Corporate Influence Seen Harming Entertainment Industry

Some analysts and producers say the entertainment industry is struggling because of the corporatization of movie and TV studios. The pressure to keep stock prices and revenues up contributes to less risk-taking on the screen.

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And after a weak summer at the box office, studio executives have concluded that people may not have been very interested in the movies they put into theaters. Some executives and producers think the problem stems from the fact that the studios now belong to giant corporations. NPR's Kim Masters reports.

KIM MASTERS reporting:

In today's world, the studios that produce mainstream movies and television shows have become small cogs in big corporate machines. Columbia Pictures is part of Sony. Universal Studios is part of GE. Studios have always been about making money, but when they're part of a giant corporation, they're under more pressure than they used to be to crank out good quarterly results. Making those big profits has become harder than ever in a world where audiences have so many entertainment options.

Mr. MARSHALL HERSKOVITZ (Television Producer): If you're running a news division, if you're running a movie division, a television division, you are forced to think in a way that I don't think executives thought 15 or 20 years ago.

MASTERS: Marshall Herskovitz is the producer of such network television shows as "thirtysomething" and "My So-Called Life." He's hardly alone in thinking that the corporatization of studios has had a tangible effect on the type of entertainment they produce. Dean Valentine is a former Disney executive and the former head of the UPN Network. He says big companies need big results.

Mr. DEAN VALENTINE (Former Disney Executive): The problem is when you become a large conglomerate and you have billions invested in a distribution system and you need to keep your stock price up on a quarterly basis, there's not a lot that moves the dial.

MASTERS: Take movies. Valentine says a studio could make a film that performs reasonably well at the box office, sells a respectable number of DVDs and turns a decent profit.

Mr. VALENTINE: But if you're a company that, you know, needs to have X billions of dollars on the--you know, on a quarterly revenue, you know, it's not going to excite you so much and it's not going to excite your head of sales to sell 200,000 units of something, or 500,000 units. He needs to sell 18 million units to justify the vast overhead and to keep his home mechanism functioning.

MASTERS: So the studios gun for big movies, and those movies, often packed with effects and launched with a huge marketing campaign, wind up costing so much that it's hard to take creative chances. Frank Biondi is a former top executive at Viacom, the company that owns Paramount Pictures. He says studios have always been run by gamblers, but today it's getting harder to make a risky wager.

Mr. FRANK BIONDI (Former Viacom Executive): The problem is, 20 years ago, riverboat gambling was spending $15 million and an ad budget of $2 million. Today, you're looking at an ad budget of $50 million on a big picture and you're probably spending north of $100 million.

MASTERS: Dean Valentine says that's not the kind of environment in which great movies are made.

Mr. VALENTINE: It's like the cheese business. The best way to get a really good cheese is to have little producers in little places making--having a real passion for, you know, making a certain kind of goat cheese.

MASTERS: But that high-quality cheese may not be what you get from a corporate entity gunning for a mass audience.

Mr. VALENTINE: When you start thinking about, `I'm going to roll up the cheese business, and I'm going to produce all the cheese and I'm going to own all of it, because if I own all the cheese, then, you know, I can get rid of like, half the producers of cheese. I can get rid of all the overhead. I can make the land more effective. I can get fertilizer at a better price because I can leverage, you know--' And then pretty soon what you get is Kraft American slices.

MASTERS: Certainly some of the most original and profitable pictures of the last couple of years came not from corporations but from outsiders. "The Lord of the Rings" trilogy was a Time Warner product, but it came from New Line, an independent company that Time Warner had acquired and planned to shut down, until that gamble on hobbits paid off. Mel Gibson went outside of the system when he made "The Passion of the Christ," as did Michael Moore with "Fahrenheit 9/11."

Independent players sometimes succeed in films, but in the world of television, they are almost extinct. Marshall Herskovitz points out that the government, in a move that helped corporate giants get even bigger, now permits media companies to own the programming that they air, so they are fixated on serving their bottom line by buying shows from themselves, and that means they're shopping in a smaller market.

Mr. HERSKOVITZ: Now if I'm running a network, my job is to get the best programs from my in-house production company. Inevitably, that means the quality is going to go down.

MASTERS: Herskovitz says relentless pressure for quick profit has also turned out to be a big problem.

Mr. HERSKOVITZ: We have to structure our shows differently now because now they want six commercial breaks instead of the old days when there were four and each commercial break is longer. So then they start saying things to you like, `Well, we want the storytelling to be so dense and things happening so quickly that the audience can't afford to change the channel.' But we say, `You know what, guys? We're not going to tell a story that way.'

MASTERS: Herskovitz understands that the broadcast networks are facing a tough time with audiences lured away by hundreds of other channels, not to mention video games and other forms of entertainment. And it's possible, in fact, that the media giants simply won't be able to compete in a world of digital entertainment. The old guard may give way to a collection of newcomers, whether it's Yahoo! or Google or a teen-ager with a laptop and a good idea. And Dean Valentine doesn't think it would be such a bad thing if the big players fell prey to their own size and inertia.

Mr. VALENTINE: Are there more voices? Are there more voices that are individual and unique that are getting through to an audience now? And I think the answer to that is yes.

MASTERS: Some people may miss the simplicity of the days when there were only three networks, but Valentine says maybe those days weren't so good if you didn't happen to be part of that vast middle-American audience gathered around the television to watch "Ed Sullivan" on a Sunday night. Kim Masters, NPR News, Los Angeles.

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