Jeffrey Korchek

Unless you are so over the movie business you must have noticed that the heads of 3 of the major studios—Paramount, Universal and Disney-- have changed this year, and there’s only 6 studios in total. Why do some survive in the job and some are shown the door? Because as F. Scott Fitzgerald noted, few can keep the equation of the movie business in their head. It didn’t used to be such a hard equation—make the pictures, some succeed, others don’t, but overall, especially with the windfall of DVD, build the library and they mostly all come out OK. But that was until studios started spending to match their revenue so that when things don’t work, the corporate parents start looking around at whom to blame.

In a business where you don’t know why some movies succeed and others fail, even with the best of stars and intentions, because nobody sets out to make a bad movie (except perhaps for “The Love Guru”—Mission Accomplished.), you have to be prepared when things go bad. The jobs running studios are great—you get a bunch of money, rarely pay for a meal and flying commercial, well, forget about it. But when things turn, you know. It’s as if the air at the studio smells different, and not like Teen Spirit. And then somebody speaks the words that put a chill in the air, even in the overheated San Fernando Valley, “the pictures aren’t working.” From there, it’s a quick trip to “__________ is pursuing his recently discovered lifelong passion to be a producer”.

In reality, no one person in a studio makes the decision to make a movie; it’s all done by committee and everyone in the room—International, Marketing, Creative, Video, Business/Legal-- is equally complict. Yet, when the pictures turn bad some individual takes the fall. It’s fantastic to think, given the complexity of developing, producing and marketing a motion picture and the hundreds of people necessary to do it,  (15 to 20 times a year) that one person alone can be responsible when the movies head south for the winter. But as they say, sometimes it’s just time for a change.

The fundamental disconnect in the movie business is that in a long-term business where the basic model of a studio has been constant for 100 years, you have temporary employees making permanent decisions. That’s why changing management because the pictures aren’t working is costly and inefficient. Long-term businesses need stable management and a culture that allows for consistency over time. But something bigger is going on right now, more than just a picture or two or twenty not working, driving management change. The entire business is in flux, calling into question what a studio should be, and more importantly who should own them and who should run them.

The major motion picture studios have existed in some cases more than 75 years and they’ve always been on a boom or bust cycle. Now with large corporate parents, they needn’t worry about the occasional bad streak. But their executives need to. In a business where William Goldman’s adage is “nobody knows anything”, and a fitting corollary is “nobody really likes anyone”, how to you survive? Manage what you can, plan for what you can’t, watch the money and always have a big hit up your sleeve.