Published: May 1, 2009

Michael London, Gary Lucchesi, Marshall Herskovitz and Gale Ann Hurd discuss current challenges in making films.

By John Horn 
June 3, 2009

What does a movie producer really do?

Before you start with the jokes, the Producers Guild of America wants to have its say. This weekend, the PGA will present its first-ever Produced By Conference, an open-to-the-public (although sold out) gathering on the Sony Pictures lot with seminars on such topics as independent film financing, digital rights, viral marketing and -- why not? -- booking private jets.

Ahead of the three-day conference, kicking off Friday, four experienced producers sat down to discuss the many challenges they face in these turbulent economic times: Studios are cutting producer deals, taking fewer risks, and finding more reasons than ever to say no. Our panel --Groundswell Films’ Michael London ("Sideways," "Milk"), Lakeshore Entertainment’s Gary Lucchesi ("Underworld," "Crank"), Marshall Herskovitz ("Blood Diamond," "The Last Samurai") and Gale Anne Hurd (" The Incredible Hulk," "Terminator") -- covers an array of filmmaking styles.

Here are edited highlights from the conversation:

Q: What does it say about your business when well-reviewed, star-filled adult dramas like "Duplicity" and "State of Play" don't work?

London: I think there is something sobering about it. I think right now there is a premium on escapist material that makes people feel good. I don't believe for a moment that adult movies are going away, but it definitely has given me pause -- not to abandon the things I am most inspired by, but to make sure I am not out of step with what people are feeling.

Lucchesi: Having once been a studio president [at Paramount] and trying to turn the business into a science, I know that it's impossible. Last fall, I looked up the top movies of the '30s, during the depression. They were the Marx Brothers, comedies, escapist movies, "King Kong" was big then. You had "It Happened One Night," so you had romantic comedies. And then you had musicals, and then gangster movies like "White Heat." So, there were certain types of genres that were working during a recession.

Q: Is the passage through which you have to squeeze narrower than before? Gary, your last two films were "Crank: High Voltage" and "Underworld: Rise of the Lycans." Is there a future where you make Philip Roth's "American Pastoral"?

Lucchesi: Before that, we made [the adaptation of Roth's "The Dying Animal"] "Elegy." We're a very practical company. We're going to keep making commercial movies and then occasionally we're going to make those movies that are very, very difficult to make.

London: My company has worked primarily in adult drama. And right now there is such an enormous challenge in getting studios to assign a distribution slot to a movie that they perceive as belonging to this shrinking market. Right now, the number of distributors has shrunk dramatically, and of the distributors that are still in business, they are reserving those distribution slots for movies they feel appeal to the so-called four-quadrant [young and old males and females] audience. It's hard to give them a rationale to devote one of their precious eight or nine distribution slots to one of our movies instead of holding it back for a tent-pole, a comic-book, pre-sold franchise.

Herskovitz: There's a structural problem that permeates the entire media business in America, which is consolidation. In the last 15 years there has been this very interesting opening up of the movie business because you could make films independently -- there were a lot of distributors, there were a lot of different ways to get a movie out there. That's starting to shrink now, and now there's starting to be a bottleneck in the distribution area. This happened to us last year with " Defiance." We had independent financing, all we needed was a domestic distributor -- which was very hard to find. We finally found one, they did a great job, but they were the last -- we wouldn't have gotten the film made if it wasn't for them.

Q: Why was it so hard?

Herskovitz: Companies fear taking risks. The perception was that it was a World War II Holocaust film, and therefore would be difficult to find an audience. A lot of people said "Sorry, no thanks. Been there, done that."

Q: Does that mean marketing is now more important than ever?

Hurd: Everything really is about marketing. What is going to get people to leave their homes to go see a film? The industry has changed. It used to be that a film didn't need to have a huge Friday night, but now everyone looks at the grosses Saturday morning. And that determines a lot: "Well, that movie bombed, I'm not going to go see it."

Q: When you start making a movie, do you have to know how you'll sell it before you even shoot a foot of film?

Lucchesi: I think the process of getting a green light is so complicated that you pretty much have to know who your audience is before you start shooting.

Herskovitz: The audience is inundated by inputs from the culture -- from television, online and films. Marketing has become so difficult -- to penetrate the clutter. And you don't always succeed, even if you have good materials. So I have to know what is going to be the imagery or the sensibility of the film that will attract people.

Q: When studios are less willing to take risks, how does that affect you?

Lucchesi: When Universal greenlit "Duplicity" and "State of Play," it also was greenlighting "Fast & Furious." They didn't know that one wasn't going to work, that one was going to overperform and another was going to underperform. They didn't know that. No one can read the future. But producers are the greatest optimists in the world. I mean, that's who we really are. We are the people that find some material and actually imagine that it could be a movie. What are the odds of that? And then not only do we imagine it can be a movie, we imagine it could be a hit, and maybe even win an award. We are the ones with the machetes going through the Amazon jungle to the places we've never been before.

Q: Can you try to crystal ball the national mood in two years? What do you think people will want to see?

Hurd: I hope my movies!

