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Paramount to launch micro-budget movie division

December 10, 2009 |  5:27 pm

Fresh off its stunning "Paranormal Activity" success -- a $15,000 thriller that has grossed more than $107 million in its domestic release with little paid advertising -- Paramount Pictures is set to launch a new production business for movies budgeted at less than $100,000.

The as-yet-unnamed division plans to finance as many as 20 "micro-budget" movies annually starting in 2010, according to people familiar with the studio's plans who spoke on condition of anonymity because the formal announcement has not been made. A current Paramount executive will run the business, but the selection has not yet been revealed  publicly. Funds for the movies -- no more than $2 million total annually -- will be part of Paramount's existing production budget. The division does not plan to acquire completed movies at film festivals and markets.

Not all of the micro-budgeted movies Paramount intends to make will be released theatrically.

Instead, the division will operate much like a studio's development slate, where screenplays are purchased, rewritten and (in some cases) turned into movies. Paramount plans to target both established filmmakers and newcomers with its micro-budget pitch. Paramount production chief Adam Goodman has been touting the initiative in recent meetings with the town's leading talent agencies, according to two people who were at Paramount's presentations.

People familiar with the studio's plans say some of the movies may end up serving as "calling cards" -- a showcase of a novice director's storytelling talent for a future project. A handful of films may contain enough good ideas to merit a bigger-budget remake. And another group may rise to the top of the heap, getting a theatrical release.

Because thousands of theaters are now equipped to show digital movies, the micro-budget productions can be distributed without the added expense of striking film prints, which can cost more than $1,000 apiece. Paramount also believes they can be marketed without costly television commercials, print advertisements and billboards, instead relying on the grass-roots word-of-mouth that helped propel "Paranormal Activity" to its huge profits. Some of the micro-budgeted movies could be released in just a handful of midnight screenings to gauge audience interest before a wider (and costlier) national release.

Paramount is not the first big studio to try to play in a smaller sandbox. Twentieth Century Fox launched (and recently closed) Fox Atomic, a division dedicated to genre films that struggled with such releases as "Turistas" and "Jennifer's Body." Universal Studios also just exited the business, selling its Rogue Pictures ("Doomsday," "The Return") to Ryan Kavanaugh's Relativity Media.

"Paranormal Activity" has spawned other movies inside Paramount. The studio is developing a sequel to the movie from director Oren Peli and producer Jason Blum, and the studio recently bought Peli and Blum's next movie, "Area 51," a drama about three kids who sneak into a secret, government-run alien storage facility, for about $7.5 million.

-- John Horn

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