GM and the Studios

I too made a similar connection between Patrick Goldstein's "In a Losing Race with the Zeitgeist" and "GM Closures," both in the LA Times, posted by 2Blowhards. Here are a few of the comments, which mentioned my current column, so I responded as well.

ALEC WRITES
I also think that the Patrick Goldstein piece was great, and I particularly liked his point about how movie-goers can instant message their friends after seeing a film, warning them about a turkey or confirming a hit film’s quality. I had become used to checking the consensus of reviews that can be found on various Web sites (e.g. yahoo movies), but had not considered the immediacy of text messaging before reading Goldstein’s column. I imagine that this kind of thing could also affect pop music concerts or even the release of music CDs. I also liked how he criticized the marketing of the film “Zathura,” highlighting how movie executives often outsmart themselves with their often silly choice of a film’s release dates. I’m not sure, however, that the studios will learn anything from this since they often seem so convinced that they can manipulate viewer sentiment that they refuse to listen to alternative voices or to learn from their mistakes.
I also liked the GM piece and hope that anyone who links to the article will also check out the related article on Toyota’s continued success in the US (“Toyota in the Driver’s Seat”). Toyota is increasing its share of the auto market using US workers and paying high wages while making cars that the public wants to buy. But even though the GM article links GM’s problems to some of its employee costs, Dan Neil who writes about autos and the auto industry for the Times has blasted GM executives for their lack of creativity and poor past decisions. And the article notes that the UAW had recently “agreed to let GM reduce its cash outlay for current and retired workers' healthcare by $1 billion a year,” so I don’t think one can easily blame the union for the company’s woes. It may be that GM’s problem may not just be legacy pensions and healthcare costs, but a larger failure of GM’s management itself, its culture, its way of thinking, and its way of operating. Also, there are many examples of mature companies which nonetheless continue to prosper and innovate (3M, which most recently brought the world post-it notes, comes immediately to mind).
As an aside I note that I have worked for two non-union companies that were once leaders in their fields and that went through painful downsizings in order to reduce costs. However, the managements that played defense, trying to protect profits and market share, utterly lacked creativity, and could neither come up with new products nor improve their current product mix. The last company I worked for tried to customize its products based on the demands of their “most important” (but not always best paying) customers even though this meant that they totally misjudged new markets and new trends and alienated potential customers because the product redesigns were too idiosyncratic. Both companies also deliberately ran off many of their best employees, who were also some with the highest salaries, the most tenure, and the largest potential future pension costs. One company is near death despite having been sold to another corporation, and the other is languishing, having recently located to another state to save more money, only to find that it cannot find new employees with the same level of expertise as previously.
I understand your optimism, and in the long run perhaps capital and creativity will be freed up, but there are people whose lives have never recovered from successive company downsizings, and entire cities which have never recovered from the loss of jobs in their community. People cannot instantaneously regroup, relocate, and rebuild their lives. Has anyone ever researched in detail the extent to which an economic recovery displaces workers or the proportion of new workers vs old workers or the relative distributions of incomes following large-scale layoffs and recoveries?
MICHAEL WRITES
I liked the Patrick Goldstein article too -- thanks for the link. Here's a semi-similar piece by Anne Thompson, which supplies additional info and quotes. Interesting, if semi-dismaying, to see that not only are the boring ol' movies tanking, so are the more adventurous ones. Usually what happens in eras like this is that creators take some chances, audiences find a few new things that they like, and the industry gets the message and roars on. This time around, people just seem to be losing interest in movies period. Amazing. Looking forward to what's next!
And another interesting snapshot of how movies get made (or got made, in this case): Edward Jay Epstein on a German tax shelter that's being closed down. Interesting because Hwood learned how to take mucho advantage of it, though its purpose was to serve local production. Great passage:
"New Line Cinema, for example, covered almost the entire cost of its Lord of the Rings trilogy by combining German tax shelters with New Zealand subsidies and preselling the film in a few foreign markets."
ALEC RESPONDS
Michael –Thanks for the link to the excellent Anne Thompson piece which, nonetheless, I think tries to cover the studios asses a bit. Except for the OK “In Her Shoes,” the other films she mentioned were either supremely unoriginal or had odd casting and writing problems. “North Country” was like “Norma Rae Meets Erin Brockovich at the Ya Ya Sisterhood,” Shane Black was reworking the pointlessly self-referential riffs of his earlier “Last Action Hero” in “Kiss Kiss …” and “The Weather Man” was like a weak echo of a Charlie Kaufman film.
It was also interesting that Thompson’s myopia echoes that of the studios. I know a lot of people who talk about movies they want to see right away and movies that they will wait to see as DVDs. I don’t know exactly how people decide what film is only DVD-worthy, but I don’t think that these decisions correspond to the tent-pole, non-tent pole, indie categories that Thompson writes about. But she is right that it appears to be very tough to market films that don’t have a high profile or big star power behind them.
Patrick Goldstein also does a regular piece early in the year in which he surveys a group of teens on the upcoming films that they want to see, based on movie trailers. Apart from some old-reliables (Star Wars or Harry Potter), it is refreshing to see that the preferences of this prime-target demographic often contradict what the studios think that they should want to see. For example, just because some new actress like Kirsten Dunst is hot does not necessarily mean that an audience wants to see her in everything.
I’m also reminded of how the major studios rejected “My Big Fat Greek Wedding” and how, despite that film’s success, some studio executives and film critics still derided the audience for that film as being dull, too old and not edgy or hip enough. Predictably, there was a lot of joy over the failure of the TV spin-off of the film, as though this somehow validated those who earlier had rejected the film.
ANNE RESPONDS
I made the same connection with goldstein's story and the GM cutbacks. The studios and GM are both corporate slow-moving behemoths which are having trouble adapting to changing times. And both are in the business of creating and marketing something with artistic, technological and design elements that will appeal to the consumer. I had a friend who worked for GM until his division was sold. He went from barely showing up at the office, he had so many vacations and holidays, to learning what it was like to hustle to keep his job--with far fewer days off and a smaller benefits package. GM has created a fat work culture that will be hard to turn back. Another friend of mine worked as a car designer for BMW and had to leave because he lacked an environment where he could be creative--the corporate bureaucracy sapped everything. He now happily works at a smaller design firm. As for Hollywood, the studios must adapt; they are slowly changing to the new VOD demands that consumers are making. But the big studio motion picture bureaucracies are vested in keeping their lavish salaries, perks and lifestyles. It'll be bosses like Viacom's Tom Freston who impose economic change from above.

As for Alec's comments, there's a difference between what the studios make and what they market. There has to be a better way to make more sophisticated movies for adults—which are so difficult to market—on a smaller scale. The studio indie divisions are more capable of conceiving, executing and marketing these movies than the big studios are. I was imagining what North Country, In Her Shoes, Elizabethtown and The Weatherman would have been like if they had been made as indie films. There is a high likelihood that they would have turned out to be better films worthy of better reviews and more efficiently marketed to the people who might want to see them. Tentpoles are what the studios do best; they aren't equipped to market more challenging fare. Adult dramas like Boys Don't Cry and hip youth movies like Napoleon Dynamite and Garden State are handled best by studio indie divisions like Fox Searchlight. The studios have forgotten how to handle economies of scale.