The Big Picture

by Ben Fritz

  “Wow, is Pascal having an impact on television!” said NBC’s president, Robert Greenblatt, in a sarcastic e-mail.

  “Jeez zzz what did I ever do to mr.Greenblatt,” she replied, after Mosko forwarded the note to her. “How awfully rude.” In her view, she was only helping Mosko when and where her relationships proved useful, and she didn’t deserve scorn for lending a hand. “I have never ever gotten in your business except to be helpful to you and you know that,” she told him. “I resent that anyone would think otherwise.”

  Regardless of fault, the bonds between TV and movies at Sony were so poisoned that cooperation was nearly impossible. And any efforts by the film side to attempt rapprochement were viewed with hostility by those in TV, largely because these efforts arose only when television was gaining the upper hand in pop culture. “Oh, now you want to work with us?” Team Mosko seemed to be saying, as the wall between the two businesses rose even higher.

  This was a shame, because Sony was well positioned to become a leader in a time of blurred lines. As projects that started life as movies, such as Fargo, Westworld, and Lethal Weapon, became hits on TV, having both businesses under the same roof could have benefited Sony. But little sharing of ideas occurred between executives in different divisions, and no directors or writers who worked on Sony movies flowed seamlessly to Sony television shows, or vice versa.

  Even the direst of circumstances were viewed as a zero-sum game, in which one side could benefit at the other’s expense. When the hack nearly brought down Sony Pictures in late 2014, executives in the television unit started whispering to the press that they were blameless victims of the motion picture group’s incompetence in greenlighting The Interview, which apparently sparked the hackers’ ire.

  “With SPE’s leadership standing by the movie as hackers’ threats grew more brazen, the resentment among Sony’s TV constituency also grew,” read an article on the Hollywood industry website Deadline, ideas clearly planted by sources in Sony Television. “In private conversations, some of them express anger at being dragged into a controversy they had no part in.”

  Lynton was well aware of Mosko’s unhappiness, in particular how much he chafed at having a rank lower than Pascal’s. But status and titles mattered little to Lynton, and he never resolved the issue. “Steve Mosko is actively campaigning to be made [chief operating officer] of SPE,” he complained to Nicole Seligman, president of Sony Corporation of America, a friend and a fellow Harvard graduate who was previously a high-powered attorney in Washington, D.C. “Steve/COO? Oy,” she replied.

  The cool, cerebral, and sophisticated CEO had little in common with the salesman-to-his-soul television chief, and though they didn’t openly feud, they didn’t hide their distaste for each other. It was common knowledge in Hollywood that Mosko didn’t respect his boss. He was said to be particularly peeved after the investors’ day in 2013, despite the fact that Lynton boasted about a “significant shift in emphasis” from film to TV. To Mosko, they were empty words that his boss didn’t really believe. If he did, the TV chief figured, why did Lynton specifically praise Pascal as “one of the most diligent and effective executives in the business,” with an “unparalleled creative vision,” but when discussing television, tell the crowd only about what “we” had accomplished, with no mention of his top TV executive?

  Lynton’s words certainly weren’t equitable. But Mosko’s reaction was yet more proof that even on a day that couldn’t have been more important to Sony Pictures, he viewed every word through a “movies vs. television” lens.

  Some inside the company encouraged Lynton to push back against his ambitious TV chief. They noted that most of Sony Television’s profits came from cable channels it owned in other countries, particularly the Hindi-language Sony Entertainment Television, a powerhouse in India. In fiscal 2012, Sony’s networks generated $238 million in profits, compared to $220 million from television production.

  Foreign networks were perhaps the only business in which Sony Pictures proved willing to make significant investments in the twenty-first century, and those investments paid off. Starting at just $12 million in fiscal 2002, network profits skyrocketed over the next decade. That business reported to Mosko, but he was not as intimately involved in it as with production and sales, which were more directly related to his background.

