Hollywood Babble On & On #180: Paramount Gets Too Big So It Becomes Too Small

A tip of my jaunty sombrero to the always ebullient Nikki Finke for reporting that venerable mega studio Paramount Pictures will, in the aftermath of financing troubles, the loss of Dreamworks and other ominous portents, will only be releasing around 20 films a year, several of them made by outside producers, like Marvel Studios. This follows soon after a similar announcement by Warner Bros, that they too were cutting back their production slate, to just a few more than Paramount's proposed output, with their DC comics properties at the centre.

One of the reasons cited for these cutbacks is a so-called "glut" of movies, but how could there be a glut, when all of the major studios are already releasing half the movies they used to, and showing them on more screens, than their Golden Age predecessors would even conceive of. You see, back in the Golden Age of Hollywood, the each studio released over 50 films a year on average. If a studio didn't have a film opening scheduled for every week of the year, then they weren't considered much of a studio.

So how, in this age of unprecedented studio size and strength, are the studios ending up doing less and less. Well it all comes down to size.

Paramount started life in the 1910s as the distribution arm of the Famous Players-Lasky Company, and within just a few years had become a major player in the fledgling movie business. In fact, most early Hollywood history of the 1910s and 1920s are stories of people affected by, and/or reacting to the actions of the fast growing Paramount company.

Now things didn't always go smoothly, Paramount faced bankruptcy in the 1930s, but recovered and prospered under fresh management throughout the rest of the 1930s and 1940s. The consent decree of 1948 cost the company its vast theatre network, and its confused response to the advent of television, investing in the medium early, but then getting out early as well, had put the company into a period of decline in the 1950s through to the 1960s.

The company would eventually be bought by the Gulf + Western conglomerate, whose head Charlie Bludhorn, surprised everyone by appointing an actor turned neophyte producer Robert Evans as head of production in the late 1960s. Evans turned the company's fortunes around with everything from the treacly Love Story, to the off-beat chiller Rosemary's Baby, and the mega-hits Godfather Parts I & II.

And that marks the beginning of why Paramount is in the situation it's in.

The 1970s was a period of incredible transition in the movie business. Films like The Godfather, Universal's Jaws, and later 20th Century Fox's Star Wars, showed that movies could make huge money and become massive cultural phenomena. Larger corporations were formed during the merger mania of the 1980s and 1990s, with movie studios going from being big fish in the movie pond, to becoming massive whales swiming the larger lake of the media business. Studios became media conglomerates, owning TV networks, specialty pay & cable channels, book publishers, record labels, etc... etc.... everything was about buying, starting, or otherwise expanding outlets for content.

Meanwhile, the amount of content produced began to shrink. They began making fewer and fewer movies and television shows, and thus their outlets became dumping grounds for constant reruns, and shoddily made reality shows scraped off the underbelly of cheap European television.

But why did this happen?

Well, because of blockbusters.

You see, when you're a big media conglomerate, you can't just make movies that are profitable. These films have to be huge, they have to be bigger than huge, they have to be blockbusters. That means high concepts (simple yet catchy plots), heaps of special effects, and more stars than the sky. Their films can't just make money on their own terms, they had to crush all competition and hold that precious number 1 slot on their opening weekend. The idea of a sleeper, a film that becomes profitable through a long theatrical run with healthy ticket sales, becomes anathema, everything has to be quick, and it has to be huge.

And in order to be huge, you have to spend huge. So more and more money get spent, on fewer and fewer films, which is okay, because these new conglomerates have deep pockets. Profit margins grow thinner, so old practises of burying, hiding, and otherwise squirrelling away those profits, becomes extremely widespread. Star salaries rise to a level that makes the housing bubble look reasonable, and with that budgets get even bigger, margins thinner, accounting shenanigans more frequent, and focus on that all important number one slot even narrower.

Smaller budgeted films mostly become a loss leader, with many of them being nothing more than pet projects feeding the egos of certain stars and producers with critical praise and occasional awards, rather than being a self-sustaining part of an economically viable industry. The studios like them, because these failed films, usually financed with other people's money, makes hiding the profits of those precious blockbusters even easier.

However, this is another one of those situations I call a self-fulfilling idiocy. Bad business practises make big movies more expensive, while smaller films become monetary black holes, and soon you hit a wall. The studios just can't make movies the way they used to, investors are scared away, money tightens, audiences start to diminish, ironically distracted by the thousands of new media outlets these same corporations made possible, and it becomes harder and harder to make films capable of hitting that precious number one spot, and even if they do, they could still fail to make money, because they cost too damn much.

So you end up with major studios forgetting that they're in the business of making movies, and go into the business of coming up with excuses to not make movies, because they've dug themselves into a hole, and they're too fat (in a corporate sense) to get out of it.