The Iceberg That Sank Hollywood

August 29, 2011

As I stated in Bringing Back The Old Hollywood, the New Hollywood financial model of depending on mega-budget movies hit the economic iceberg some time ago. While it’s taking some time for that model to actually sink, most of the decks are now underwater and the studios are jumping ship quickly. The following article appeared this past weekend at www.TheWrap.com:

“Canceling its third major project in a row, Universal is acting less like a Hollywood media giant these days than a pensioner on a budget.

The latest of victim of the studio’s newfound frugality: “Ouija,” was axed when, as one studio insider put it, “the numbers didn’t add up.”

But the studio has been canceling massive projects for much of the past year. “Ouija,” like at least one other, was canceled just a couple of months before scheduled production, a decision that costs the studio millions in lost pre-production costs, not to mention the $5 million cancellation penalty paid to Hasbro.

The trend at the studio may reflect “the new normal” in town, with downward pressure on budgets meeting ongoing pressure from corporate suits to hit the bottom line. (Italics added)

Movies like “Ouija” have to make almost three times their production budget before they hit profitability, which with the ongoing decline in DVD sales is harder than ever to achieve, according to knowledgeable studio executives.

It is already the second Hasbro film to be cut from the Universal slate; “Clue” was dropped last year. And over the past few months the studio has killed projects from Ron Howard (Stephen King’s “The Dark Tower”) and Guillermo del Toro.

With a budget of $140 million, “Ouija” was too rich for Universal’s blood —  even though not making the movie meant the studio had to shell out a $5 million penalty to Hasbro on top of pre-production costs. (Hasbro covers development costs under the deal.)

……it’s not as if Universal is the only one euthanizing mega-productions these days. Two weeks ago, Disney put the future of the more than $200 million budgeted “Lone Ranger” in limbo, even though Johnny Depp was attached to star and Jerry Bruckheimer was on board to produce. And Disney cancelled plans to make “Oblivion,” a project with Tom Cruise that was picked up by Universal.”

As studios cancel big budget films, and discover that most “stars” do not guarantee a profit, and audiences sour on all the sequels and remakes, what will remain?

Originality and a return to story, perhaps?

It’s about time!!!

 

{ 6 comments… read them below or add one }

Asha Hawkesworth August 29, 2011 at 9:47 am

I heard about the demise of “The Lone Ranger,” and really, I’ll watch almost anything with Johnny Depp in it, so that could have been interesting. But movies based on board games? Worse, a remake of a movie based on a board game? (Alas, dear Madeline, not your best moment.)

Ironically, I was reading about Ray Bradbury’s 91st birthday this weekend, and there are tons of good books in the world that could inspire a movie, not to mention original screenplays. They can’t find them?

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Stephen Simon August 29, 2011 at 11:39 am

I grew up in the Lone Ranger TV era of the 1950s and idolized Clayton Moore and Jay Silverheels. I know every woman on the planet loves Johnny Depp (including my wife!)….but as Tonto?….I mean, really?…with an unknown actor playing The Lone Ranger for $250 million? Around 15 or 20 films like WIN WIN could be made for that kind of money. Oh, but that would mean a focus on story and character, instead of trick casting for a 60 year old franchise that failed spectacularly as a feature the last time they tried it in 1981. Klinton Spillsbury, the actor who played The Lone Ranger in that mess, was never heard of again.

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Asha Hawkesworth August 29, 2011 at 12:04 pm

You’re right, you’re right, I know you’re right… :) I loved Jay Silverheels…

And yeah, we could have dozens of really good movies instead. And they could also star Johnny Depp! Ha ha. 😉

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Stephen Simon August 29, 2011 at 2:13 pm

OK, I surrender on Depp!!!!

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Nikki DiVirgilio August 29, 2011 at 6:39 pm

Probably not related, but this feels like what is happening to many of our current systems right now, and how they are collapsing. For instance, the education system. We are going to homeschool our daughter this year because of the school system failing the way it is in Southern California. It is liberating to know we have a choice, and to get back to what matters- the child and who they are and what there talents are and nourish this, instead of trying to do a one size fits all paradigm, like the school system has been doing. The collapse of the big budget films can make room for what truly matters- story and rich, dynamic characters.

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lauren August 30, 2011 at 7:36 am

Right on Nikki! Beautifully said Stephen! XO

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