..Gary Dretzka
..Noah Forrest
..Leonard Klady
..R.J. Matson
..David Poland
..Douglas Pratt
..Ray Pride
..Michael Wilmington

Report to the Commiserable
Part II

LIONS GATE

If one considers DreamWorks a major - and DreamWorks certainly puts itself in that category - then Lions Gate is the top non-aligned production-distribution company in North America. The grim part of this reality is that movies released by it have grossed a little more than $55 million though December 28, and that translates to a 0.6% overall market share. If you toss in last year's record for Artisan, which the company just recently acquired, its market share climbs to 0.9%.

There was nothing comparable to Monster's Ball for the company in 2003 and, in fact, its top two grossing movies - Cabin Fever and House of 1000 Corpses - were in addition to being inexpensive horror movies, both acquired from outside producers. Conversely, the films the company bankrolled were underperformers including a tepid response to Confidence and a big chill for Wonderland. It also missed with Shattered Glass but developed sufficient attention to elevate it into the success d'estime category and appear to be doing better than yeoman-like work on the unquestionably challenging Girl with a Pearl Earring.

All that said, it's almost too painful to assess last year's record as anything more than an off year. Lions Gate isn't quite the court of last resort but apart from studio specialized divisions, there really is no other venue with the wherewithal to finance, market and distribute domestically, sell off foreign and ancillary rights under one roof. It of course puts enormous pressure on the company. Its pockets aren't as deep as its better-cushioned competitors and that's put a real crimp in its ability to acquire movies and keep them on screen. The company can't approach the sort of real estate attitude that Miramax developed as an indie and has carried on into its life under the Disney umbrella.

The glut of specialized product vying for screens has made the arena as savage as the mainstream. Lions Gate can justly point to such films as Max, Sweet Sixteen and Mondays in the Sun as pictures with theatrical lives cut short because they were never allowed to develop an audience.

Identity is perhaps the single biggest hurdle in Lions Gates future. Because it has to embrace so many constituencies, it's evolved as a player of many tunes and the master of none. From one perspective it is the go to place for a genre movie, particularly one that accentuates the graphically violent such as American Psycho. But it's just as likely to come to the rescue for Gods and Monsters or Dogma. It's decision makers have demonstrated a bias for a certain type of thriller that embraces Confidence and The Cooler and they are exactly the sort of films that are most difficult to sell to audiences. There's no question that many of its choices are fueled by "deals" but the independent graveyard is littered with companies that sought to cross over and drowned in the process.

MIRAMAX

Seventh ranked for the year, Miramax released close to 30 films that generated about $671 million at the box office for a 7.5% market share through Christmas weekend.

It would be too simplistic to say that the Brothers Weinstein represent the yin and yang of moviemaking with Harvey commanding the upscale division in which no expense is too great to secure an award and a gross for the likes of The Gangs of New York, Cold Mountain or The Barbarian Invasions. Meanwhile, the low profile Bob takes the bottom line, steering the ship in the direction of the obvious and cynically commercial with such franchise fare as Scary Movie, Spy Kids and Scream, all released with a Dimension label.

Obviously the two not only coexist, each has his share of hits and failures and in that respect they operate on the venerable studio belief that volume and reasonable judgment will generate enough of the sort of success that wipes out the dismal commercial choices. None of the historic studio outlets are as good as Miramax when it comes to burying mistakes. The unholy trinity of A View from the Top, Duplex and The Boss's Daughter at another venue (Revolution Studios perhaps) would have generated oceans of ink and put their stewardship in question. In fact, Harvey has stepped up his cosseting of the news media with yarns of buying back the company from Disney during the past 12 months.

Apart from the obvious success of its 2003 sequels and oceans of cash for Chicago, the firm had little to crow about from its release slate other than the left field surprise Bad Santa. It's also true that there were a number of under the domestic radar pluses including overseas biz on The Hours and Once Upon a Time in Mexico and a raft of direct to TV and cable titles that have been a major company profit center. However, Miramax continues to lavish extraordinary amounts of marketing dollars on films such as City of God, The Magdalene Sisters and The Station Agent that cannot rationally hope to return significant profits before its co-presidents reach Disney's mandatory retirement age.

It was overall a bad luck year for the company theatrically best epitomized by the delayed and ultimately poorly performing Buffalo Soldiers and People I Know - two movies with themes or elements that were considered anathema to post 9/11 America. It was unable to generate much green from Project Green Light and appear to have stopped pushing The Human Stain unless it's revived by Oscar nominations.

There's no question that it's a company that enjoys a challenge and this year's is Cold Mountain. All stops will be pulled out to secure it hefty Oscar representation and somehow the prestige literary adaptation will be positioned as the alternative choice to such seemingly unconnected fare as The Return of the King, Lost in Translation and Mystic River. The combination of brute advertising and media sweet talk has been an effective tool for it in the past and there's little reason to believe it will fail to least generate a respectable gross for the movie. The company certainly put best efforts into Kill Bill, Vol. 1, a film that never quite lived up to the advance hype nor grossed the sort of box office that would have made ancillary revenue streams a hearty gravy train.

There's an old sport's adage that states you should never change a winning strategy and Miramax has milked that for more than a decade. But one senses it's time for change and the company's willingness to adapt, invent and work on the cutting edge will largely determine whether it continues to homogenize or steps out in a bold new direction.

NEW LINE

With a domestic box office approaching $1 billion ($991.3 million as of Dec. 26), New Line had its best ever year, ranking fifth overall with a 10.9% market share.