Lucchesi: My gut tells me that people are desperate for emotion.

Q: How has industry belt-tightening affected you? Does it change who you hire and how much you pay them?

Herskovitz: The studio belt-tightening has had a direct affect on many producers because they cut producer deals. Producers not only create but also nurture intellectual properties for the five, seven, 10 years it takes to get movies made. I don't think we can afford to lose that as an industry. The studios have to cut their overhead, they have to deal with their bottom line. But in terms of the future, that army of producers that was creating new properties is going away. I think that is a problem for all of us.

Q: But don't good ideas rise to the top?

Hurd: What's a good idea? Who could have predicted "Slumdog Millionaire"?

Herskovitz: The reality is that most producers are financially struggling and being driven out of the business, and you have fewer and fewer independent producers. There are a whole bunch of young people trying to come up, but in terms of experienced, independent producers just trying to get by, it's very, very difficult right now, and a lot of them are being driven out of the business. If you begin to say, "The American film industry is starting to look less creative," you have to look at the causes of that in a lot of different areas. And one of them could be that it's really difficult now for creative people to get a movie made.

Q: Are there now more awkward conversations with actors about how they are not going to earn what they are used to?

Lucchesi: Here's something that I learned as an agent. Many years ago, clients would do movies and television and they would also go back and do New York theater, and make maybe $500 a week. With the more art-type movies, it's very easy to go to somebody and say, "We know you get X amount of dollars for your big studio movie, but this is a different animal, this is like you are doing equity theater, and you've got to cut your price to do it." Most people get that.

London: I think that everyone is so cognizant of the world we live in. I'm sure there's a lot of agents who are unhappy about the fall in that pay scale, but anyone who's got their eyes open recognizes that what's important now is to keep working.

Q: Michael, you're dependent on outside financing, and that money seems to be in jeopardy too.

London: From a business perspective, I'd like to have a successful business that rewards my investors and keeps my company afloat. But we're in a culture now, a movie culture, where so little premium is placed on original ideas, as the studios veer more and more toward this notion of something that has a pre-sold element, whether it's a comic book, or a remake of a movie or a television series. Well, what do we do? What have we all done our whole lives but find and champion and support original ideas? The truth about producer deals being cut is that [the studios] are not interested in original ideas. But you are talking to a group of people who when we leave here will go to a meeting, or lunch, or a movie this evening and fall in love with something that completely defies the analysis that we are talking about here.

Hurd: Let's go back to "Slumdog Millionaire," perhaps the most profitable film out there. If you start thinking, "Who is the audience for that? A film that takes place in India?" It was clearly a struggle to get it made, and yet, if you had gambled on that film you would have the greatest return of any film last year.

Q: "Milk" won a couple of Oscars, but didn't do all that well at the box office.

London: We had certainly thought at many points that it might follow more in the path of something like "Brokeback Mountain" and some of the other Oscar movies that sort of exploded. "Milk" bore a certain burden in terms of its seriousness and its themes, and its perception in terms of the audience that it spoke to. The pop culture has become really unpredictable and really resistant. People are not going to want to stop going to see movies about grown-ups. They might be slightly different movies about grown-ups, they might not be $45-million movies about grown-ups, they may not be led by movie stars, but people are always going to want to see those good stories.

Herskovitz: There's no doubt in anybody's mind that some of the above-the-line people in this business have been overpaid for a very long time to the point where it was very deleterious for the business itself. In fact, the business-model movie, when you look at it from the outside, often looks a little bit crazy where you have a star making four or five times more profit on the movie than the studio did. The studio risked all the money and the star risked zero. That's just not a sustainable model, and it's been one of those things that's been very hard to talk about.

Hurd: The interesting thing is that the tent-pole films don't generally star the top box-office names. Having been part of negotiations, they're very tough on actor compensation because there's a dynamic there, which is for actors to raise their fees for the next film, they need a huge breakout box-office hit. So the trade-off there is, well, if you star in this tent pole we may even pay you less than your quote. If there's a next film, you'll get a significant increase.

Q: Does that mean you're having to spend more time trying figure out deals than work on scripts?

London: In the independent world, we have to do it ourselves, and that's a nightmare. It's just like the movie business has become this incredibly intricate house of cards with so many different elements. And unless you're professionally devoted to spending morning, noon and night figuring that out, it's complicated and yet it's important to understand.

Herskovitz: But let's remember that no matter how odious it is, relatively speaking it's a small part of the process.

Hurd: On the other hand, if you are too close to the process, you are blamed for having an actor unhappy with the compensation package. Then it's your fault, as opposed to the person in business affairs.

Q: What are the things that take up your days that you would not have wasted more than a few minutes doing five or 10 years ago?

Lucchesi: It's the panning for gold that's the hardest part -- you wade through a ton of material. You know, you don't have pitches anymore, so you've got a lot of spec scripts and sometimes there might be a kernel of an idea in a spec script, even though it may not be completely well-written, that you feel is worth chasing.

