Tuesday, 22 January 2013

Hollywood Babble On & On #893: Miramax Loses A Partner

Construction magnate Ron Tutor has obviously tired of his run as a Hollywood mogul and sold his piece of moribund one-time indie mega-player Miramax.


If you're not familiar with the saga Tutor, investment fund Colony Capital, and the Qatar Investment Authority purchased Miramax for $663 million from Disney, beating former owners the Weinstein Brothers, back in 2010 with what could be considered a novel business plan.


Miramax was going to be a movie company that didn't make movies.

Seems sort of odd, but I can explain.

You see, Miramax has a lot of movies in its library. Some of those movies were big hits, and some were big award winners. The plan for the new owners was to license out the home video, TV and possible remake rights to those movies, and pocket the money with a minimum amount of effort and money invested.

That's exactly what they did, making deals with Netflix, and for DVD and Blu-Ray releases.

Well, now that it's all done and dusted, Tutor is cashing out, because there's literally nothing left for them to do that doesn't involve making movies.

Their library-only strategy has two very strong limitations...

1. THERE ARE A LOT OF JOKERS IN THAT DECK.

I'm sure when the sales pitches for the licensing rights were made there was much hullaballoo made about Pulp Fiction, Shakespeare In Love,  The Crying Game, and other award winning hits, however, there's a catch, and it's a big one. For every big award winner and box office hit, there's about half a dozen films that were either complete and total stinkers, or were completely forgotten.

It's hard to license the rights to films that people either can't remember, or know for a fact that they stink to high heaven.

2. THE "WHAT ELSE YOU GOT?" CONUNDRUM.

Even if a movie company has nothing but classics and big hits on their roster, they're going to hit a wall eventually. That's because you can only license a movie, even a classic, so many times before the outlets that buy those license look and ask: "Hmmm... what else ya got?"

This is because every film, no matter how great, goes through periods where it fades from the zeitgeist. People get kind of sick of it, especially if it gets repeated plays on television.

There are only 2 ways to keep a film library company going.

1. Make more movies, so you have a fresh stock to sell.

2. Buy up other film libraries.

Both require lots of effort, money, and risk, and that's probably not something Mr. Tutor is interested in.

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