LINDA WERTHEIMER, host:
This is MORNING EDITION from NPR News. Im Linda Wertheimer.
STEVE INSKEEP, host:
And Im Steve Inskeep. Good morning.
Here is an advanced look at the next big industry that could face trouble. Its not the banks, its not the car companies. Its Hollywood, the people who bring you both movies and TV. Maybe its appropriate that one of this summers hit films is called The Hangover.
(Soundbite from the movie, The Hangover)
Mr. ED HELMS (Actor): (as Stu Price) Whats going on?
Mr. ZACK GALIFIANAKIS (Actor): (as Alan Garner) Theres a jungle cat in the bathroom.
Mr. HELMS: (as Stu Price) I will check it out.
Mr. BRADLEY COOPER (Actor): (As Phil Wenneck) Youre not kidding, theres a tiger in there.
INSKEEP: This movie about some guys, who wake up in Las Vegas with no idea what happened the night before may be making lots of money, but the entertainment industry, overall, is not. Hollywood insiders say the industry has never seen such trouble. Reporter Kim Masters is covering the story. She joins us. Hi, Kim.
KIM MASTERS: Hi Steve.
INSKEEP: One of the reasons we are talking about this, today - because of the departure of a prominent television executive, Ben Silverman.
MASTERS: Yes Ben Silverman was the co-chairman of NBC. Hes leaving after failing to pull NBC out of fourth place. He was a pretty colorful character and he has been on the job just about two years, a little more than two years and he is both a symptom of what is wrong with NBC, and more broadly, whats wrong with the television industry. NBC had hired him because he was supposed to be a young hot guy, who had been producer of The Office and Ugly Betty. He then proceeded to produce a string of flop TV shows. Now he said, his mandate was to reinvent television, which is necessary at this point because television is in trouble. Why is television in trouble?
(Soundbite of laughter)
INSKEEP: Nobody is buying any advertising. Let me just guess.
MASTERS: Thats part of it. When we say nobody is buying any advertising, you know, every year of the networks have their upfront, they present their shows to the advertisers. And in the past several years, they have done about $9 billion worth of business. This year that number is going to be way down. They dont even have deals yet. Normally these deals are sewed up within a few weeks of May. Now, there is a stand off between the advertisers and the networks, and there is going to be a significant drop in that number.
So thats why, that was Ben Silverman, a guy, who had the proper experience, but he has finally departed. He is going to work for Barry Diller - IAC, his company, and create some kind of content hopefully with more success than he did at NBC.
INSKEEP: What made his so colorful? You say he was colorful.
MASTERS: He had quite a reputation as a party guy. And was throwing a very over the top parties, in some cases, with scantily clad women, in fact a live tiger at one of these parties before the Emmys a couple of years ago.
INSKEEP: Just like the movie (unintelligible).
(Soundbite of laughter)
MASTERS: Just like the movie - speaking of tigers. I will miss him because of the color that he provided.
INSKEEP: I thought that was the formula for success in Hollywood, though. Sounds like the industry must be changing.
MASTERS: It has already changed a lot. You know GE owns NBC. So, those are buttoned down guys. Its not as fun as it used to be.
INSKEEP: Well, you are talking about buttoned down executives. Are any of those buttoned down executives going to be closing down some studios as revenues go down.
MASTERS: Well, yes the movies are also in trouble. Because the economy has just put a stop to the buying of DVDs, in the way that it used to go on, and that is where the studios make their money now. You will see a movie that is a $100 million at the box office - the studio doesnt get to keep all of that. They get maybe half of that, and they are looking more and more for years now to the DVD to provide their real bread and butter.
INSKEEP: These movies are so expensive, they may actually hit, may actually lose money at the box office, right.
MASTERS: Oh, yes. You will see, for example, that this past weekend, G-Force was number one with the thirty something million dollar opening. That movie cost closer to 200 million, then 100 million. Its an astonishing amount of money and, you know, you cant make that back when you are not going to sell as many DVDs. And you are seeing all of these studios posting drastically reduced numbers when they report their financial results. So they are very worried that this is not a temporary thing. That consumers will have just finally broken the DVD habit as they can see that, you know, likely in the future more and more they will be watching movies online.
INSKEEP: What does that mean for moviegoers?
MASTERS: Well, what we have seen this summer is, you know, a couple of the movies that everybody talks about and everybody is jealous of at the studios are Transformers 2 and The Hangover. And The Hangover, you know, is a raunchy R-rated comedy, didnt cost that much. Thats like a dream hit, because theres so much profit. And Transformers 2 thats the kind of movie, hugely expensive movie to make, and the studios this pressure to aim for that kind of big event movie and, you know, few of those fail thats going to be a terrific shot to the bottom line for these studios.
And its going to be, I think, if you talk to the guys who really look at the macro pictures of these media companies, they do believe that some of these studios will go out of business or consolidate and essentially disappear in the next few years.
INSKEEP: Kim Masters hosts member station KCRWs show, The Business. Kim always good to talk with you.
MASTERS: Its a pleasure, Steve.
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