Reworking the Movie Business Model [1:09 pm]
“It’s not like I view this as a private, artistic enterprise,” Ms. [Stacy] Snider, 45, said in a recent telephone interview. Still, she said: “I certainly felt the pressure. I felt the uncertainty. It galvanized the angst. We went from making movies to making product and content. I didn’t want to make franchises. I wanted to make movies.”
Hers is a common refrain in Hollywood these days. Despite a domestic box-office surge after years of declining attendance, 2006 is shaping up to be a time of Hollywood discontent. Studio executives have waged war on actor salaries, as high-profile projects with stars like Jim Carrey have been put off. Movie production deals, like the one Tom Cruise has at Paramount, are being renegotiated. Studios are also making fewer big-budget movies.
But while Hollywood has undergone periodic shifts like this before, many people here agree that there is something different this time, a permanence to Hollywood’s new austerity plan. Executives are facing too many unknowns, among them, changing moviegoer habits, rising costs and the threat of piracy.
[...] Studios are also under attack from digital pirates who distribute illegal copies online. As a result of the piracy, studio executives can no longer depend on waves of re-releases for steady income. “Once it’s out there, it’s out there,” Mr. [Robert] Shaye [founder of New Line Cinema] said.