March 21, 2023

Dreamworks Caught in a Real-Life Drama

But Hollywood is pondering something else: What becomes of DreamWorks Studios, the boutique studio behind those films?

The 10 nominations between the two movies, including best picture for each, have made DreamWorks a strong contender for honors on Oscar night, Feb. 26. The two dramas already lead the best picture pack at the box office, with “War Horse” passing “Moneyball” over the weekend, according to estimates, to become the second most popular nominee, behind “The Help,” which had domestic ticket sales of about $170 million.

Behind the scenes, however, executives at DreamWorks and its partners are quietly opening discussions that in the next few months will determine its future and answer a broader question about the state of Hollywood: Can a faltering film industry sustain a company that insists on making ambitious, Oscar-caliber, studio-size films — but without the deep pockets of a Viacom, which owns Paramount Pictures, or a News Corporation, the parent of 20th Century Fox?

Created four years ago by Steven Spielberg and Stacey Snider in partnership with Reliance Entertainment, an Indian financier, DreamWorks was a successor to DreamWorks SKG. The earlier DreamWorks was an independent studio that was created amid much fanfare by three Hollywood heavyweights — Mr. Spielberg, Jeffrey Katzenberg and David Geffen. Eventually they sold it to Paramount and briefly worked with the studio in what became a failed marriage.

(The new DreamWorks is unrelated to the publicly held DreamWorks Animation.)

Over the years, small, independently financed companies — some with their own distribution mechanisms, others, like DreamWorks, without — have generated hits, only to disappear or be merged into larger corporations. Miramax Films was acquired by Disney after releasing “The Crying Game,” a box-office success and best picture nominee; Disney has since sold the unit. Summit Entertainment was recently sold to Lions Gate; Summit investors saw the end of their blockbuster “Twilight” series as a prime moment to cash out.

For smaller film companies, the hunger for capital is a perennial problem. Making a studio-level film can require an immediate investment of $100 million or more. But even the hits pay back their investors slowly, over a cycle that may last as long as 10 years, as movies are sold successively in theaters, on DVDs, to Internet streaming and cable television services and so on.

DreamWorks is now in the ticklish position of having nearly exhausted its first round of financing, which included $325 million in equity from Reliance, and a matching $325 million in lending from banks led by J. P. Morgan Securities. An original plan called for more from each, but the struggles of the national economy brought the investment up short. Now, DreamWorks is left to line up new financing at a time when movies are struggling.

Attendance at North American movie theaters hit a 16-year low last year. DVD sales continue to drop. Although some emerging overseas markets are picking up steam, Europe and other important sales territories are uneven. And there are no indications of an immediate reversal of the trends.

So the question becomes whether, or to what extent, Reliance and allied lenders are prepared to back another round. Executives from Reliance and DreamWorks declined to discuss their plans. Over the weekend, however, they said in a joint e-mail that they remained pleased with their partnership.

“Our relationship has always been structured to allow us to adapt to changing market conditions and to create the best chance for success for all parties involved,” they said in a statement.

Speaking on condition of anonymity to avoid conflict with executives of the companies, people familiar with the situation said talks about further financing will probably open in the next few weeks. The outcome will determine whether DreamWorks, which distributes its films under a long-term deal with Walt Disney Studios but has also worked with other partners, will be able to maintain its ambitious course.

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The Downfall of M T Carney, Disney’s Marketing Manager

Except for M T Carney, Walt Disney Studios’ new president of movie marketing. She wore white pants and white Chanel flats.

A rookie mistake; no big deal: Ms. Carney, 42, had been hired six months earlier and had zero movie experience, coming from a New York marketing agency specializing in packaged goods. But the anecdote ricocheted around the catty movie business, giving visual reinforcement to a judgment that most power players had already made: she’s not one of us.

Despite successful ad campaigns since then for films like “The Muppets” and “The Help,” Ms. Carney has still not found her footing, and Disney appears to have concluded that she never will. The studio has sought to replace her in recent months, making a formal offer to at least one marketing executive at a rival studio who declined, according to people with knowledge of the matter who spoke on the condition of anonymity because the recruitment was private.

For her part, Ms. Carney has made it clear to Disney that she would like to return the focus of her career to New York, where her two young children attend school under the care of her ex-husband. Disney and Ms. Carney declined to comment on her status, but Disney insiders expect her to leave or shift to a lesser role sooner rather than later.

Ms. Carney isn’t a household name, but she holds what is perhaps Hollywood’s most influential marketing position because it includes selling films worldwide from, in addition to Disney, Pixar, Marvel and Mr. Spielberg’s DreamWorks Studios. Should she depart, it may say more about the insularity of the movie industry and its resistance to innovation than her marketing talents, which by many accounts are considerable.

“Film is the single most difficult industry for an outside marketer to crack,” said Peter Sealey, a former Columbia Pictures marketing chief who co-wrote the book “Not on My Watch: Hollywood vs. the Future.” He would know: He was a star marketer at Coca-Cola, which sent him to Hollywood after it bought Columbia in 1982. It was a rocky transition, but he lasted six years with support from Coke — better results than marketers brought in by studios over the years from Burger King and McDonald’s.

“It’s a clubby, inbred culture that still operates on instinct over research and an almost religious adherence to this-is-how-we-do-it tenets,” Mr. Sealey added.

Studios like Disney have an authentic desire to rein in runaway advertising costs and innovate with new types of marketing. They have no choice. Global advertising now costs at least $150 million for a major event film, but DVD sales continue to decline and attendance at North American theaters is at a 16-year low. Simultaneously the traditional way of turning out a broad audience — TV commercials — has been undercut by the splintering of television viewing.

But producers, directors, actors and agents often balk at unusual approaches. They just want their film to be No. 1 at the box office on opening weekend, and prefer that marketing experiments be carried out with somebody else’s career.

“You need a psychiatrist if you think Steven Spielberg is going to trust M T to tell him how to sell his films,” said one Disney executive who spoke on the condition of anonymity to avoid angering his employer. (Ms. Carney goes by punctuation-free initials that stand for Marie Therese.)

Part of the challenge for outsiders involves a radical difference in timing. Studios have one opening weekend to persuade people to see a film. When marketing a new hamburger, however, months can be devoted to hooking people. Movie marketing involves dealing with emotional artists instead of more pragmatic business people. And it requires a distinctive type of vision: What is the movie and who is it for? The answer may be two radically different things.

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