MGM roar could soon be silenced

[commandlinegamer]

Things are looking a bit bleak for the once mighty lion of the film industry MGM [1]. $4 billion in debt, it currently holds the rights to the Pink Panther and Bond franchises, the latter of which is indefinitely postponed [2].

[1] - http://news.bbc.co.uk/1/hi/business/8631843.stm

[2] - http://news.bbc.co.uk/1/hi/entertainment/8631245.stm

I appreciate film making is a highly risky business; I just wonder if it's not possible for big studios to make decent-quality films which don't have to have budgets in the 100s of millions.

[The Central Scrutinizer]

I appreciate film making is a highly risky business; I just wonder if it's not possible for big studios to make decent-quality films which don't have to have budgets in the 100s of millions.

They have all along. It's getting people to see them which is the trick.

[dudalb]

They have all along. It's getting people to see them which is the trick.

MGM has pretty much been on life support since 1980 and the merger with UA. It has not been a major studio since the early 70's. It was the hardest hit of all the major studios in the shake out in the Film Business in 69/70. In the early and mid Seventies it made few films,and those low budget films. About the only real hit they had was "That's Entertainment" which consisted 90% of clips from the musicals of the Glory days of the 40's and 50's. It made a brief comback with big budget films circa 1976 with a couple of sucesses like "The Sunshine Boys" and "Logan's Run",but a series of bombs sent it to the bottom,hence the merger with UA (after UA was pretty much destroyed by the "HEaven's Gate" fiasco). MGM brought it's catalog of classic films to the table, and not much else. Almost all the films MGM UA released were relesed under the UA label,and without a great deal of sucess. Only the lucrative 007 franchise kept them afloat. And even then in the late 80's they were forced to sell off the MGM catalog to Turner/Time Warner, which is why such MGM classics like "Dr Zhivago" and "Ben Hur" are on Warner Home Video.
I am amazed they have kept alive this long. The Lion has not really roared since the 1970. The selling of the famed MGM backlot pretty much ended MGM as a major studio.

[dudalb]

Things are looking a bit bleak for the once mighty lion of the film industry MGM [1]. $4 billion in debt, it currently holds the rights to the Pink Panther and Bond franchises, the latter of which is indefinitely postponed [2].

[1] - http://news.bbc.co.uk/1/hi/business/8631843.stm

[2] - http://news.bbc.co.uk/1/hi/entertainment/8631245.stm

I appreciate film making is a highly risky business; I just wonder if it's not possible for big studios to make decent-quality films which don't have to have budgets in the 100s of millions.


Micheal Eisner actually tried a strategy of modestly budgeted films (he called it a "singles and doubles strategy") with Disney in the late 90's ,but it did not work all that well. The problem is whole method of film marketing and distribution is now fine tuned for the Blockbuster.

[GreyArea]

The problem is whole method of film marketing and distribution is now fine tuned for the Blockbuster.
Is that because the audiences have so many other entertainment choices these days? The current generation has video games, which are more immersive than television was.

As for smaller films, such as independent, foreign, and art films, I guess the audiences for them are just too small. No blockbusters there.

[dudalb]

IMHO, it's probably due to the advent of home video,which really cut the stay of movies in theaters short, and killed second run theaters almost completly. All this gave films much less time to make money then they used to have, and this encouraged big films that could make a lot of money fast,rather then smaller films which made money over the long haul.
BTW the idea that all movies eventually make a profit on home video is a myth. Plenty of films still lose money even when the Home video take is added.

[Floyt]

IIRC, they also hold distribution rights for the Hobbit and hence their predicament seems to be responsible for the hold-up in letting us bask in the full glory of a quintology. If they endanger that to any extent, I swear I'll come over and sock that lion in the tonsils.

[dudalb]

Actually,you can't blame Leo.
United Artists was the one that has the Hobbit Distrubution rights. MGM took over the rights When Sony that MGM/UA was useless overhead, killed off UA and Combined all the assets under the MGM label.
I understand the feud is between Sony and the other MGM shareholders.
Maybe Gandalf and OO7 could join forces to put a hit on somebody.
It is ironic that this squabble over the corpse of a once great studio is delaying the next film in two of the most sucessful franchises in movie history.
Take away the 007 Franchise (the Pink Panther franchise is dead since the 2nd film mercifully bombed) and the Hobbit rights and MGM is just a logo. It sold off it's very valuable catalog a long time ago.

