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peter guber

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One of Hollywood's most accomplished producers, Peter Guber was formerly the studio chief at Columbia Pictures and chairman and CEO of Sony Pictures. He is now chairman of Mandalay Entertainment, which he founded in 1995. The films he has produced -- including "Midnight Express" (1978), "The Color Purple" (1985), "Rain Man" (1988), and "Batman" (1989), among many others -- have reportedly earned more than $3 billion in worldwide revenue, and have been nominated for numerous Academy Awards. Here, he discusses how Hollywood has changed over the years: the explosive increase in budgets; the expanding ancillary markets for films; and why marketing a movie is now so critical to success.

This interview was conducted in June 2001.

What drew you to the film business?

Nothing drew me to the film business. I was propelled by the fear and anxiety of Vietnam. I had been drafted into the Marines. My brother was already serving in Vietnam. I bought, if you will, a stay of execution -- both literally and figuratively -- and went on to graduate school of business from the law school that I was attending. It allowed me to reach the ripe old age of 26, and begin to recruit ... for jobs. So that was really why I was in the business school and how I came to California and the movie business.

What kinds of things did you do when you started out?

The first things I did was to deal with fear and worrying. I did a lot of worrying. I feared that I knew nothing, and I worried that I wouldn't learn anything. And the truth is that that's the truth, even now, 32 years later. ... [What William] Goldman wrote in "Adventures in the Screen Trade," that "Nobody knows anything about anything," is really true. ... Everything's a work in progress. I had an abundance of curiosity, which helped me go through the minefields of this strange business. ...

I've been reading all these books about what everybody calls the last great "golden age" of Hollywood, and your name keeps popping up. What was the atmosphere like in the late 1960s and early 1970s?

The business then was in a revolution, not an evolution. People consider the digital revolution. Well, it's an evolution really, now, what we're looking at. Then it was a revolution. It was a business that passed out of the Jack Warners and Jimmy Stewarts and Cary Grants and James Cagneys and a host of old timers, the Darryl Zanucks ... who really ran the business.

It was a cottage industry, it really was. When I came to Columbia, Warner Brothers was a $400 million company. That was the cost of "Titanic," with prints and advertising worldwide. The whole company was $400 million. And films were the business of the business. There wasn't really much of a television business. There was some series business. There was nowhere else that the features went after their theatrical run -- a little bit with network television and some syndication packages. International was called "foreign" then. It was foreign to most of the people in this business. It was that place across the ocean where the films played after nobody here was really interested in them.

As a consequence, the business, if you will, morphed, because being young in the late 1960s became the highest resource that a company could have. Young somehow meant they knew what they were doing. It meant wisdom. But it really wasn't true, of course. It just meant they were young. The whole business went through this incredible transition, going from "Darling Lil" to "Easy Rider" in the same year -- big lumbering musicals, where the movie stopped for two people to sing to the camera. And then, all the sudden, there were these two folks on a motorcycle racing across the West and the picture cost $400,000 -- the catering bill of "Darling Lil" -- and suddenly the world changed, in an instant.

It seems like so many great pictures came out of that time, and from the studios. Why do you think that was?

Well, in the early 1970s, the whole revolution was that there were new conversations and new voices that were being listened to in these companies. These big lumbering companies that were essentially movie factories were all the sudden listening to new voices. They were trying out new people -- people that came from commercials, people that came from all walks of the film (what I call) training business. And as such, when you have so much unconvention, you have a lot of new ideas popping up, and people willing to take chances on it.

The importance of marketing, in terms of success of a film, is like air to all of us. ... The minute you start the process of deciding to make a film ...  you're in the process of selling. If you don't understand that, you're not in show business. You're just not.

And of course, a film I made then, "Midnight Express," for $1,750,000 -- that was the price of the airfares back and forth for "Seven Years in Tibet," which we made [in 1997]. So you're talking about the risk/reward ratio was so different. You didn't have to launch a picture.

