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Patrick Goldstein and James Rainey
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Jeffrey Katzenberg's notorious memo: How does it hold up 20 years later?

Jeff_katzenbbergIn late January 1991, fax machines were humming all across Hollywood, spreading the news that Jeffrey Katzenberg, then head of production at Disney, had written a scalding, often self-critical 28-page memo blasting the movie industry's “tidal wave of runaway costs and mindless competition.” Hollywood's “blockbuster” mentality, he lamented, had turned films into assembly-line products with a shelf life “somewhat shorter than a supermarket tomato.”

Sound familiar?

Back then, studio chiefs were still relatively discreet about the inner workings of their business, so Katzenberg's memo (read it here) was particularly shocking because he named names — not only calling out other studios' flops but also complaining about the excessive time and energy Disney had put into “Dick Tracy,” the Warren Beatty film whose swollen budget ate up nearly all its profits. Though Beatty was still one of the biggest stars in town, Katzenberg said that the next time Beatty came to the studio with a project, we “should slap ourselves a few times, throw cold water on our faces and soberly conclude that it's not a project we should choose to get involved in.”

The memo, intended only for internal consumption, ended up being printed in full in Variety. The rest of the media quickly leaped in, with the New York Times noting that the memo inspired months of “anger, resentment, debate and jokes within Hollywood.” Bill Murray, appearing on “Larry King Live” to promote Disney's “What About Bob?,” complained about the memo's dismissive attitude toward stars. Mike Medavoy, then chairman of Tri-Star Pictures, called the memo “self-serving palaver.” Beatty, who'd been a close friend of Katzenberg's, stopped speaking to him. Disney Chairman Michael Eisner privately fumed about the leak.

Twenty years later, the memo makes for fascinating reading. It's clearly one of Katzenberg's first efforts to transform himself from a dogged production executive best known for a punishing work ethic into an industry strategist and spokesman, a role he has assumed in recent years as the leading proponent for 3-D movies. But what's even more compelling is how prophetic the memo looks today, especially in the way that it offers an early glimpse into the kind of risk-averse managerial thinking that has come to dominate today's movie industry.

When I called Katzenberg to ask if he'd discuss the memo, he politely declined, saying that as someone who never watches any of his old films, he viewed it as an unrewarding exercise. “Wild horses couldn't get me to do it,” he said with a laugh. “I couldn't get past the first paragraph without breaking into a cold sweat.”

At the time, the part of the memo that received the most attention was its scathing assessment of “Dick Tracy,” which cost nearly $50 million to make, more to market and sucked up hundreds of hours of Katzenberg's time in dealing with the famously indecisive Beatty, who had dinner with Katzenberg virtually every night during the film's extended production. The film barely covered its costs while “Pretty Woman,” which starred the then-unheralded (and inexpensive) Julia Roberts, was a breakout hit. It cost a modest $14 million, yet it grossed an astounding $463 million worldwide, then a record for Disney.

Katzenberg and Eisner's original model for Disney had been to make movies with low-cost stars, so it's little wonder, after “Dick Tracy,” that Katzenberg advocated reviving that strategy, warning that the studio's initial success was based on “the ability to tell good stories well,” not on “big stars and name directors.” Katzenberg stressed that the studio should be in control of its own destiny, focusing more on “stories that make us care” than on stars or production values.

Movie stars were bad for business. As Katzenberg put it: “Unreasonable salaries coupled with giant participations comprise a win/win situation for the talent and a lose/lose situation for us. It results in us getting punished for failure and having no upside in success.” His blunt assessment of the “celebrity surcharge” of dealing with movie stars has been adopted today by many studios, most notably at the fanatically disciplined 20th Century Fox.

The memo anticipates some of the biggest changes in studio thinking about making family-oriented movies, especially when you realize that the most successful family movies are animated. But Katzenberg's memo, for all its prophetic thinking, is laced with a bitter irony: He repeatedly stresses the importance of hiring a stable of in-house writers who felt they had a stake in the studio's success and could transform Disney into a quality-driven idea factory. But if you were to point to a company that exemplifies that vision of a studio, it would be Pixar.

Pixar has always been three steps ahead of the company Katzenberg went on to found, DreamWorks Animation, both in terms of commercial consistency and awards-season plaudits. And Pixar was such a creative behemoth that Disney ended up buying it for more than $7 billion.

Pixar operates much as Katzenberg envisioned his ideal studio, propelled by a collaborative cadre of brilliant creative minds, including Pete Docter (“Up”), Andrew Stanton (“Wall-E”) and Lee Unkrich (“Toy Story 3”), who've served in every capacity at the studio, from story artists, animators and voice actors to writers and directors.

DreamWorks Animation had lots of success, especially with its “Shrek” franchise, but its films are still marketed on the voices of celebrities like Eddie Murphy who, while they don't get the salaries they earn in live-action films, still often receive back-end payments. Pixar's films are sold via strong concepts. They cast to character — you rarely see a marquee actor doing a voice in a movie like “Ratatouille” and “Wall-E.”

