It's Tinsel Town's latest dilemma: hire a big star - or make an entire movie.
Increasingly, film executives are opting for the latter. Socked with soaring price tags on everything from box-office hits to duds, studios are scrambling to squeeze production costs, advertising and distribution outlays, and runaway star salaries.
And the effect of the cost-cutting measures they're putting in place will play out on the silver screen well into the next century, say industry analysts. For the next five to 10 years, they say, Hollywood will produce fewer movies with fewer big-name stars, lesser-known casts, fewer special effects, and more experimentation.
"Hollywood's mantra for the millennium is reduced risk," says Martin Grove, cinema columnist for Hollywood Reporter. "Box-office income has been going up for years, but costs have been going up faster. As a matter of sheer survival, studios will be giving us far fewer megabuck blockbusters [that are] full of special effects and aimed at everyone, and more smaller films which rely on characters and stories and are aimed at specific age groups."
Many moviegoers have already noticed the fallout as a spate of low-budget films aimed at teenagers has hit theaters - movies such as "She's All That," "Go," and "I Know What You Did Last Summer." Besides being aimed at the lucrative, largest-growing group of moviegoers - people age 12 to 25 - these films try to cash in on up-and-coming TV sitcom actors who cannot yet demand big Hollywood salaries. Among these stars are Neve Campbell and Jennifer Love Hewitt from "Party of Five" and Sarah Michelle Gellar of "Buffy, the Vampire Slayer."
Entire budgets for many of these new lower-cost films are actually less than the $20 million price tag it would cost to hire one big-name star, such as Tom Cruise, John Travolta, or Tom Hanks.
But star salaries is only one area where studios are cutting back. Some studios, such as Sony Pictures and Disney, are consolidating operations and pink-slipping high-paid executives. Others, such as Universal Studios and 20th Century Fox are cutting back on the number of scripts they put into development, and on the number of features that make it to the screen. Many will lean toward hiring second-tier screenwriters and casts.
Still other studios will maintain the same output of movies but will rely on fewer special effects - which are very costly. "It's not like we won't still plan the occasional big-event picture, it's just that there will be two or three, not 10," says Barbara Dixon, senior vice president of publicity for Columbia Pictures Motion Picture Group. For Christmas this year, she says, Columbia is releasing "Stuart Little" based on the stories by by E.B. White. "We created this wonderful non-animated creature but when it came time for production, we found we needed a computer design for fur that cost a fortune. Because of these soaring costs, we have to pick and choose very carefully which films we can afford to sink that kind of money into."
According to the Motion Picture Association of America (MPAA), the average film for 1998 cost $78.1 million to film and market. That total includes includes about $53 million in actual production costs, plus about $25 million for prints and advertising costs - a rise of 13 percent over 1997. The increase reflects higher costs for things like film prints, which have gone up $3 million per picture.
But it is also a measure of the pressure to purchase more advertising and print promotion to insure a film's success amidst a clogged schedule of other releases.
"The amount studios spend to promote a film in the days leading to its release is astronomical," says Paul Degarabedian, President of Exhibitor Relations Company, a box office tracking firm in Los Angeles. "They can't take the chance that their picture won't make it to the following weekend."
Picking up the tab for films that did not make it to the next weekend or even to the screen at all is part of the crunch hitting Hollywood. Although the press is full of record box office figures (1998's was $6.95 billion, a 9.2 percent increase over 1997) and news about megahits like "Titanic," "Armageddon," "Saving Private Ryan," such successes have to make up for scores of failures.
"Unhappily, movie success is migratory and devilishly elusive," says MPAA president Jack Valenti. "Of 686 films produced in the US, some 177 never got a play date, never saw the inside of a theater."
Despite the concern expressed by many industry executives, not everyone is worried: some observers say the current belt-tightening is just a cyclical phenomenon.
"Basically what you have now is a changeover from the Hollywood mogul system to the Harvard-Yale MBA perspective," says Cody Cluff, president of the Entertainment Industry Development Corporation, which overseas location shoots in Los Angeles. "The old family moguls loved films and wanted to make what people loved. These new folks have to be concerned with shareholders and earnings per share. They are looking for what will produce profitable films on a regular basis."
But there will be layoffs in the film industry, Mr. Cluff admits, especially in Los Angeles, where a 20 percent cutback from last year is already taking place. in positions for set designers, gaffers, and electricians.
Still, there may be artistic advantages to emerge from the cost-cutting. Because films are being shot in places like Canada and Australia to save money - the shooting cost of "The Matrix" ($60 million) in Australia was reportedly half what it would have been in the US - some directors may opt to spend the same amount of money, but take their time, and try to make a better film.
"With the differential savings from favorable exchange rates in foreign countries, you'll see some filmmakers take seven weeks to film a film they could otherwise do in five," says Len Klady of Daily Variety. "Then you're likely to get a better film."