A picture we recently made, they spent $40 million just marketing the picture in North America alone -- not the cost of the picture, not international, just U.S., North America, Canada alone -- $40 million in prints, advertising, releasing costs, costs through the first two weeks. So if that film doesn't work on Friday night, every executive in the business in that company gets sphincter arrest, because there's nowhere to go.

Back then, there were platformed releases. You released them in eight cities and you'd move the film out. You'd be able to spend a whole lot less, even proportionally, on the marketing of a film, and therefore you could take more chances. It wasn't just the cost differential, even the talent differential. ... Today, it's a different game.

People have also said that, back then, it was possible for one or two guys to go into a studio and sell their idea with their passion. Was that also your experience?

Passion was, is, and always will be the fuel of the dream machine. Passion is something that comes from the proprietor of the vision, the person that sees, the man or woman who sees the story; in a sense, the shaman, the flame keeper who wants to make that film, who wants to bring that film to fruition. It's that passion that ignites the whole process. It isn't a multiple vision; it's a single vision being multiply owned, so that there is a proprietorship from a lot of people, a collaboration on a single vision. That passion has to stem from that vision. ...

And I think it may look a little different in the year 2000 than it did in the late 1960s, but it still was that same way. Somebody had to convince somebody else of their dream and to be able to finance it. Because, after all, it isn't called "show show," it's called "show business." The person financing it has to believe that they're going to get a return on their investment. How will they get their return? Other people have to see it and embrace it. So the same dynamics are alive today, even though the cost structure, the risk/reward structure is much different. So passion is still the catalyst for it all.

A lot of people talk about "Jaws" as a kind of watershed. Can you talk about what that meant to the business?

I think "Jaws" was significant as a watershed film, and it's almost ironical. The four words that start the book -- "And so it began" -- are the same four words that you could use for the business, the change in the business. "And so it began." These wide releases. These enormous expenditures of prints and advertising in publicity and marketing costs. They would create this enormous swell of momentum that would create gargantuan box office from the beginning. That started the whole media craze about tracking what film opened to what numbers, and a kind contest of which films succeeded from year to year. All of that became part and parcel of the dream merchants' tools in making films successful.

You've done pretty well during that whole period, so obviously you saw something and adapted in a way that other people didn't. What did you see? What kind of changes did you feel you had to make?

The changes that you make trying to survive and prosper from the late 1960s into the year 2000 are more of attitude than aptitude. I think many people keep their aptitude -- their abilities, their capabilities, talents and insights. But the attitude, the willingness to embrace new voices, the willingness to allow yourself to be curious rather than become critical. ... As you get older, you can become critical instead of curious, and that kills the passion. It kills the energy that fuels the momentum that creates the process that gets the projects made.

... You cannot be risk-averse. Younger people tend to be more willing to take risks, more prone to lean forward. As you get older and you become the incumbent in the process, in the institution, you begin to defend your incumbency, and then new challenges come along and take away your ground. So the idea of what I think has allowed me to maintain both the propensity and the disposition and, hopefully, the success through those four to five decades has been those kinds of tools -- not the other kinds of rules.

How important have these other [ancillary] markets become to the success of a film?

I would say that the other markets that have emerged since the 1960s, in terms of importance to the films and the film business, are somewhat akin to water to a camel. They can stay alive, these companies, for quite some time. But they have done it by building up these great reservoirs inside them -- these enormous catalogs of films which they can turn and create revenue streams from, that can build other kinds of assets like distribution channels for cable or having the clout of having an enormous amount of videos to rack for video jobbers.

All of these elements give the critical mass to these companies, which allows them to sustain themselves from picture to picture, from year to year. A little company like mine, at Mandalay, which is only seven years old now, which is a world record -- most of these companies go out of business, you know, within earshot of the first bang -- what has really allowed it is the fact that the industry has now fractured itself. It allows other forms of financing to become part of the packaging of films. In the past, the engines of finance were totally the studios. Today, the costs of films and the risks of films have allowed a new element in the packaging to emerge.

