Disney shows Hollywood the way

The signs on the ground could not have been better. Hollywood’s performance this summer has improved dramatically over the corresponding season last year. Cinema tickets sales have picked up appreciably.

At least three releases of the past two months – The Da Vinci Code, The Devil Wears Prada and Pirates of the Caribbean 2: Dead Man’s Chest – have gone on to dispel the pall of gloom that hung over Hollywood until this glorious turnaround.   

But the American movie industry isn’t celebrating. In fact, caution has emerged as the current watchword. It is as if the head honchos of the major studios have entered into a secret pact to exploit this purple patch to break free from some deleterious habits of yore.

Less than two weeks back, Walt Disney Company, despite the stupendous success of its flagship product, Pirates of the Caribbean 2: Dead Man’s Chest, took the industry by surprise by announcing significant cutbacks in both its manpower base and its production slate.

A still from Pirates of the Caribbean 2: Dead Man’s Chest. Hollywood’s performance this summer has improved dramatically over the corresponding season last year. Cinema tickets sales have picked up appreciably.

While the company may have for internal reasons been constrained to retrench 650 employees worldwide, including the studio’s production chief in Burbank, it has also drawn up plans to drastically reduce the annual output of films from 18 to eight. More is no longer merrier for Disney.

That, one reckons, should eventually be the case for the other Hollywood majors as well. The fact that Walt Disney Company has chosen to implement such sweeping cutbacks in spite of racking up huge profits from films like Narnia, Cars and Pirates 2 is being perceived in influential Hollywood quarters as a pointer to the fact that, overall, the movie business is shrinking.

Hollywood thrives on bravado. But the line dividing courage and foolhardiness is dangerously slender. All that Disney’s move has done is ensure that Hollywood as a whole stays on its toes even as a few films acquire blockbuster status. Indeed, Disney’s managerial reality check isn’t as much without reason as it might seem at first glance. The studio has been involved in several embarrassing misfires in recent times – Stick It, Stay Alive, Annapolis and The Wild.

Disney hand of 30 years’ standing and current company chairman, Dick Cook, has been at pains to assert that the cutbacks are not necessarily a reflection of the state of the entire movie business. They are only a part of Disney’s revamp plans, made essential by the realisation that its core competence lies in delivering family-oriented entertainment, not competing in the mega-budget production game.

In fact, that is where the most important part of the truth lies. Hollywood has been flirting with danger for far too long. Production costs have gone through the roof, overheads have increased alarmingly and resource wastage has become a regular bane of the film business. For Disney, the $100 million films (Pirates 2 is among them) have done the trick frequently enough of late, which is all the more reason for the studio not to push its luck any further.

Sony Pictures implemented significant staff reduction much before Disney did, but none of the other major Hollywood players – Paramount, Universal and Fox – are currently looking at reducing the size of their respective production slates, but there is talk of imposing sharper control on the funds that flow into the making of films.

Profligacy is out. The Hollywood majors have, especially in the wake of last year’s disastrous summer, rediscovered the virtue of financial discipline and prudence. The studios are today much more rigid in the matter of how much they pay the stars, writers and directors than they have ever been in the past decade or so.

It is probably only natural that Disney, Hollywood’s best-known brand worldwide, has taken the lead. The others will have to follow the example sooner rather than later. That would be in the long-term of American showbiz as a whole. Hollywood movies keep the US flag flying high all around the world. The studios that churn them out cannot, however, afford to lose their sway of domestic audiences. Sans sound business principles, Hollywood would be a mess. A quick course correction is, therefore, the need of the hour.