Paramount’s Jim Gianopulos on Why Profitability Is Only the First Step to Rebuild the Studio

Jim Gianopulos has not had a particularly easy job since taking over as CEO of Paramount Pictures in 2017 — one year after the once-iconic studio had lost more than $450 million. “Looking back that was about as dark as it gets, particularly for a major studio,” Gianopulos said Wednesday at Bank of America Merrill Lynch’s annual media and entertainment conference. “We’ve just, basically for the first year in now four, been able to make a profit. Being profitable is a good thing; being profitable at the level we should be is the next step.” How does Gianopulos reach that next step? Well, a dive into the studio’s recent box office successes and its coming slate of films provides a glimpse at that answer. The Paramount rebounding narrative really took hold last year with box office hits such as “Mission: Impossible — Fallout” ($791.1 million) and “A Quiet Place” ($340.9 million). And Paramount released 10 films, with box office contribution from two 2017 holdovers. That’s been a shift in the studio’s strategy and an important one to help it succeed, according to Gianopulos. If you have to spend money to make money, then you have to release movies to make it too. “You take a little victory lap for not losing that kind of crazy money… now it’s about expanding our theatrical slate,” Gianopulos said. “When I started, Paramount was releasing eight movies, then we went to 12, next year we’ll be at 16, and looking forward probably more in the 18 to 20 range.” There are other factors, of course: The movies also need to be good, or rather, they need to connect with audiences. Roughly nine months into 2019, Paramount has released six films, with last year’s releases “Bumblebee” and “Instant Family” adding some cushion. But domestic box office stands at just $402.6 million so far this year — well behind all the other majors as well as Lionsgate. (The studio also finished last of the majors in market share last year, with $757.0 million.) Films like “Rocketman” ($193.4 million) and “Pet Sematary” ($112.4 million), while they haven’t reached the level of success as last year’s big hits, have been relatively successful considering their production budgets. And the studio has high expectations for upcoming releases like Will Smith’s sci-fi film”Gemini Man,” the franchise sequel “Terminator: Dark Fate” and the John Cena family comedy “Playing With Fire.” Next year will bring 15 films, including a “Coming to America” sequel that Gianopulos is high on. “There was a need to accelerate development when I started… There wasn’t a lot in the pipeline that we felt was appropriate,” Gianopulos said. “So there was a bit of a ramp up, that we’re pass that now. There’s a lot in development, then there’s a lot on the runway, there’s a lot about to launch and then, of course, there are films that just finished production.” Now that production has hit a level of turn out that Gianopulos called Paramount’s “sweet spot,” the studio has to make sure to capitalize on the content. Theatrically, Gianopulos acknowledged that sometimes movies just don’t perform at the level the studio wants, or expects them to. The crowded landscape makes it harder to market films and pick a suitable release day. One area where Gianopulos sees room for growth, however, is licensing content to third-party distributors, and even developing content for those outlets exclusively: The company is currently producing three shows for HBO Max, including the Christin Milioti comedy “Made for Love.” A lot of the opportunity comes from an outsize focus on new direct-to-consumer streaming services, he said. Newly bulked-up competitors like Disney-Fox and AT&T-Time Warner “are primarily focused on their (direct-to-consumer) offerings and putting their content behind the wall,” Gianopulos said. “Those are important strategic initiatives and maybe quite successful, but the effect of them is to forgo licensing to third parties — and we are in that business. “Because of the number of units we have producing content and because of the number of our competitors pulling back their content, our content is more desirable, more unique and certainly more available, and that puts us in a very good position.” The studio still has its distribution deal with Netflix, where has placed projects like “Cloverfield Paradox” that it’s opted not to release theatrically. It’s also developing content specifically for Netflix, like the “To All the Boys I’ve Loved Before” sequel. Of course, with the merger between Paramount parent Viacom and CBS in the wings, the studio will soon have its own streaming services to place content. Gianopulos said, however, that Paramount will still look to other places as well to determine the platform that works best for each project — and the bottom line. Gianopulos also said he doesn’t expect the merger to throw too much of a wrench in the studio, or overall company’s operations, like Disney’s acquisition of Fox’s film and TV studios appear to have done. Unlike Fox and Disney, which both had movie studio operations, Gianopulos said, there’s less overlap between Paramount and CBS. “We are more unique than some of the other business units [at CBS], which are primarily networks, so there’s less of a direct impact on us and more upside and opportunity,” he said, giving a shout-out to Viacom (and future ViacomCBS) CEO Bob Bakish. “Bob Bakish has done such a great job, even before the merger, of creating a culture of synergy and collaboration. I know everybody says those words, but we actually live them.”