You don’t need a degree in economics to realize these are pretty shifty financial times, and that in times like these, companies will do some pretty drastic things to more strongly position themselves in the current climate and do just about anything to cut costs. One of the ways they often do this is by merging with another company… and the movie industry isn’t exempt from that (as we have seen in recent years).
But this one struck me as surprising. Apparently there are rumblings that mega studio, Paramount, is in talks to merge with either Sony or Universal. The guys over at Latino Reviews give us this:
The CEO of Gamco Investors, who owns shares of Viacom, said that Paramont and Sony might be talking about a possible merger within the next six to 12 months.
Forbes has more:
Viacom Inc’s Paramount Pictures could merge with Sony Pictures, Universal Studios or another movie studio amid a wave of consolidation in the industry over the next few months, veteran investor Mario Gabelli said in the latest issue of Barron’s.
The chief executive of Gamco Investors Inc, who owns shares of Viacom ( VIA – news – people ), said he expects dealmaking among movie studios as they seek to cut costs.
‘Today there are seven or eight motion-picture studios. A round of consolidation will occur in the next six to 12 months because of the costs of financing, prints and advertising, the benefits of globalization and such,’ Gabelli said. ‘We hear talk of something going on.’
This makes me very nervous as a film fan. The more studios there are out there producing content means a greater variety and greater competition (to keep other studios at least a little bit on their toes). Merging these mega studios, I fear, will hurt that even more than it already is. We’ll keep an eye on this.
This could effect me personally. I work at a movie theater chain called Kerasotes. Kerasotes has a deal with Sony that states, employees can’t watch Sony movies for FREE during the first 2-3 weeks from the release date. Meaning if a Sony movie came out this friday the 19th (Year One) then I and the other Kerasotes employees can’t watch it for FREE until Friday, July 3rd. So IF Paramount Pictures merges with Sony then that doubles the amount of movies that I and the other Kerasotes employees wont be able to watch the opening weekend.
Maybe a merge would void that arrangement? Who says you would be restricted from watching Paramount films too? A merger doesn’t mean that one company wipes the other out and overrides all their policies. It means they join and become a bigger new entity.
Wait, if Paramount did Iron Man, is doing Iron Man 2, Thor, Captain America, and Avengers, and Sony does Spider-man, would that mean that we might see Spider-man in the Avengers movie?
Actually I think the biggest threat is simply consolidating control with in a few companies. It looks like we are moving back to the old system of film.
I don’t put much into this either. Yes, times are tough- but wouldn’t the better solution be simply to be either a) cutting back on production and/or production costs b) make pictures with modest/lower budgets. or c) make a higher budgeted picture (s) but share the cost of production with another studio- with one getting domestic, the other foreign, and so on.
Has Paramount been having a string of high cost duds in the past few years? I can understand if it is such a case but it isn’t.
While not “all” mergers are “bad” (that’s a myth, Guther, although in some mergers, some jobs are indeed cut or downsized) as far as film studios go, it hasn’t been stellar. I think a lot of folks are still ticked about most of the majors buying up smaller studios only to dissolve them a short time later, or the way Warners handled New Line. It’s almost like, why merge with them in the first place?
Let’s say this news is true then it would be indeed depressing. If they are in problems there are countless other ways to get fit again.
Other than that, merging is one of the most stupid things two companies can do. Any manager or investor who believes this task of merging two worlds and cultures on an operative level (with countless other problems ahead) is easy and cheap seems to be stupid and should be fired.
It didn’t work for DaimlerChrysler and it didn’t work for AOL TimeWarner.
Just dont merge with Fox
Rumblings by one guy who owns some shares. This was poor, poor journalism on the part of Reuters. Looking before leaping. Stirring a shit storm where there isn’t one.
That said, the implications of such a possibility are depressing indeed. Four or five corporations already control how information is dispersed in this day and age. If Hollywood gets streamlined, that’ll choke competition out of the equation, effectively rendering the studio system obsolete. Which is why this goes no further than the stockholder with a big mouth.
Points the Reuters guy, obviously, didn’t deem worthy of bringing up. Like I said, shoddy journalism.