March
5Hollywood Cries “Action”
The pace of dealmaking has been quietly stepped up in Hollywood and there are several intriguing reasons.Box office is percolating at a record pace, prompting studios to ask themselves a disturbing question: Will there be a shortfall of product a year from now?
Last year at this time, remember, the studios were bitching about a product “glut.” Too many releases were fighting for prime dates because too many hedge funds and other independent financiers had funneled money into production.
But maybe this “glut” turned out to be a good thing. Faced with tough competition, distributors have been slotting their product into dates they would normally abjure.
And the results have been bountiful. According to Pam McClintock, writing in Weekly Variety, box office is up around 13% thus far this year and even attendance is running 10% over ’08.
This data has come as a shock to publications like the New York Times and the Wall St. Journal, which earlier hammered away that attendance was suffering a decline. DVD sales are declining, to be sure, but people are still filing into the ‘plexes.
Until now, deal making has been encumbered by several issues. The studios are getting much tougher on star deals and gross participations. Projects like “Dinner for Schmucks” go through excruciating torture tests before the deals for Steve Carell and director Jay Roach were finally sorted out and several co-financing channels were opened up. The decline in ancillary revenue streams (like DVD) has brought a new caution to the process.
But perhaps caution has gone too far. The studios need product. Agents need revenue. Stars like Tom Cruise and Brad Pitt are eagerly trying to fill their slots.And, most importantly, people are streaming to the new movies. The appetite is there. Recession be damned.
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