How important is marketing to the release of one of your films?

The importance of marketing, in terms of success of a film, is like air to all of us. It is a crucial resource that you must be breathing from the beginning. The minute you start the process of deciding to make a film and you're communicating that vision to anyone, you're in the process of selling. If you don't understand that, you're not in show business. You're just not.

The idea is you create a perception in the marketplace to a whole set of constituencies. It can be talent constituencies, managers and attorneys, it can be the media, it can be the exhibitors, it can be the distributors -- a whole set of people who help catalyze the process of getting the film made, both by their design and by serendipity.

And the reality is that, when you begin to communicate the ideas, people make opinions and judgements and points of view about them. Is it a good one, is it a bad idea? Is it a good writer, is it a bad writer? Is the film looking good or is it looking bad? Is it successful, is it unsuccessful? These are fragile enterprises. ... The rules are ethereal; they're very hard to put your hands on them. As a matter of fact, I often say in this business [that] there are no rules, but you break them at your peril.

The reality is that every movie is a new business. Nobody says, "Hey, let's go down to the Pantages Theater, I hear a Warner Brothers picture is playing there." Or "Let's go to this theater, I hear the film came in on budget." It'd be ridiculous. Each movie is an opinion, a point of view, a collection of opinions and points of view, plus the film itself. That's what helps create the word of mouth. That's what helps create the perception of success that drives people to the theater. The film has to be good. But many films that are good don't succeed to their full merit, because they'd not been marketed well. And I think that's an important ingredient. Marketing and filmmaking are, in a sense, inextricably tied together at the hip.

So it seems like sometimes you're almost competing against the other marketing campaigns more than the films.

On any given weekend in the summer, there's such a confluence of films bombarding the North American media for attention, the cacophony is deafening. To try to get separation, to try to get awareness, to try to penetrate the noise, to try to create a sense of design for the film, to try to draw in the core audience, takes enormous numbers of dollars, enormous energy. A big film in a big studio that's maybe cost $100 million, the marketing resources -- and I'm not talking about just financial capital, but intellectual capital -- that are designed and deployed in making that film successful can suck the air out of the rest of the company.

So every weekend, you'll find yourself competing against one or two or three big films. And when these companies all put out $70 million, $80 million, $90 million, $100 million films, they have to support them. They have to open them. They're in a bit of a footrace for that week for the available audiences out there. "Well," you'll say, "Why don't you go out in February, why don't you go out in the fall?" You do, but the available audience is much smaller, so you'll do better, but the total audience is less.

So the idea is [that summer] is a very valuable playing time. You have to market your films, your big films into it, and hope like hell that they catch fire and that it's a conflagration that can play throughout the summer. Otherwise, it's like a match. It burns down and burns the tips of your fingers and all you got is a little bit of pain -- or a lot of pain, if there's a lot of money.

So what do you think attracted those [multinational] companies to the film business?

What is the attraction of a French water company, [Vivendi], to buying a movie studio in Hollywood? What is the attraction of multinational consumer electronics companies -- two of them, Panasonic and Sony -- to buying companies in Hollywood? What is the attraction of a Canadian spirits company, Seagrams, to buying a company in Hollywood? ...

I think it's like the moth drawn to the flame. There's something that you can't get quite anywhere else. It's the reason for programs like this. It's the attraction of the storyteller. There's something in the magic of the lights that is inextricably true for all human beings. There's something about the magic of the shaman, the storyteller in front of the flickering images of the campfire that forever in our species have wowed us, from the very, very beginning.

And whether it's new technology driving it, whether it's capital driving it, whether it's new markets driving it, it still remained integral. We're wired. humans are a funny bunch; we're a narrative bunch. We're wired to talk to each other in the form of story. So when we see these flickering images on a screen 40 feet high and 50 feet wide and we're in some way swept off of our daily humdrum, we have a patent interrupt from all the terrible things that are going on, there's something that is so powerful in that medium that I think companies and individuals see that as an enduring legacy of human race.

