August 24, 2006

Reading the Hollywood Tea Leaves [10:53 am]

The fallout from Tom Cruise’s public PR meltdown is being spun a variety of ways, all suggesting that there’s a change in the wind for Hollywood business models:

  • Fired or Quit, Tom Cruise Parts Ways With Studio

    Mr. Cruise’s representatives insisted that they had not been fired but instead had quit and had already lined up $100 million in financing to produce movies on their own.

    Either way, the parting of the ways was anything but amicable. And it came as the latest sign that the media conglomerates that control Hollywood are growing impatient with the megastars who earn the highest salaries.

  • Tom Cruise’s star likely to shine on - pdf

    “He didn’t go out and kill somebody. He didn’t drive drunk. He didn’t beat up his wife,” Guber said. “I think he will remain a top star in the business and command a great deal of attention and bring in a great deal of revenue.”

    The public is notoriously fickle when it comes to movie stars, although Cruise has sustained broad popularity longer than most.

    And Cruise does not face the same kind of challenge confronting Mel Gibson, who spouted anti-Semitic remarks after being stopped for drunk driving.

  • Star Is Collateral Damage of Studios’ Profit Push - pdf

    Others, however, were looking for hidden meanings in Redstone’s comments. Anthony Valencia, entertainment analyst with money manager TCW in Los Angeles, called the situation “very curious.”

    He wondered whether there were other factors, instead of Cruise’s behavior, that led Paramount to cut the cord. He pointed out that Paramount executives had tried to negotiate a new deal with Cruise long after he hopped around on Oprah Winfrey’s couch.

    “If you can’t reach a deal, that’s one thing,” he said. “But would his behavior have been as problematic as long as the deal terms would have been more favorable?

  • Money Is The Real Star In Hollywood - pdf

    The Internet is growing fast as an entertainment channel, and the cost of producing blockbusters is rising almost as quickly. That emboldens studio chiefs working for publicly traded companies to challenge the fickle power of the most popular stars.

    To be sure, celebrity still matters, blockbusters still fill theater seats and movie stars still live like, well, movie stars. But the same shifts in technology and audience tastes that changed the music industry are starting to influence the movie business.

  • Cruise may have been undone by DVD slowdown - pdf

    While egos, star power and box office clout all may have been part of the equation, flagging DVD sales could have served as the tipping point that led Paramount, headed by chairman Brad Grey, to make an offer that would have scaled back Cruise’s rich package of compensation for the films he headlines for the studio.

    Even though this year’s “Mission: Impossible” movie fell short of its two predecessors, no one is arguing that Cruise hasn’t amassed an impressive box office record at Paramount. But he also enjoyed a famously rich deal that guaranteed him about 20% of box office revenue as well as a piece of DVD sales — a perk few stars have ever commanded.

    During the past 18 months, growth in the DVD market has slowed dramatically. As a result, home video isn’t automatically providing the same guaranteed upside to films that might not have performed spectacularly in theaters. In turn, the studios are becoming less willing to strike deals that give stars participation in box office revenue as well as a portion of DVD sales.

See also Critic’s Notebook: Mission Imperative for a Star: Be Likable; Caught on Film: A Growing Unease in Hollywood; and Allies Start to Escalate Dispute Between Cruise and Viacom

Later: Op-Ed Contributor: Risky Business

Paramount’s salvo against its biggest star may be an attempt to bring some financial sanity to the old asylum. But it’s also another sign of just how badly the film industry has lost its bearings in this new media environment, where the once-reliable teenage audience is suddenly less reliable; video games and the Internet are making the inroads into movies that TV once did; and DVD sales, which once seemed like the studios’ salvation, are plummeting.

The stars, for their part, have helped create an untenable economic situation. But even though Mr. Redstone wants to bring them to heel, he is devaluing the movies’ greatest asset, and opening a breach the studios alone can’t fill. The fear in Hollywood is that Mr. Redstone may be smashing the star-driven model without putting anything in its place but financial responsibility, and audiences don’t line up to see financial responsibility.

Of course, Hollywood is accustomed to prophecies of doom. The difference this time is that everyone — stars and executives alike — seems clueless. The asylum is out of control and no one knows what to do about it.

Even later (Aug 28): A Big Star May Not a Profitable Movie Make

[I]f you ask economists and other academics that study the movie industry, Mr. Redstone’s decision was, in financial terms, spot on. The best reason to get rid of Mr. Cruise or, for that matter, Mel Gibson, or Lindsay Lohan, is not their occasional aberrant behavior. They, like most marquee names in Hollywood, are simply not worth the expense.

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A Downside of Connectivity? [9:57 am]

Internet addicts halfway house opens in Shanghai - pdf

“None of the teenagers are forced to come here,” the newspaper quoted Wang Hui, the house’s chief social worker, as saying.

“We wander around in nearby Internet bars at night and bring them to the halfway house if the teen agrees.”

[...] Amid growing concern that more and more young people are getting hooked, China has issued a raft of regulations aimed at curbing excessive game playing at Internet cafes and heavily fining owners that admit minors.

Related: Unable to unplug, tech addicts may sue: academic - pdf; Addicted maybe, but users say BlackBerries improve life - pdf; Laptop Slides Into Bed in Love Triangle

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Patent Trolling: Creative [8:45 am]

Apple Settles Patent Dispute With a Rival

Apple Computer said Wednesday that it would pay a one-time $100 million licensing fee to use Creative Technology’s patented music player technology, settling a string of recent legal disputes between the two companies.

[...] Mike McGuire, vice president for research on mobile devices at Gartner, the technology analysis and consulting firm, said an Apple endorsement for its line of iPod accessories most likely gave Creative incentive to settle.

[...] The Creative patent, which the company calls the Zen patent for its line of digital audio players, covers the interface that allows users to select a song, album or track by navigating a succession of menus.

The WaPo article lets people call a spade a spade: IPod Patent Dispute Settled - pdf

“From the point of view of Creative, their bitterness stems from the fact that when they approached Apple, they were arrogantly dismissive” about licensing their technology, said Phil Leigh, senior analyst with Inside Digital Media Inc., a Tampa-based market research firm. “Apple’s point of view on this is, ‘These guys are patent trolls,’ ” who are profiteering off of the technology patent process, he said.

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The Joys of Reading the NYTimes [8:41 am]

Yes, TimesSelect is a crime. But, man, do they have writers! This snotty article on recent goings-on in the music business contains the kind of writing that keeps me coming back: Making Room for the Hopeless Pop Star in a Crowd of Professional Amateurs

If you’ve been watching many of the post-“Idol” musical reality shows, you might have noticed that most of these putative amateurs behave an awful lot like old pros. [...]

Don’t worry. There are still a few naïve musical dreamers, rushing in where angels fear to tread. You just have to know where to look.

Why, just this last weekend a charmingly inept rapper made his television debut, boldly ignoring all the advisers who must have asked him not to. And on Tuesday, the same day that Danity Kane CD’s arrived on record racks, a blithe aspiring pop star released her debut album, brushing off suggestions that singing be left to actual singers.

O.K., so the rapper, Kevin Federline, and the singer, Paris Hilton, aren’t exactly unknown. But in the world of pop music, they’re definitely underdogs. [...]

The urge to laugh at them is understandable; they do seem pretty green, especially compared to those battle-hardened aspirants on reality television. But let’s be gentle with our moonlighting celebrities. They might be the only real amateurs we’ve got.

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OT: Right — An “Oversight” [8:32 am]

Not really the topic of this blog, except the educational angle. But after reading Thomas Frank’s op-ed from earlier this week, it can’t go unremarked: Evolution Major Vanishes From Approved Federal List

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