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HOLLYWOOD'S 'DIRTY SECRET'
Thursday, April 29 2004
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Calling the soaring costs of making movies "the dirty secret of Hollywood," News Corp president and COO Peter Chernin said Wednesday that they could have devastating consequences for the industry. Raising the possibility of a movie with a $200-million budget bringing in only $25 million at the box office, Chernin said that the resulting fallout from "the era of $150-million write-downs" would "rock the industry to its foundation -- and appropriately so." Chernin made his remarks while participating in a panel discussion at a Milken Institute conference in Los Angeles at which fellow panelist, Viacom Chairman Sumner Redstone, indicated that his company was removing the spending lid from Paramount, allowing it to make films costing more than $100 million. Later in the discussion, the two men agreed that, despite the MPAA's claim that movie studios were losing billions of dollars each year to bootleggers, the film industry was not being hurt as badly as the record industry. Part of the reason, Chernin suggested, was that consumers appeared to be rebelling against the high cost of CDs. "It's ironic that you can buy a movie cheaper than you can buy the [CD] soundtrack to that movie," Chernin said.
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