to the Fifties, each studio released, on average, a new film every week. And while there were blockbusters that cost a lot, they seldom onsumed the share of the studio’s overall budget and executive time that today’s blockbuster films do today.There have always been flops, but in former times a studio and the head of the studio could ride out those flops as long as they had a large slate of films to counterbalance the flop. In recent years, a single film can bring down the head of production, at is it did with Rich Ross,. Sometimes, a single film can even bring down an entire studio.

Fortunately for Disney (and all of the other studios), films only account for a modest percentage of the parent company’s income. However, that’s not so fortunate for moviegoers.








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