Herskovitz: It is very difficult to pitch these days. I spent 20 years going in a room and telling stories and making deals based on a story that I told. But we're not in that business anymore. Right now there is a project that we're trying to sell, and there's really no way to sell it other than tell the story in the room. It's an amazing, wonderful story, and it's a struggle now. And I feel like there's a potential this great thing will be lost because that means of getting that development money is gone. They don't want to hear a pitch because they are not going to pay to have a script written.

Q: How do you think technology is going to change your business?

Herskovitz: I fear that we are on the precipice right now of . . . a huge rise in piracy in America. I think that the era of illegal downloading of films is about to begin in a major way. Beyond that, what I've seen in the last two years in terms of delivery systems is utter confusion. And I think that nobody knows anything yet. I think that what's clear is that people want to go out to the movies and will continue to want to go out to the movies for a long time to come. I think that we just don't know how this whole multi-platform thing is going to sort itself out. And everybody that I talk to just throws up their hands and says, you know, "I can look at four different models and I don't know which one is going to work."

Lucchesi: Had "Milk" come out on video on demand eight weeks after its theatrical release, would it have done better? I don't know, but I'd be curious about that.

Q: What gives you reasons to be optimistic?

Hurd: What I find exciting is that my 17-year-old daughter and her friends don't want to give up going out to movies. Their choice of films is much wider than we would expect. They get excited about some foreign films -- and they forget that they are reading subtitles. We are at times underestimating the younger filmgoers and what entertainment interests them.

London: The indie world is not as healthy as we'd all like, but there is a huge wave of new directors that are creating a lot of excitement, and audiences are excited about movies that take them out of their day-to-day lives.

Herskovitz: There's a huge diversity in the kinds of movies being made, and that allows for change to happen, and that to me is the healthiest sign.

Hurd: Being at Comic-Con last summer, everyone knew at that point the response to Robert Pattinson, in Comic-Con, heralded a new star is born. It was unbelievable, I haven't seen a reaction like that since the Beatles. . . .

Q: Don't you think also that there has been a shift in the traditional notion of stars? The studios are more open to new faces, new kinds of stars. Obviously, we cycle through them a little more quickly too, but it feels like the traditional movie star notion is changing.

London: Does everybody get that, though? Do the studios get that? Do the agents get that?

Hurd: It's harder to quantify that now. If you look at television and you look at ratings, that's not necessarily capturing the audience that is viewing a particular TV series, especially something like "Gossip Girl." My daughter couldn't even tell you what time it's on, she watches it online, on demand, and every one of the actors in "Gossip Girl" is a huge star to her and her friends, which is not something that you can quantify so easily just based on . . .

Q: It seems as if the studios care most about concepts -- "Transformers," " Star Trek," " Harry Potter."

London: I think execution is king. I really do. I saw "Star Trek" last week -- I'm not in particular a tent-pole movie guy -- and I loved it. It was alive and funny and moving and imaginative, hot and smart.

Herskovitz: A lot of these high-concept movies fail when they are not done well. This notion that concept is king is already 25 years old. I think the audience is more discerning about it now. But there is a danger here that is analogous to the auto industry. More and more of the studios have placed their bets on these high-concept films, but there could be a moment where people just get tired of those films. My fear is the studios are essentially getting rid of the apparatus for creation of new content.

john.horn@latimes.com

Producing is all I do and the only credit I get. The meaning and value of that credit erodes all the time as financiers and packagers and directors seek to share it. I do something very specific though that none of those other collaborators do. I am there from the very beginning until the very end doing my best to make sure that the best team assembled, best environment created, best film made, full potential realized, best release and marketing strategy conceived, and maximum revenue (within those other considerations) achieved. It is my role to make sure that all options are considered and the ramification of each choice considered in advance.

I contribute to the script but take no credit -- yet people comment how "my body of work" has common themes and threads. I help design the production, from the look, to the cast, to the crew, to the rhythm, to the tone, to the marketing -- yet people don't think my credit is a creative one (because it has been undervalued by all those that glom on to it). I strategize how to make the film go from an idea or concept into reality -- I make the film inevitable, with attachments, with financing, with distribution, with an audience, yet somehow the industry thinks producers are interchangeable. The industry encourages that I do a volume business so that they can "service" their clients, yet they give me no support, be it financial or just reinforcement (if a project is not ready or a collaborator not a financial asset, I am the one that must deliver the news -- and even if they agree with me, they take the side of the client). 

Six years ago I was one of two key witnesses in the successful anti-trust suit against the MPAA and Studios' Screener Ban. One of the reasons we won was that the judge recognized that my livelihood was dependent not on singular films, but on the perception of my key creative role in a string of films that had a critical, commercial, and cultural impact (and how the added boost screeners gave my films was essential). Since that time, I have witnessed the devaluing of the producer credit as never before. 

We are in incredibly tough times for "quality" projects. Fewer get released. Fewer get financed. The budgets come down, and with them come lower fees. It has never been this hard over the last twenty years. When I ask myself "how am I going to survive making the kind of films I do, the kind of films I love?" my one real hope is a deepening understanding of what I bring to a project. And to me that is a deepening understanding of what it is to produce.