So to own a piece of that territory, to own a piece of that real estate, to somehow say "That's mine," and then you see it on every screen in [the] world ... is a very compelling element. Now, when it's also economically sound -- and it can be -- [it's] a very powerful magnet for these companies.

One can always sell them on the basis that, over the years, the transactional value has exceeded the enterprise returns. That's true. Nonetheless, it's still been a powerful tool in building a multimedia international resource where the inventory works to your advantage when you're asleep. I'm asleep right now. "Sleepy Hollow" is making money in some airliner, at some hotel, in some television station in Paraguay and in Venezuela and someplace in Eastern Europe.

And films that I made 25 years ago, in the 1970s, "Midnight Express," [I'm] still getting checks from exposure from the 25-year re-release to a video to a new DVD. So these are very valuable intellectual properties. Not easy to create, but still something that has a compelling nature, for both the entrepreneurial spirit and the creative spirit of companies and people. ...

Is there a culture clash between those companies and the way Hollywood works? When they come in, are they changing the business in any way?

I think the first rush of international buyers for companies started way back in the mid-1960s, when Banque de Paris tried to buy Columbia Pictures. Abe Schneider and Leo Jaffe and a group of people who were at the company held them off. There may have been some incidents before that, but I'm not really privy to it. But I think that was one of the first ones. ...

Every company began... International companies began looking at it and saying, "Can I do one of two things? Can I own a piece of Hollywood?" And I use the word "Hollywood," not in its geographic sense, but its international sense, the type of filmmaking, the type of international currency of product that it produces. "Can we own that?" Then a group of companies came and said, "Can we own it and can we do like the Japanese thought they could do? Replicate it. We can now take it back home, redesign it, and make from there for here." That was a thought. And that didn't work, either.

And so everyone had a different play at it. "Now that we have a digital world and talent's living all over the world, can we run the company out of France?" That didn't work, either. You could eat well there, but you couldn't run the company out of there. These are funny little businesses. I say "little," because each of the movies are businesses, and now they're big movies, but funny little things.

The international companies that are media companies realize that it is an intrinsically international product that's intrinsically made in the English language, and it's intrinsically geographically oriented in North America. So ultimately, even the companies, the international companies that own it now, pretty much other than the financing questions of the whole company, leave the operational issues and the creative issues to the parties at hand in North America.

Have you seen any change in this span that you've been working in, in the kinds of movies that get made?

In the early 1970s, even late 1960s, what you had was not a global market. The lack of privatization of television meant that a lot of the product didn't go into international television sale at the theatrical release. It was closely controlled by the cultural ministries of France and other countries that they didn't want them to be Americanized, especially in their television product. Couldn't quite do so as well in their international theatrical product. But still, all the cinemas were old, the screens were old, projection was relatively unstable, uncertain and the product represented maybe 20 percent of the world global value of a film at that time.

Then there were the American film icons that did real business, that you could do some business with. That was the Clint Eastwoods and the Charlie Bronsons. ... The American companies didn't decide to make those films because they were internationally focused, not domestically focused. They were more interested in whether the film was boffo in Baltimore than whether it was successful in Zagreb. In fact, they didn't have films then, it was a communist country. But at any rate, you didn't have international films.

What happened was that, as the international market began to open up, people began to see the revenue potential there. Just look at today. People talk about the world. There's 300 million people in the United States and there's 5,700,000 people in the rest of the world. Doesn't take an Einstein to figure out if you could tap into that market, there's a lot of money to be made and a lot of eyes to be attended to.

So over this period, that continuum, that's what began to happen. The privatization of television, the expansion of the cinemas; the international marketplace began to have multiplex cinemas. Theaters didn't have concessions; they now have concessions in the world. A whole sea change happened, including the ancillaries that came from theatrical. Now cable and video were enormous in the world markets.