Around the time that New Line was being absorbed into the Time-Warner vortex, company president Bob Shaye committed to what might have been New Line's demise, a three-part adaptation of J.R.R. Tolkien's The Lord of the Rings by New Zealand filmmaker Peter Jackson. The writer-director was admired for his genre work and the critically acclaimed Heavenly Creatures but was hardly the maker of blockbusters and had already been turned down by everyone else in Hollywood. Jackson was looking for financing for a two film version but after viewing his demo reel for the proposed movie, Shaye told him he didn't see how it could be made in less than three movies and eventually okayed an 18-month shooting schedule and a budget approaching $300 million.

The reasoning behind the decision will likely never truly be known. Shaye may have wanted to test the extent of his power under the new structure or force Warner Bros. to question his judgment or he may have simply loved the books and Jackson's presentation or a combination of all the above. In the months preceding the release of the first film in 2001, the rumor mill was churning out the word that New Line would not make it to the end of the year and that Warners would have its hands full with the Rings and the first Harry Potter movie. For once, the rumors were untrue and Jackson and New Line had not only a blockbuster but a critical success and must be a bit woeful that it doesn't have a like-minded trilogy ready to step out in 2004.

Rings is also that rare phenomenon that, in a very worst case scenario, would erase a release schedule with nothing but bombs. While no one gets away unscathed, there's a case to be made that the movie's success emboldened the company rather than made it complacent. In addition to the $350 million generated from Rings releases and re-releases, it also hit pay dirt with Elf, a modest comedy that tapped the zeitgeist and will unwrapped $180 million. It hit a bulls eye with a the remake of The Texas Chainsaw Massacre and brought home a gusher by combining two horror veterans in Freddy vs. Jason.

However, it wasn't all glory. Its retread of Willard lacked traction, there was nothing smart about its Dumb and Dumberer sequel, its Vin Diesel vehicle A Man Apart was low octane commercially and The Real Cancun wasn't worth the trip. On balance it seems niggling to cite the short falls of programmers in the same breath as robust and reinvented franchises, properties with rich sequel potential and quality oddball fare like About Schmidt. Nonetheless, it's fair criticism to point out that it's a release schedule that lists toward horror and inane comedy.

The chasm between low brow and upscale would not seem so severe had New Line not allowed its specialized wing Fine Line to languish. Last year only Elephant and American Splendor carried the Fine Line colors and both movies were acquired as a result of an on-going relationship with HBO Films, another T-W entity. Another Fine Line title, Ripley's Game, was a niche success in Europe and went straight to cable and video in the U.S. There's no question that the label has been given a low priority and one can feel the passion slipping away for the marketing and distribution of two of 2003's finest films.

Shaye obviously has eclectic tastes and views himself as a maverick and street smart player. Still, he seems to be avoiding the irrefutable fact that he survived two decades of indiehood and emerged rich beyond his wildest dreams. And with that much money and success, you can call shots, take the risk and bask and bake in the heat.

PARAMOUNT

Well back in the back in eighth spot, Paramount movies grossed $643 million in North America and accounted for a 7.1% market share.

Perhaps an anecdote might best put Paramount 2003 in perspective. A few years back I was discussing a film opening with the head of publicity at a studio (not Paramount). He gave an elaborate rationalization for the major's partial involvement in a movie and weighed a tepid debut against perceived robust ancillaries and concluded that the company would break even. I immediately responded with, since when is the studio in the business of breaking even?

So, let's begin by scrolling down Paramount's 2003 slate and noting that The Italian Job, The School of Rock, How to Lose a Guy in 10 Days, The Fighting Temptations and Dickie Roberts will all make money. In terms of the studio's exposure, Lara Croft: The Cradle of Life and The Hunted are likely break even propositions, it will take some loss on Beyond Borders and The Core and lose some sizeable change on Timeline. On the surface it doesn't sound so bad but that's been the annual order at Paramount for years and that continuing commercial and qualitative stasis ought to be worrisome for the hands that rock the studio.

It also has a specialized division that's famous in the industry for acquiring impossible to sell movies and proving the assessment. The quintessence of the observation was The Singing Detective, the film adaptation of Dennis Potter's acclaimed television series that critics and sparse audiences admired for its ambition but felt it came up short in execution. In the rare instance when one of its films finds niche acceptance as in the case of Man on the Train, the reasons are equally inexplicable.

Paramount co-ventures almost all its movies and barely has a presence outside North America. Its famous gates can be found in the dictionary beside the definition for risk averse and we already know its strict adherence to that policy lowers its up front risk and diminishes back end profits should they occur. What's less apparent and more difficult to quantify is a growing mind set that there are targets to hit in order to maintain that bottom line. In other words there's a built in incentive to cover costs and rarely the desire to exceed as part of the money is going into someone else's pocket. It's difficult to arrive at a worse creative scenario and one's hard pressed to come up with names beyond producer Scott Rudin and Tom Cruise among its contractual talent pool.

It wasn't that long ago that Paramount was a vibrant industry leader and it wouldn't take long to improve its present doldrums. But one senses that its senior leadership likes things the way they are and will not alter the present course until a genuine crisis level environment is declared. It's been noted that without risk there cannot be reward and then there's the Golden Rule: He has the gold, makes the rules.

Next week: Sony, Fox, Universal, Warner Bros.

Last Week: Focus, MGM, DreamWorks and Buena Vista

- by Leonard Klady