  David Goldhill, the president of GSN, was a Lynton ally who warned him that “your tv guy is very political and spending a lot of time cultivating the press. Growth in tv profitability has been mostly india and gsn, and you’re directly responsible for both. Credit going to the wrong place.” He told Lynton, “You . . . shouldn’t be positioned as the film guy forced to turn to his tv genius to bail him out. Insiders always know the truth but there’s a reason political execs pull this shit.” Lynton agreed with Goldhill, as evidenced in his short response, decipherable only to Hollywood insiders: “And Bruce Rosenblum tried this.”

  Bruce Rosenblum was proof that Sony’s internal feuds and Steve Mosko’s resentments weren’t unique. For Lynton and others like him, Rosenblum was like a character in one of Aesop’s fables, warning of the dangers of television executives whose egos grow too big. Rosenblum had been the head of television at Warner Bros. Between 2010 and 2013, he and the heads of film and home entertainment competed to succeed that studio’s CEO as he prepared to retire. Most in Hollywood thought the job was Rosenblum’s to lose, since TV was Warner’s most profitable and consistently successful business. But like Mosko, Rosenblum was a salesman whose public politicking for the job put off his more refined boss, Time Warner’s CEO, Jeff Bewkes. In the end, Bewkes chose the home-entertainment chief, Kevin Tsujihara, a fellow Stanford MBA. Rosenblum left soon after and didn’t find another job as powerful as running Hollywood’s largest television studio.

  Rosenblum’s fate more aptly foreshadowed Mosko’s than anyone may have realized at the time. Although Sony wasn’t yet looking for a new CEO, there was no question Mosko would be gunning for the position once it opened up. He had earned it, he and his supporters believed, and more important, television had earned it.

  But when Mosko’s contract expired in 2016, Lynton had a different fate in mind for him. As he had done with Pascal a year prior, he told his top television executive that it was time to go, and didn’t renew his deal. But unlike his decision concerning Pascal, this one wasn’t about performance. It was simply about a personality conflict. Lynton believed Mosko’s ego had grown so large as to be more of a hindrance than a help to his studio.

  And unlike Pascal, Mosko was not given a multi-million-dollar production deal to stay at Sony.

  Isolated and atrophied cultures often change much more slowly than the world around them, and the way studios like Sony treated their television businesses was the perfect example. By 2016 it was undeniable that TV generated the bulk of Hollywood’s profits and its cultural cachet, but still, Steve Mosko was never going to be treated with the same amount of respect as Amy Pascal. Yes, he was ambitious and conniving and a samurai master of corporate politics, but the same could be said for half the film executives in Hollywood who were never kicked to the curb so long as they remained successful.

  Part of the reason the movie business was struggling throughout the 2010s was that its leaders couldn’t adjust to the fact that they were no longer the center of the pop-culture universe, around which all other media orbited. Movies still had an important place, of course, but they no longer had the first and foremost claim on the best talent, the critics’ acclaim, and the audiences’ attention.

  Success in film now would mean accepting its diminished position in the world and a carefully thought-out assessment of what movies can still do that television and streaming can’t.

  Part 2

  Where Hollywood is Headed

  10

  The Terminator

  Disney, the Perfect Studio for the Franchise Age

  For years, Dick Cook had been trying to get his hands on one of Disney’s animated classics.
>
  The head of the Walt Disney Company’s film studio for most of the 2000s wanted more branded movies to release, and what better source than his studio’s beloved collection of cartoon hits, many of which seemed ripe for live-action remakes? But the men who ran Disney animation, Walt Disney’s nephew Roy and then Toy Story‘s director, John Lasseter, kept telling him to get lost. Snow White and Pinocchio and Cinderella were classics for a reason, and they would not let their legacy potentially be sullied by a live-action film they couldn’t control.

  After years of lobbying, Cook finally got his colleagues in animation to let him have a crack at one of Disney’s less iconic films of yesteryear, Alice in Wonderland. Well known but never listed among the studio’s greats, it was a low-risk way to let the live-action studio, which was struggling to find an identity, try something new with something old. Alice, directed by Tim Burton and released in 2010, succeeded beyond anyone’s expectations or imagination, grossing $1 billion globally. And it kicked off a wave of animation remakes, all hugely successful, that has come to define Disney’s live-action movie brand.

