- This Page: Paramount’s Been in Major Trouble Recently
Paramount’s Been in Major Trouble Recently
The past couple of years haven’t been good for one of Hollywood’s legendary studios. Major blockbuster efforts stumbled hard at the box office, like the curious example of $125m folly Monster Trucks, which the studio took a $115m write-down on before it was even released in theaters. Even their supposedly reliable franchises took a hit with audiences. The latest installment of Transformers, The Last Knight, grossed over $400m less than its predecessor, while Star Trek Beyond didn’t even double its $185m budget - the generally accepted break-even point. Paramount has not had a film in the top 10 highest grossing movies list for two years running.
Outside of the blockbuster world, the studio has seen troubles with the distribution of smaller films. Paramount sold the latest installment of the Cloverfield franchise, The Cloverfield Paradox, to Netflix, surpassing cinemas altogether. Annihilation, the acclaimed sci-fi by Alex Garland, received a muted theatrical release in North America but internationally those duties fell once again to Netflix. There’s been much debate over whether or not this was a good idea Did it help increase viewership? Does it ruin the movie-going experience? but from a business point-of-view, it doesn’t seem like the actions of a flourishing studio to hand over the reins to a streaming service when it comes to some of their most anticipated offerings - even if it is financially profitable.
Paramount has taken some interesting risks recently, such as giving a wide release to the decidedly un-mainstream drama mother!. That gamble didn’t pay off, but it was an undoubtedly gutsy move, one that may not have happened if their blockbuster strategy was paying off. As it is, the studio’s much-discussed financial troubles seem to have them backed into a corner. With finances in bad shape, the studio turned to potential investment from Chinese companies. In July 2016, the Wanda Group entered negotiations to acquire a 49% stake in the company, but the talks ended soon after. Last November, Paramount lost their financing deal with the Chinese group, Huahua. That deal was supposed to finance a quarter of the films they produced over the following three years. Viacom had admitted to the press that Huahua simply stopped payment to the studio.
To put it simply: Paramount needs hits. All studios do, but it’s Paramount who stands to lose the most without those reliable profits in their roster. They have franchises like Mission Impossible and Transformers, but nothing on the scale of what Disney offers. Those series don’t release a film a year, much less several a year in the Marvel mold. It was only a few years ago that the studio dominated Hollywood, thanks to its reliable franchises and small-budget juggernauts like Paranormal Activity. So much has changed in cinema since then, thanks to the expansion of shared universe blockbusters, so Paramount may not be able to rely on the things it used to. That being said, their recent past and the events of this past week show clearly that there is a better way forward.
How A Quiet Place Could Change Paramount’s Fortunes
A Quiet Place has a lot in common with Paranormal Activity: The former may have more star power than the latter, and a slightly bigger budget, but both established themselves quickly as audience favorites and creative additions to a crowded yet popular genre. Horror is a reliably profitable field, more so in the past few years thanks to movies like IT, The Conjuring franchise and Get Out. Crucially, none of these films cost over $35m to make. Budgets were tight and profit margins expansive. They bridged the gaps between commercial and critical successes, legitimizing horror for a new age.
Most of these were also original properties. Paranormal Activity’s success gave Paramount a whole new franchise to build upon, and chances are the same could be done to A Quiet Place. Sequel talk has already begun, but the importance of investing in new ideas shouldn’t bypass Paramount. As disappointing as box office results for Annihilation and mother! were, it was still a good creative move for them to put so much trust in original properties that took a more esoteric approach to genre film-making. With better planning and distribution, the films could have done better financially. None of them were especially expensive to make and they all did great business with the critics.
If Paramount can find a way to replicate what they did with A Quiet Place good marketing, building on word-of-mouth and critical acclaim with projects like Annihilation, it would greatly benefit the studio in the long-run. Their 2016 sci-fi drama Arrival managed a similar route to success. Both Arrival and A Quiet Place succeeded because Paramount trusted their audiences with potentially tricky material. One of the alleged reasons Annihilation was treated so shoddily was because its producers feared it would be too intellectual for mainstream audiences. That’s a risk they should be willing to take.
What’s Next For Paramount?
The rest of Paramount’s slate for 2018 hints at ways they can move forward, building on the foundations of A Quiet Place: Aside from the two major franchise efforts - Mission: Impossible - Fallout and Transformers spin-off Bumblebee - there is Overlord, the rumored fourth installment in the Cloverfield world, and Action Point, a Jackass-produced slapstick comedy. Their slate is small - nowhere near as packed as Disney or Warner Bros. - but their strategy makes sense: Stick to the big names but keep some money aside for low to mid budget properties that can fill previously ignored niches.
In the long-run, it will take a while for Paramount to look at what A Quiet Place is doing and re-adjust their business plans accordingly. They’re still looking for those franchise hits - a Sonic the Hedgehog animated movie is in the works, the Top Gun sequel has a Summer 2019 release, and they’re giving the Terminator franchise another go. Paramount’s strengths lie in their smaller efforts and their willingness to invest in those stranger films that don’t fit in elsewhere. It makes greater sense for them to move forward with that strategy than in trying to copy Disney as a blockbuster king. The studio hired Jim Gianopulous to be their new CEO last year and Chairman, so he inherited most of these films before landing the job. However, A Quiet Place was the first project greenlit under his tenure, which hints at a CEO who knows exactly what Paramount needs. Their fortunes don’t look great right now, but with A Quiet Place and the potential future it offers, it could be much brighter.