That meant that the shape of the films would change, because for a long time it still was the action adventure, mainstream down the middle, male-oriented film. And then suddenly, I remember, in 1993 or 1994 when I was at Sony, one of our studios was doing two films, "Sleepless in Seattle" and "Philadelphia." And the team at the company modeled those films and said, "We're going to do about 40 percent [internationally] of what they do in the U.S. domestic market -- 40 percent. Oh, OK, not bad. That's what they can do. Maybe 50 percent, 40 percent."

And you've made your decision based on that. Of course, they did 125 percent more than they did in domestic market. Films that normally weren't looked at as international travelers, ones that didn't cross all the territorial lines, so it's all blurring as CNN brings the news of a successful film to the world the same day it is happening here. So you got international releases that are closer. You've got publicity and promotion that is now global in nature. So the whole nature and design of what you make is also changing.

A lot of people we've been talking to say that, over the last few years, that films seem to be getting simpler and simpler. Do you think there's a danger in overmarketing and playing things so safe that you can wear out the audience?

This is a very difficult question, because it's a dangerous question. If you're asking an opinion of a person that's been on the filmmaking side of the business for 32 years, are the films that are like that, that are getting simpler, and kind of uncomplicated and younger -- is that a good thing or a bad thing?

... I'm not sure. I'm seeing it from an older person's side. But some of the stupidest films [that] ever could be conceived have enormous grosses. I mean, they're unbearable. Now, that's to me and my sensibility. You know, maybe I'm too old, maybe I'm too educated, maybe I'm too thoughtful -- I don't know what I am -- but they are plain-out terrible. It's the only word I can use. Now, one man's meat is another man's poison, and vice versa. So the question, is that a film I would want to make myself? No. I wouldn't want to spend my money, our money, my passion, my scarcest resource -- my time, my energy -- and make those kinds of films.

Not that I haven't on occasion made films that are terrible; I have. Or that I haven't made films that didn't succeed; I have. Or haven't made films that have been badly reviewed; I have. Or haven't made films that had some dumbness to them; I have. But that's not what I'm aiming for.

And I think your question is, is that what's happening now? Is the success of those films causing companies to aim at that? And the answer is yes. And the reason why is that greed and avarice were invented in Hollywood. So the bigger targets, closer up, are those kind of films. And they can migrate to television easier, video. ...

And let me say this: That's not putting anybody down, because I don't think that's not a fair statement. We're all cut from the same cloth. But the reality is that some far-off travelers in the cosmos seeing these errant signals that have escaped Earth 1000 years from now are going to think, "Who made this 'Little Nicky?' What is this thing? Can this be a species we want to visit?"

So my question always is not the end product of the film, because I think that's a hard way to really completely answer the question. It's, "What was the design going in? Were you aiming, as your question suggests, were you aiming at that lowest common denominator? That cheapest possible audience? That basest possible value? Is that the target of choice?"

That's a very honest question and it deserves an honest answer. And I think the answer is yes. If they believe they can make more money at that, that's where they'll aim, in the main, because they are, after all, public companies. The shareholders don't want to know what the product was; they want to know what the profits are.

What could Hollywood do to screw itself up?

Sometimes you look at something and ask yourself, is this the greatest thing in the world and could it be ruined, or is this the most awful thing in the world that has some great things in it? I'm not sure on which side I'd come down. But my own view is that, so long as the human being remains a human being and doesn't become mechanical, have all mechanical parts and a mechanical brain, that ultimately they're going to be driven by the imperatives of storytelling.

People love to be swept off their feet, to go into an environment where they've never been, to experience things they only dream about. And filmmaking offers that potential. Whether we call it cinema in the [digitized] future or if it's played on your eyeballs injected with electrodes into your head, whatever the means are, we're going to start with somebody wanting to tell a story to somebody else -- a lot of somebody elses. I don't think there's anything in the technology or the financing that can screw that up.

The question becomes, can they maximize its value? Can they make stories and compelling dramas that are entertaining, charming, inventive, romantic, funny, that somehow move forward the human spirit and support the best of who and what we are as individuals? Can we do that and still have it be a good business? That's the real challenge in the question.

