Paramount/Sony merger: the death of the studio system?

Posted Jun 16, 2009 2:01 AM By Drew McWeeny

<p>Pure sweet Transformery Bayhem in a moment from Paramount's megablockbuster 'Transformers: Revenge Of The Fallen'</p>

It's a dramatic headline.  I'll grant you that.

After all, right now, it's just speculation, and from only one source.  But the publication of the rumor that Paramount and Sony might be considering a merger was all it took to send Hollywood's behind-the-scenes rumor mill spinning today.  My phone rang at least five times with people ready to declare the deal "DONE!" and with people telling me that the story is further along than just speculation.  When pressed, no one could actually pin down enough fact for me to say this is anything but a rumor, but even the rumor is worth considering.

What would it mean if Paramount and Sony really did merge?

Honestly?  I think it's the beginning of the end if that happens.  And not just for those two studios, but for what we know right now as the studio system.

I said as much today on Twitter, and several people outright dismissed that possibility, but anyone who thinks that the studios are in any way permanent is wrong.  All you have to do is look at what's happening with newspapers and the broadcast networks right now.

And, yes, I think broadcast networks are on the way out.  You don't think NBC handing over an hour of prime time every night to a talk show is a white flag begging for surrender?  Because it is.  Every year, they lose ground to alternative broadcasting, including internet.  The market of viewers is, I think, actually expanding, but it's going in the strangest of directions, and the studios and the networks and the newspapers all represent the same thing... established pay models that feel like they no longer make sense from the consumer side.  Or at least, not the same sense they once made.  The audience has changed.  Their needs have changed.  The way they consume media has changed.  The way they want to consume their media will change, and you need to be ahead of it, not behind it.  This summer is a wheezing phlegmy wet cry for help, for the most part.  Even the best summer movies out there, like "Star Trek" in my opinion or "Pelham" in some opinions, are familiar fare in some way.  Pixar's "Up" is a lovely original vision... from the Pixar brand, as sturdy and unopposed at this point as any brand name can be.  Safety is the name of the game and what is safe is an increasingly difficult thing to define.

[more after the jump]

"If we do a new 'Terminator' movie and we hire that guy who played Batman, that'll make a bajillion dollars, right?  That's sort of impossible to fuck up.  Right?"

Welcome to 2009.  I salute Warner Bros. for nursing "The Hangover" into exactly the sort of hit they really truly believed it was.  When they saw the film, they got excited, because they knew there was a chance to sell the movie the right way and then deliver exactly the movie they would promise.  That $31 million movie deserves to be the biggest money earner, cost-to-return, of the summer, because it took a chance.  It did its own thing.  With a cast that was no guarantee.  And an R-rating that really means rated R.  And they did it.  Home run.

So when I read in Forbes, and then I read echoed across Twitter and the blogosphere and other news sites, that Paramount "might" merge with Sony, my first reaction is, "I really hope that's not true."  And I'm happy to tell you why.

It's bad for the creative community.  Right now, Paramount and Sony both are buyers.  And they're both making movies... right?

Well... sort of.  There's a slowdown in production everywhere right now.  Paramount's got some big stuff on their slate for the near future, and in a little over a week, they're opening "Transformers Part Deux," which is going to make more money than the banks did in bailouts.  And I'm seeing it soon, the right way, and I'm freakin' excited.  I look forward to the experience, and seeing it with a group of friends.

But that's this summer.  That's this year.  Next year, the year after... things are thin right now, and that's because money's seriously tight.  Hollywood exists to some degree on momentum... money always rolling forward... one thing making another happen... and when that momentum is interrupted, things slow waaaaaay down.

Now.  Take one of those buyers out of the market altogether.  You're down to... what?  Seven or eight major buyers?  With a few new people in and out from time to time.  MGM.  Lionsgate.  Sony.  Time/Warner, Viacom, Fox, Disney, Universal.  Summit, maybe.  I'm sure I'm not thinking of a few off the top of my head, but... really... the idea of taking even one of them out of the marketplace should make people nervous.  But one as large as Paramount?

Because if they're saying "merger," I assume they mean "sale."  And that means someone's corporate identity is going to fold into someone else's.  Paramount will become a home video label under the Sony banner, and little else.  That's a seismic shift.  That's like Europe just not being there.  It changes the landscape.  Something that big's going to have gravity.  There's going to be more damage done to the business.  Things that are tenuous now that depend on Paramount in some way, or Viacom, or financing between the two, will just fall apart in the aftermath.  I'm guessing that a lot of people in the creative community would feel a sudden and immediate pinch if this happened, as deals just vanish.  Some things would survive the merger, of course, considered active assets.  But other things would get crushed, and that could have a ripple effect in the business.  Things like this do.  Competition at other places would change.

Now... having said that...

Just because it's not good for the studios doesn't mean it has to be bad for the movies.

This could be that moment.  That "Easy Rider" moment.  I saw "Public Enemies" tonight, and while I won't say what I thought of the film itself, the cinematography is fascinating, clearing shot on HD.  Mann has adapted that aesthetic completely now.  Some people are going to hate the way it looks, but I found it sort of immediate and arresting.  And those tools... the same tools that Michael "Heat" Mann is using to shoot his Depression-era gangster drama... those tools are within the reach of the no-budget filmmaker these days.  And distribution is as simple as having an internet connection.

Look.  I reviewed a documentary I loved at SXSW this year called "American Prince."  And the other day, we got an e-mail here at HitFix from Tommy Pallotta, the director of that film:

Hi,

Drew McWeeny reviewed my movie AMERICAN PRINCE and I am trying to get ahold of him.

I wanted to update him and let him know I have since released the film via bittorrent

If you could please forward this to him I would appreciate it

Best
Tommy Pallotta

Interesting.  So there we go... a film I reviewed at a film festival that you might never get to see otherwise has been released online now by the filmmaker for free.  So no one can complain if you watch it and, in fact, I strongly encourage you to download that movie as that director requests, because it's a pretty tremendous piece of entertainment.  Steven Prince is one of a kind.  Do I think one film released on BitTorrent is a revolution?  Do I think it's interesting?  Absolutely.

Things could easily shift away from the old model to such a degree that none of the studios we know right now survive.  Instead, there will be companies that own the film libraries of the entities formerly known as, so to speak.  I think guys who make the $200 million movies will still be doing that, but there will only be about five of those a year, and everyone else will be making movies that cost waaaaaaaaaaaaaaay less.  The days of the romantic comedy that costs $100 million and change are over.  You wanna spend that kind of money, it better be something that every schoolkid in America is already ready to tattoo on some intimate part of their body.  The proverbial sure thing.

See how circular that thinking is?  That's why I'm so sure this is a bad, bad thing to even consider.  The more you back the studios into the corner, the more people are going to abandon the cynical product that gets produced out of desperation in favor of something... anything... that feels alive.

Let's hope this is all just idle chat that got a whole lot of attention, and little more.

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