  It also provided the final piece of a puzzle that no one previously thought could be found: how can a Hollywood studio be consistently hugely profitable? For more than a century, moviemaking has been seen as a business of inevitable highs and lows; good years have a few more hits than misses, and bad years have a few more misses than hits. But Disney proved that it’s possible to create release slates on which almost every movie is a hit, generating profits beyond anything seen in Hollywood before. It has done that with one word: branding. Nearly all of Disney’s films fit into a narrowly defined brand that supports big-budget franchises, such as Marvel superheroes, Star Wars space adventures, Pixar and Disney animated family films, or live-action remakes of animated classics.

  If Sony Pictures is the textbook example of a movie studio suited to the early 2000s, Disney is the exemplar of our modern franchise film era.

  Its dominance is hard to overstate. Beginning in 2013, Disney has ranked number one or number two at the box office every year, despite consistently releasing fewer movies than the other five major studios. Of the forty highest-grossing films released between 2013 and 2016, eighteen came from Disney. Its profit margins over that period skyrocketed, from the roughly 10 percent other movie studios maxed out at, to nearly 30 percent, a previously unimaginable high.

  It was easy for competitors to snipe that anyone could dominate the movie business when they were releasing the third Captain America, a sequel to Finding Nemo, or the first new Star Wars movie in a generation. But the consistency of Disney’s success, from Frozen to Iron Man 3 to Maleficent to Guardians of the Galaxy to Inside Out, Rogue One, and Beauty and the Beast, is unprecedented in modern movie history. In a single two-month span in 2016, it released three blockbuster hits, the animated Zootopia, the live-action remake of The Jungle Book, and the Marvel superhero blowout Captain America: Civil War. Together, they grossed $3.1 billion. That’s more than every Sony release, combined, grossed in 2014, 2015, or 2016.

  In Hollywood today, the simple truth is that there are two types of movie studios: Disney, and those that wish they were Disney.

  Understanding why studios have turned so aggressively toward franchises, sequels, and superheroes and away from originality, risks, and mid-budget dramas takes more than an appreciation for the financial pressures faced by executives like Michael Lynton and Amy Pascal. Just as Olympic swimmers can’t help but pace themselves against Michael Phelps, Sony and its competitors have for years been jealous of and frustrated by Disney. Hollywood is a herd industry. Its executives are constantly looking out the side window or at the rearview mirror and asking, “Why aren’t we doing that?”

  For those peering at Disney, that means slashing the number of movies made per year by two-thirds. It also means largely abandoning any type of film that costs less than $100 million, is based on an original idea, or appeals to any group smaller than all the moviegoers around the globe.

  Disney doesn’t make dramas for adults. It doesn’t make thrillers. It doesn’t make romantic comedies. It doesn’t make bawdy comedies. It doesn’t make horror movies. It doesn’t make star vehicles. It doesn’t adapt novels. It doesn’t buy original scripts. It doesn’t buy anything at film festivals. It doesn’t make anything political or controversial. It doesn’t make anything with an R-rating. It doesn’t give award-winning directors like Alfonso Cuarón or Christopher Nolan wide latitude to pursue their visions.

  Though Disney still has flops, it has fewer than any other studio—fewer than anyone ever dreamed was possible in a business that has for decades seen more failures than successes and has been compared to riding a roller coaster. Disney has, in short, taken a huge chunk of the risk out of a risky business.

  Many in Hollywood view Disney as a soulless, creativity-killing machine that treats motion pictures like toothpaste and leaves no room for the next great talent, the next great idea, or the belief that films have any meaning beyond their contribution to the bottom line. By contrast, investors and MBAs are thrilled that Disney has figured out how to make more money, more consistently, from the film business than anyone ever has before. But actually, Disney isn’t in the movie business, at least as we previously understood it. It’s in the Disney brands business. Movies are meant to serve those brands. Not the other way around.