[gumboot]

The Hobbit isn't being delayed by this, FWIW. It was incorrectly reported that pre-prod was going to start mid 2010, but it's not actually starting until late 2010.

[Floyt]

OTOH, that means I still have time to relocate to Wellington to be on hand when the calls for extras go out :)
(I know people who have actually done that. Admittedly, they were from Gore, so no hardship involved...)

[dudalb]

OTOH, that means I still have time to relocate to Wellington to be on hand when the calls for extras go out :)
(I know people who have actually done that. Admittedly, they were from Gore, so no hardship involved...)

Be careful, I have read that in the screening for extras, Jackson tried to screen out the Tolkien fans who had flew in to be in the film, thinking, probably quite likely, they would turn out to be a Pain in the Butt during filming.
Anyway, I am a little more curious about what PJ is going to do with "The Dam Busters"......

[Almo]

Anyway, I am a little more curious about what PJ is going to do with "The Dam Busters"......

Maybe show the world that Star Wars is The Dam Busters?

ETA: Don't get me wrong, I like Star Wars as a space movie filmed like a WWII film.

[gumboot]

Anyway, I am a little more curious about what PJ is going to do with "The Dam Busters"......


I'm more interested in when he's going to do it. :D The last I heard anything was about October last year.

[DC]

IMHO, it's probably due to the advent of home video,which really cut the stay of movies in theaters short, and killed second run theaters almost completly. All this gave films much less time to make money then they used to have, and this encouraged big films that could make a lot of money fast,rather then smaller films which made money over the long haul.
BTW the idea that all movies eventually make a profit on home video is a myth. Plenty of films still lose money even when the Home video take is added.

dont they make money now with pay per view and DVD/BD sales instead of second run theaters?

[barrymore]

From 2005:


In all, retailers will sell $18 billion in DVDs this year, figures PricewaterhouseCoopers, compared with about $10 billion in box-office revenues.


http://www.businessweek.com/magazine/content/05_28/b3942101.htm

[dudalb]

From 2005:



http://www.businessweek.com/magazine/content/05_28/b3942101.htm

A. DVD sales have dropped quite a bit since 2005.
B.You have to figure in how much the studio actually gets of DVD sales. It is not that big a percentage; the Stores..online or retail..take a HUGE chunk of the profits.

Believe me, the Theatrical release is where the Studios make their huge profits. The DVD income is nice, but The theater profits is the bread and butter of the studios.

[barrymore]

A. DVD sales have dropped quite a bit since 2005.
B.You have to figure in how much the studio actually gets of DVD sales. It is not that big a percentage; the Stores..online or retail..take a HUGE chunk of the profits.

Believe me, the Theatrical release is where the Studios make their huge profits. The DVD income is nice, but The theater profits is the bread and butter of the studios.

What?? The only thing you are right about is DVD sales have been shrinking.

http://online.wsj.com/article/SB10001424052748704789404574636531903626624.html

Studios sometimes get MORE than the retail price of the DVD because some retailers (Wal-Mart) sell them below cost. Regardless, they make HUGE margins on them.

While Blu-ray disc sales are growing at a rapid rate, they too represent just a fraction of DVD sales. Studios generally get about $17 for each regular DVD sold, as long as the movie is a new release, and $22 for each Blu-ray disc. The biggest retailers often sell them at or below cost.

And, studios count on DVD sales to make films financially viable. Cinemas just don't cut it anymore.


The figures indicate that studios will likely have to continue looking for ways to survive in a marketplace where they can't count on hefty home-entertainment revenue to offset giant production costs. Those costs often more than eat up the studios' half of the box-office receipts, which are split with theaters.
...
The ongoing decline in home-entertainment revenue has already fundamentally altered the way studios do business, forcing them to place big financial bets on hoped-for mass-market blockbusters at the expense of features that cost less to make but that also have smaller earnings potential.
...
For studios, which count on income from home entertainment to underwrite growing production costs, the trend represents a giant headache. In the early 2000s, studios began counting on the cash bonanza generated by consumers' building up libraries of DVDs. Now, they will have to alter budgets to reflect the shrinking DVD income stream.

[Darth Rotor]

I don't miss the Studebaker. Why should any of us miss MGM?

[Rogue1stclass]

I kind of miss the Studabaker...

[commandlinegamer]

Which film studio was that? I don't recall the name.

[Bell]

Which film studio was that? I don't recall the name.

MGM?

Or Studebaker (http://en.wikipedia.org/wiki/Studebaker)?