In the latest print edition of The Atlantic, Jeffrey Goldberg wrote a piece about director Quentin Tarantino's latest film "Inglourious Basterds." The movie opened this weekend at #1, earning more than $37 million. The film was an important one for the Weinstein Co., its production company. I read last night that the film's success may result in the company avoiding bankruptcy. An article today in the Wall Street Journal says that, even with this weekend's good news, such a fate might be unavoidable.
The WSJ says:
The company co-owns the $65 million film with Universal Pictures, so it will only reap half the profits -- a symptom of the studio's financial troubles and the reason that even a hit like "Inglourious Basterds" may not be enough to save them.
But the problem really goes even deeper. The article also provides further analysis on the company:
But it got off to a slow start. The brothers wanted to grow their company into a full-fledged media empire, rather than focus on the film business, so they invested in Genius Products, a home-entertainment distributor, as well as a social-networking site called A Small World, and a clothing line, Halston.
Those investments haven't panned out, especially as the home-entertainment market -- which had experienced double-digit growth for years -- began to decline.
Earlier this year, however, the Weinsteins hired a consulting firm to help them figure out what was wrong. One of the suggestions:
They told us "to concentrate on the movie business and don't buy library titles. Leave [the other investments] to more qualified people in those areas," says Mr. Weinstein.
The library title problem is one symptom of what's likely a larger problem: the company spreading itself too thin and not focusing on its strength. The reason Miramax -- the Weinstein brothers' earlier production company that was sold to Disney in the 1990s -- did so well was not because it was a diverse media company, but because the Weinsteins were very good at finding talent and creating great independent films that reaped significant profits at the box office.
This topic interests me mostly because I once worked as an intern, a long time ago, for Miramax. I worked there before the Weinsteins left to start their new company. In recent years I also had many acquaintances that worked at their new company. Through that insider knowledge, and my general observations about the film industry, I'm not surprised the Weinstein Co. is having so much trouble.
How is today's climate different from when the Weinsteins succeeded with Miramax? In recent years larger film production goliaths have developed or purchased their own independent film companies. These are sort of big-little production film companies. Some prime examples include Warner Brothers' Warner Independent Pictures which produced last year's smash hit "Slumdog Millionaire" and even Miramax, owned by Disney.
Moreover, even beyond the big-little film production companies, the independent film house landscape has become much more competitive than it was when the Weinsteins were with Miramax. Small film houses like Lion's Gate, Summit and IFC now steal away great scripts and talent that might have otherwise found their way to the Weinsteins. Many of these new companies are less than 20 years old.
The Weinsteins are not pleasant bosses to work for. Sure, few people like their bosses, particularly in the entertainment industry, but the Weinsteins are a caricature of that. There's a talent drain that this creates with very high turnover and extremely low morale. This renewed competition also makes it difficult for the company to retain its internal talent: frustrated or burnt out workers can just go to their competitors for a higher quality-of-work-life.
The Weinsteins are obviously talented at what they do. So I don't have much doubt that they could still end up succeeding. But I think they need to really focus on their strengths. In doing so they also need to create more lower budget films -- like "Good Will Hunting," "Shakespeare In Love" and "Pulp Fiction" -- that appeal to wide audiences.