  Even some Disney executives admit in private that they feel more creatively limited in their jobs than they imagined possible when starting careers in Hollywood. But, as evidenced by box-office returns, Disney is undeniably giving people what they want. It’s also following the example of one of the men its CEO, Bob Iger, admired most in the world: Apple’s cofounder, Steve Jobs. Apple makes very few products, focuses obsessively on quality and detail, and once it launches something that consumers love, milks it endlessly. People wondering why there’s a new Star Wars movie every year could easily ask the same question about the modestly updated iPhone that launches each and every fall.

  Disney approaches movies much like Apple approaches consumer products. Nobody blames Apple for not coming out with a groundbreaking new gadget every year, and nobody blames it for coming out with new versions of its smartphone and tablet until consumers get sick of them. Microsoft for years tried being the “everything for everybody” company, and that didn’t work out well. So if Disney has abandoned whole categories of films that used to be part of every studio’s slates and certain people bemoan the loss, well, that’s simply not its problem.

  Iger, himself a fan of such decidedly non-Disney fare as Spotlight, winner of the Oscar for best picture in 2016, has a clear-eyed view of what his company is doing. “There’s a difference between being a moviegoer,” he said in his office, in late 2016, “and running a really successful movie business.”

  Just Another Studio

  For most of the 2000s, Disney looked similar to any other studio. Still partly inspired by a 1991 memo from Jeffrey Katzenberg, then its studio chairman, to focus largely on “singles and doubles,” it released as many as thirty films per year, in all genres, for all audience groups, and at all budget levels. Only occasionally did it swing for the fences with a would-be tentpole, like the computer-animated Dinosaur of 2000 and the World War II adventure film Pearl Harbor of 2001, which was directed by Michael Bay and starred Ben Affleck.

  Some years it was number one at the box office and some years it was number six, but there was little remarkable or special about Disney’s studio. In fact, some Disney executives admired the more consistent success of competitors like Sony, which under Amy Pascal seemed to simply do a better job of picking hit movies at a time when that was the most important skill.

  The only thing that really made Disney distinct was its animation studio. But this was not the era of Snow White or Sleeping Beauty or even 1990s hits like The Lion King. Disney Animation had fallen on hard times, and the 2000s were filled with forgettable duds such as Treasure Planet, The Emperor’s New Groove, and Home
on the Range.

  Perhaps its biggest asset, which in hindsight seems remarkably underutilized, was the studio’s brand name. Universal and Paramount didn’t mean anything to consumers, but Disney signaled that a film would be kid-safe and family-friendly. However, only about half of Disney’s releases in the early 2000s placed the company’s name above the title. And most of those were lower-budget, goofy fare, like Tim Allen’s Santa Clause series, Anne Hathaway’s The Princess Diaries, or inspirational sports films like Remember the Titans. Not safe for anybody over thirteen who wasn’t dragged in by a kid, in other words.

  Much of the rest of the studio’s output came from the Touchstone label. Launched in 1984 with the mermaid romantic comedy Splash, Touchstone encompassed pretty much any and every type of film not appropriate to be labeled as Disney. Action movies produced by Jerry Bruckheimer, such as Armageddon and Con Air, were Touchstone movies, as were Pretty Woman, the Coen brothers’ O Brother, Where Art Thou?, Wes Anderson’s The Royal Tenenbaums, the Jodie Foster thriller Flightplan, and an adaptation of the beloved sci-fi/comedy book The Hitchhiker’s Guide to the Galaxy.

  These are all films, notably, that the Disney of today would never release.

  Even Tim Burton’s The Nightmare Before Christmas, now considered a Disney animated classic, was released under the Touchstone label in 1993 because it was considered too scary to use the parent company’s brand name.

  The remaining films came from Miramax, the lower-budget “indie” label run by the brothers Harvey and Bob Weinstein. Disney bought Miramax in 1993, at the height of the mania surrounding hits pouring out of the Sundance Film Festival. Miramax was for years a reliable source of Academy Award winners like Shakespeare in Love and movies that, when made cheaply, could be hugely profitable, like Good Will Hunting and Pulp Fiction. But by the 2000s, Miramax was venturing into more expensive territory and faced big losses on movies that failed to deliver the necessary returns, such as Martin Scorsese’s historical epic Gangs of New York and the Ben Affleck thriller Reindeer Games.