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Downsizing: Hollywood Goes on a Permanent Diet

Photo of Anne Thompson By Anne Thompson | Thompson on Hollywood October 26, 2009 at 9:40AM

The studio glory days are over, and everyone knows it. Diminishing expectations and returns are the new normal. (Here's Disney chief Robert Iger's gloomy take.) Palpable anxiety is everywhere as the game of corporate musical chairs keeps removing one chair after another. Folks are scrambling to hang on to the good jobs, knowing there will be fewer of them.
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Thompson on Hollywood

The studio glory days are over, and everyone knows it. Diminishing expectations and returns are the new normal. (Here's Disney chief Robert Iger's gloomy take.) Palpable anxiety is everywhere as the game of corporate musical chairs keeps removing one chair after another. Folks are scrambling to hang on to the good jobs, knowing there will be fewer of them.

Warners' exec Kevin McCormick's departure is not going to be the last as the studios exec ranks start thinning. They can't afford these high salaries, especially when they aren't making that many movies. I like this quote from ex-Hollywood exec Roger Smith, now executive editor of Global Media Intelligence, in Michael Cieply's NYT story on Hollywood downsizing: “Someone with ‘vice’ in his title should be fairly nervous."

Look at Gourmet Magazine. Conde Nast's bastion of quality and authority folded because it was above the fray, too big and expensive and not competitive with the other magazines in its sector. The new order requires adaptation, communication, engagement. It's no longer about imposing authority from the top down. (Vanity Fair's Graydon Carter left town as his staff layoffs went through.)

The studios could learn from this. Browbeating consumers into coming to their movies is not the way to win the game. Hectoring them about piracy isn't either. Direct communication and engagement, learning who they are and what they want, is key. What Paramount did with Paranormal Activity is a significant wake-up call. When the $15,000 movie finally went into wide release on its fifth weekend, with only $10-million spent on ads, it beat the thinly-sliced Saw VI---handily. (A Paranomal Activity sequel is in the works.)

The industry could make a welcome return to the 70s, when the studios, recognizing that their usual playbook was no longer working, experimented outside the box, yielding a decade of fabulous filmmaking. Why not push some boundaries with low-budget fare and online viral marketing experiments? Unfortunately, with evidence pointing to massive-budget movies earning the lion's share of profits, the studios aren't going to give up on their pursuit of pricey brands and franchises. But there's still room in their slates for some low-cost risk-taking and grabbing an opportunity for creativity and innovation.

This article is related to: Hollywood, Moguls, Studios, Players


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Thompson on Hollywood

Born and raised in Manhattan, Anne Thompson grew up going to the Thalia and The New Yorker and wound up at grad Cinema Studies at NYU. She worked at United Artists and Film Comment before heading west as that magazine's west coast editor. She wrote for the LA Weekly, Sight and Sound, Empire, The New York Times and Entertainment Weekly before serving as West Coast Editor of Premiere. She wrote for The Washington Post, The London Observer, Wired, More, and Vanity Fair, and did staff stints at The Hollywood Reporter and Variety. She eventually took her blog Thompson on Hollywood to Indiewire. She taught film criticism at USC Critical Studies, and continues to host the fall semester of “Sneak Previews” for UCLA Extension.