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Prime time for CBS movie bet?

The fledgling CBS Films seeks success even as industry challenges have driven several small and mid-size movie companies out of the business. Its first offering is due to hit theaters Jan. 22.

January 11, 2010|By Claudia Eller and Amy Kaufman

CBS Films' first movie is the upcoming Harrison Ford drama "Extraordinary Measures."

Some believe that's what it will take for the fledgling film division of CBS Corp. to succeed in today's punishing environment for the movie business, where declining DVD sales are undercutting profits and changes in consumer habits are upending how people view entertainment.

The upheaval has recently helped to drive several small and mid-size movie companies out of the business, or left them struggling as they've wrestled with bloated overhead and other escalating costs.

"It's really tough," media analyst Laura Martin said. "It's a hit-driven business, audiences are fragmenting, and you're competing with a lot of $100-million movies."

Despite the challenges, CBS Corp. Chief Executive Leslie Moonves and Amy Baer, head of the film unit, believe the company is launching at an opportune time, filling the void in the market created by the retrenchment or closure of once-prominent movie distributors such as debt-ridden Metro-Goldwyn-Mayer Inc., Miramax Films and Warner Independent Pictures.

Moonves, a veteran TV executive and former actor who's harbored ambitions of running a movie studio, formed CBS Films in 2007 to expand beyond his media company's ad-reliant business.

"I'm a content guy," said Moonves, who reviews and gives notes on scripts and audition tapes Baer sends him.

Although a broadcaster and a film company traditionally have little in common, Moonves says the ability to harness CBS' array of media assets -- a top network, cable channels, billboards and large collection of TV and radio stations -- gives the start-up a cost-efficient platform to promote its movies.

"We've been able to maximize our entire media campaign on 'Extraordinary Measures' from outdoor to our TV and radio spots because we have these relationships," Baer said.

The executives said another advantage is having a pay-TV deal in place with its corporate parent's cable network, Showtime, guaranteeing the films an on-air slot and money to pay part of the films' costs. CBS Films will distribute its movies in U.S. theaters and pay Sony Pictures to release them overseas and on DVD worldwide.

Moonves believes CBS' business plan, corporate-wide support and advantageous deals with creative talent make the new company less chancy than typical movie ventures.

"It's a tough market, but our risk profile is very low," Moonves said in an interview with Baer at CBS Corp.'s West Coast offices in Studio City. "The cost of the movies, the deals we've worked out and our ability to promote the movies -- we planned this right."

The launch of CBS Films, which is based in Brentwood and employs 73 people, comes at a time when ticket sales and theater attendance are showing surprising resilience despite the weak economy.

"Our timing is perfect," Moonves said. "Three weeks after the biggest box office year in history we're opening our first movie."

CBS aims to release four to six pictures a year that cost under $50 million each and can appeal to more than one segment of the audience. Baer and Moonves said CBS wouldn't be competing with big effects-driven spectacles such as "Transformers" and "Spider-Man" that cost hundreds of millions to make and promote. "We're not in that game," Moonves stressed.

Instead, CBS Films is setting its sights on the low-to-mid-range budget movies, which have been squeezed out of the marketplace by Hollywood bets on costly franchise films on the one hand, and low-budget art house and "genre" films on the other.

"It will be interesting to see if they can succeed in a segment of the market that the major studios are abandoning," analyst Martin said. "It's a contrast strategy that defies conventional wisdom at the big studios, which are making either $100-million-plus movies or ones in the $10-million to $20-million range."

Lately, however, a number of mid-range budgeted movies, including the R-rated comedy "The Hangover" and the teen-driven "Twilight" films, have been breakout hits, standing some of the conventional wisdom on its head.

Baer, who spent 17 years as a top studio executive, many of those years at Sony Pictures, said she's proud of the diverse slate of movies she's making and hopes there's a franchise or two in the company's future.

"I think our first four films are really commercial, conceptually driven films," Baer said.

CBS' opening lineup features the adult drama "Extraordinary Measures"; a romantic comedy, "The Back-Up Plan," starring Jennifer Lopez; a modern retelling of "Beauty and the Beast" called "Beastly"; and the action thriller "Faster," with Dwayne Johnson.

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