HOLLYWOOD REWORKS REVENUE STREAM

P. Dauman, Viacom CEO

DVD sales of new released movies (one of Hollywood's main revenue streams) continues to tumble - forcing the major studios to completely rethink their movie making/distribution model.  As multi-platform 'pay for view' takes a firmer hold on the consumer the studios are re-casting how they fund movies.

This redo of a movie's revenue stream has taken hold in Hollywood.  "Greenlighting a feature film, Paramount now restructures deals made with actors, producers, and directors to better reflect a 'partnership' relationship' on the economies of a film rather than a high upfront cost", Viacom CEO Philippe Dauman, told CGM.

"We don't mind sharing the upside of a movie with talent as long as we don't have a downside, or we have a sharing of risk" says Dauman.  "It is no longer feasible for a studio to make huge upfront payments to talent with an increase uncertainty on the back end due to faltering DVD sales."


Until recently, the big share of a movie's profits rested with the sale of DVDs and not the box office, but as consumers have moved (very quickly) to internet downloading of content the studios have scrambled to re-think how they contract with talent and, just as importantly, maneuvering to get a larger piece of the digital streaming pie.

"The way we look at the movie business is that we want to create great films and we want to manage the downside, the risk/reward equation if you will". Dauman said. "We're looking at all sorts of revenue opportunities".

Best and Happy Movie Going!
Jim Lavorato