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Disney Studio Changes Have Hollywood Talking


Our business news starts with fewer movies, and possibly jobs, at Disney.

These are tough times in the movie business. Yes, Pirates of the Caribbean: Dead Man's Chest, did have the biggest opening of all time. It took in more than $130 million in its first weekend.

Still, all that money apparently won't be enough to stop the Walt Disney Company from implementing major cost cutting. NPR's Kim Masters reports.

KIM MASTERS reporting:

Disney has been enjoying a good summer. There was this:

(Soundbite of movie "Pirates of the Caribbean: Dead Man's Chest)

Ms. KEIRA KNIGHTLEY (Actress): (As Elizabeth) Captain Sparrow?

Mr. JOHNNY DEPP (Actor): (As Captain Jack Sparrow) Come to join me crew? Welcome aboard.

Ms. KNIGHTLEY: (As Elizabeth) I'm here to find the man I love.

Mr. DEPP: (As Captain Jack Sparrow) I'm deeply flattered, son, but my first and only love is the sea.

MASTERS: And there was that:

(Soundbite of movie "Cars")

Mr. TONY SHALHOUB: (as Luigi) You are a famous racecar? A real racecar?

Mr. OWEN WILSON: (as Lightning McQueen) Yes, I'm a real racecar. What do you think? Look at me!

Mr. SHALHOUB: (as Luigi) I have followed racing my entire life. My whole life.

Mr. WILSON: (as Lightning McQueen) Then you know who I am. I'm Lightning McQueen.

Mr. SHALHOUB: (as Luigi) Lightning McQueen?

Mr. WILSON: (as Lightning McQueen) Yes! Yes!

Mr. SHALHOUB: (as Luigi) I must scream it to the world!

MASTERS: Movies like Pirates of the Caribbean II, and Cars, can lube-up Disney's entire engine. They fueled the theme parks and the consumer products division. So, for some time now, Disney has been saying that it will make fewer adult-oriented films, and in fact, fewer films overall.

The studio is now poised to cut an unspecified number of staff positions and reduce its slate of movies, from about 18 a year, to ten, according to Disney sources. The problem for Disney and every other studio is that movies are staggeringly expensive, says entertainment industry analyst Harold Vogel.

Mr. HAROLD VOGEL (Managing Director and Senior Entertainment Industry Analyst at Cowen and Company): Budgets of each individual picture, and the tent poles in particular - the main films that they release around Christmas and in the summer - have risen to the $200 million level, and those kinds of bets are so large that they have to make cuts elsewhere.

MASTERS: Disney lost money on movies like The Alamo and Annapolis, films created under the Touchstone banner. That label was created in 1984 to accommodate Splash, the film with the mermaid, which was deemed too risqué to be associated with the Disney brand name.

Now, it's not so much a question of risqué, as it is a matter of risk. The studio will make only two or three Touchstone movies a year, concentrating on family films released under the Walt Disney Company banner. Analyst Vogel says the changes at Disney are part of the most dramatic contraction in the film business in decades.

Indeed, in recent weeks, Fox, and then Paramount, cancelled big budget movies that were about to start filming. As costs have risen and few stars seem to draw crowds, Vogel says studios have reason to be nervous about green-lighting projects.

Mr. VOGEL: Enough of these large projects have not done well, and Hollywood now sees that the DVDs, which had carried a lot of the prospects and hope for the larger films, are not selling to the same degree that they had been.

MASTERS: Disney releases fewer movies. The studio needs to maintain a pretty high batting average. For the near future, it would seem to be in good shape.

The studio made two Pirates of the Caribbean sequels at once, so it will have another installment for next summer. There will also be another Pixar film, and another episode in the Chronicles of Narnia is in the works, for 2008.

Kim Masters, NPR News, Los Angeles. Transcript provided by NPR, Copyright NPR.

Kim Masters
Kim Masters covers the business of entertainment for NPR News. Her reports can be heard on NPR's award-winning Morning Edition, All Things Considered, and Weekend Edition. She joined NPR in 2003.