A Change in the Way They Do Business

Thought this article was interesting. It's a Hollywood Reporter interview with Jeff Robinov, President of Production for WB:

THR: Is it possible to rethink your approach to making movies so that they're lighter and more nimble, and not so big?

Robinov: I can't tell you. It's not for lack of looking into it. The biggest problem with the cost of pictures, which are getting more expensive, is the cost of selling them -- that is going to put pressure on altering the cost of making them. Every studio and every agency is feeling the pressure. We have a number of co-financing deals now with Legendary Pictures, Village Roadshow and Relativity. That extends our cash and allows us to invest in more pictures. It doesn't change the finances of each picture, but it allows us to make more.

THR: The unions are putting a lot of pressure on the studios to get a cut of DVDs.

Robinov: That's never going to happen. For every company, the DVD was bailing them out and now the DVD revenue company by company are coming up so short that there's no way they're giving any of it away.

THR: That's why the dealmaking is going to change?

Robinov: Yes. The economics are getting so difficult, and it's so hard to make a picture, that for movies to be profitable, the studios are capping the backend participation, they're hiatusing participations, they're asking people to take reductions up front. More actors are willing to do that now, depending on the material and the director. You can only spend so much, and each movie has a ceiling of participation.