You're someone who seems to have struck a balance between big commercial films and films like "Sleepy Hollow." How do you approach putting together something like "Sleepy Hollow?"

Well, "Sleepy Hollow" was already rolling down the road when we got involved. We chose to do it because we felt it was a worthwhile business venture. Tim Burton had done "Batman" with us, and Johnny Depp had done "Donnie Brasco" with us, so we had some relationship and we were in business with Paramount.

But to look at a film that may or may not get made, may or not get made by the time this show is on, take a film like "Beyond Borders." The screenplay [was] written largely at the direction of Oliver Stone, who wrote "Midnight Express," by the way, and he won the Academy Award. Very difficult adult film about darkness without borders. A combination of "Year of Living Dangerously" meets "Out Of Africa." You know, clearly not "Little Nicky." He's not in that league. ...

It's a real challenge to make that film, because your audience isn't 15 years old. You're not going to look at multiple moviegoers in terms of the number of times they're going to see it. It's a long film. It's going to run two hours and 15 minutes, and it may not get made. In fact, there's a high likelihood that it won't get made. It had Oliver Stone directing, it had Kevin Costner in it, it had Michael Douglas in it, it had Ralph Fiennes in it, it had Julia Roberts in it, it had Gwyneth Paltrow in it. I mean, every kind of person had, like, surrounded it.

But ultimately, it may not get made. We believe in it, from the first moment of the treatment all the way through now to the screenplay and trying to find the right filmmaker to make it. In Chechnya, Cambodia and Ethiopia -- that's a tough film to make. So that doesn't mean it's worthy of the money or worthy of being made, but it's worthy of the passion. And we have a passion for it. Will it get there? I don't know.

But I can say this: The target on that film is small and distant. If I want to make a big and close one, "Sleepy Hollow" is a much bigger and closer one. So you look at what balance you want to do. You're driven by the passion inside you, by something that you believe speaks to something in your creative self, in your humanness, that you feel is worthy of the scarcest resource that you possibly have -- your time.

Any trends in the future that you see?

I think the most interesting is new technology, because this business has always been transformed by new technologies. The shaman in front of the campfire danced his dance and sang a song and stood in front of the flickering images, until somebody one day picked up a cape and horns that were drying and put it on his head and danced around behind him acting out the hunt, and suddenly the prop was born. New technology. And everything changed. ...

You know, everybody was slow to embrace it. And then they figured out how to incorporate it. Today, change is change. The rate of change is accelerating. ... It's a compelling adventure now just to stay alive, just to keep afoot of all the things that are going on.

But one thing that I think has the greatest advantage to both change the financial underpinnings of the business and create a wider circle or a wider orbit of audience, and differentiated audience, and a wider orbit of talent that can feed that audience, is World Wide Web broadband.

[There's] the idea that it'll collapse the distance between the "Eureka" of the artists and the "Wow" of the audience -- collapse it all and get them much closer together with a lot of intermediaries who made money in the process, people carrying film cans around, all kinds of other distribution mechanisms, marketing mechanisms, being commoditized, intermediated out of the business -- and allow those two forces to come together with a greater frequency and greater selectivity... [That], to my mind, has enormous potential.

Anything that's frustrated you?

The most frustrating thing is that I'm getting older. And it's frustrating, not because it's not enjoyable, but because there are so many new voices, so many unconventional voices coming at us from that direction, that sifting and sorting and deciding which ones to embrace and examine and be curious about is indeed a challenge in and of itself. But that's also what keeps you young, if you're willing to take a breath and think, "Oh, I'll accept that. I'll look at that. That's a new idea that I didn't think of," rather than be the proprietor or the steward of all ideas.

Anything I didn't ask that you want to comment on?

I would like to take this opportunity to thank my mother for giving birth to me. I failed to do that at the Academy Awards, the Golden Globes, and every other award. I want to do it here.

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