At Creative Artists Agency's recent corporate retreat in Ojai, Walt Disney Co. Chief Executive Bob Iger was invited to expound on the future of the entertainment business and field questions about the media giant.
He talked about Disney's decision to make fewer movies. He talked about the acquisition of Pixar Animation, producer of the soon-to-be-released "Up." He talked about the studio's new deal to distribute films from director Steven Spielberg's DreamWorks SKG.
Iger wasn't asked about one segment of Disney's business -- Miramax Films, the specialty label that no longer appears to fit into the company's strategy to focus on family and big-event pictures.
Specialty divisions, which make offbeat movies aimed at sophisticated adult audiences and critics, do not typically generate the big returns that studios demand from their blockbuster-oriented priorities. That's more important than ever as Hollywood looks to make fewer but more reliable bets with broad comedies and easily marketable sequels and prequels. Films such as "Paul Blart: Mall Cop" and "Star Trek" are driving ticket sales and theater attendance to record levels this year.
In the wake of Disney's rival media companies retrenching from their smaller film labels, many in the independent movie business fear that a similar fate awaits Miramax, one of only three such operations still in existence. Time Warner Inc. shut down two labels -- Warner Independent Pictures and Picturehouse -- while Viacom Inc. consolidated its Paramount Vantage unit into Paramount Pictures, and News Corp.'s 20th Century Fox closed Fox Atomic.
"People are as interested in seeing our movies as they are studio movies," said John Sloss, a sales agent who sold distribution rights for such independent hits as "Little Miss Sunshine" and "Napoleon Dynamite." But for the corporate parents under pressure from stockholders "there's not enough upside from these divisions, so they're an easy target," he said.
Walt Disney Studios Chairman Dick Cook says the company doesn't have Miramax in its cross hairs.
"There is no for-sale sign on Miramax," Cook said. "It's a great place to find new talent and nurture interesting projects. And when you do hit it, it can be extraordinarily profitable and gives an added dimension with not a giant amount of overhead."
Miramax is a long way from its glory days under temperamental moguls Harvey and Bob Weinstein, who once dominated the specialty film world with such modern-day classics as "Pulp Fiction" and "Shakespeare in Love." Whereas Miramax used to regularly release movies that crossed over into big hits among mainstream audiences, in the last three years the studio has fielded only one -- the 2007 best-picture Oscar winner "No Country for Old Men," which made a $50-million profit that was shared with Paramount Vantage.
Rival Fox Searchlight, on the other hand, as the result of blockbusters such as "Slumdog Millionaire" and "Juno," now consistently beats Miramax in the game at which it once excelled.
"Do we want a breakout hit? Sure," Cook said. "That kills a lot of ills. But in the years where you don't have box-office hits, you have to have faith in the management and the direction of the studio -- which we do."
After the Weinsteins parted bitterly from Disney in 2005, Cook chose Daniel Battsek, who was overseeing Disney Studios' international arm in London, to run Miramax.
Disney doesn't break out the financial performance of Miramax, and Cook declined to say whether the unit was profitable. Miramax released eight movies last year, including the religious drama "Doubt," based on the Pulitzer Prize-winning play. Those films generated $65.8 million in total U.S. ticket sales, down 50.3% from $132.3 million for the eight films that Miramax released in 2007.
Battsek said the success of hits like "Slumdog" and "No Country" proved that smaller movies could still cross over to become mainstream hits. "There have been peaks and troughs, but a wide range of independent films continue to perform well."
Miramax today is a much-scaled-back specialty label from its heyday. Disney slashed the staff to 80 from 500, pared the annual production and marketing budget to about $250 million from $750 million and capped movie budgets at $20 million.
Since then, things have only gotten tougher for Hollywood. Adult dramas have been struggling to find audiences at the box office and the independent market has been hurt by a glut of films in theaters. That has led Battsek to revise his original plan to release 10 pictures a year down to six to eight.
"Because of the overall economic climate, as well as the market for specialized films, we have to focus even harder on choices we make," he said.