That's not to take anything away from Katzenberg, whose thinking has ended up being a big influence on much of present-day Hollywood. But maybe he should consider re-reading the memo after all. Some of DreamWorks' recent films, notably “Monsters vs. Aliens” and “Megamind,” have felt all too much like “Dick Tracy” when it comes to a focused story and character. What Katzenberg said in 1991 is still true now — for all the appeal of new technology and special effects, the original idea is king.

 --Patrick Goldstein

 Photo: Then-Disney production chief Jeffrey Katzenberg in a file photo from 1994.

Credit: Associated Press

 
Comments () | Archives (10)

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this is really unfair. Jeffrey is an amazing man, an amazing executive, and one of the last truly good people left in this town - nobody has the loyalty nor the respect for his employees that this man does. to reduce his life's work to "well...it is not Pixar" is simply disgusting. he is DreamWorks Animation, an exemplary organization that needs not to be compared to any other companies. And, you what, Lassiter is fat.

Movies are just not as good as they used to be. Insipid, mindless, even brain-numbing lowbrow attempts at humor are mislabeled as "comedy". A fireworks show punctuated by occasional dialogue is mislabeled as "action."

It's much more enjoyable to watch a classic from the 70's like "Omega Man" or "Moon Zero Two" for some tense drama and a little action. The original Indiana Jones movies were great for hitting the "sweet spot" for over-the-top humor.

The downtrend in movie quality parallels the downtrend in tv quality. Compare the original Mission:Impossible series, with the updated version from a while back. No comparison; the original was far superior.

When asked on his deathbed for his opinion of the first Tom Cruise MI movie, original series star Greg Morris called it "an abomination." And then he succumbed.

WARREN BEATTY'S SUCH A JOKE. A COMPLETE LOSER. ACTED AND DIRECTED SOME REALLY LOUSY FILMS. KATZENBERG ON THE OTHER HAND REMAINS A VISIONARY, AN INTIMIDATED ONE THESE DAYS BUT NONETHELESS...

If you read this (studio executive), the genre of film that stands the test of time is the biographical film of the artist or the writer. These aren't the biggest money-makers, but neither do they cost much. Films about the life-trials and crises of our world's "thinkers" and "creators" are very entertaining with typically a didactic undercurrent; you'll be able wax proud about your portfolio at the end of your, perhaps truncated, career.

OMG - thanks FutureUser. I had forgotten all about Omega Man, which my parents dropped all five of us to see in a theater so they could do Christmas shopping. My sister has nightmares about that movie to this day so yes, I have to agree with you about modern cinema. Of course, my parents didn't know what it was about and she was only 5...ah, the good ole days!~

This article is dead on! And the hypocrisies pointed out about Katzenberg should be discussed and stressed. It’s unfortunate that he did have the right vision for the movie industry 20 years age, but he himself couldn’t walk down that path. I love movies and for some masochistic reason, I follow the industry and the behind the scene action of the business. I never knew about this memo, and even though I am pleasantly surprised that a top industry exec had the vision to “call out” the lame business model which the movie industry operated under 20 years ago (and more so today), obviously greed took over. There‘s a ton of money in movies, but it’s a business of corporate projections, minimal risk, celebrity obsession and number crunchers. Film is an art and should be treated as an art – respected with creative ideas. Don’t blame Pixar for doing it right.

Am currently reading Disney War, and I was not a little shocked by just how relevant Katzenberg's rant was 20 years ago. It was just a year after Batman, which arguably changed the movie business forever and led the way to the current craze of over-budgeted preordained smash-hits based on known properties and the obsession with opening weekend. I wrote about it two years ago, for Batman's 20th anniversary. Had no idea Katzenberg beat me to the bunch by two decades.

For those who care: http://scottalanmendelson.blogspot.com/2009/06/june-23rd-1989-twenty-years-later-how.html

I guess Katzenberg would have been happy to continue making cheap films starring Bette Midler and assorted sitcom stars?

I guess I have to admit as a guilty pleasure that I would love to see some comedies like Down and Out in Beverly Hills, Ruthless People, and What About Bob being made today, and maybe even the old, lighthearted Splash-like Tom Hanks too.

Aren't we all forgetting something here?
The memo is refreshing, but not correct in many respect. Let examine one part only; The Public.

They want to see crappy movies and studios make it for them. It's about business, soon as you do artsy films they stay away. So, give them zombie pictures because that seems to be rage now, or horror or whatever they want to see. Want another example: re-makes.... Why? we ran out of stories?
Nope, it has a BUILT in audience. How many times you can re-make the same old movie, before it becomes boring, no one knows.

Once in a while someone actually do a film with a good story because it's the perfect 'time' for public mood to accept it. It's all about timing and subject matter. There are millions of GOOD scripts floating around. The studios taking a pulse and see what the market wants. Many hits in the past is really not that good let alone great, but that was the right time for those movies.

Judging by Katz. recent works he's not doing all that great with some of his projects. Maybe he should take a note from the studios?
It's about MARKETS and what people want to see.... yes, including the stars.

I've worked on several films with Jeffrey, both at Disney and Dreamworks. His number one priority has always been STORY. All stories are developed within Dreamworks, not outside the studio as Mr. Goldstein states. Casting of the voice talent comes much later in the process. Although many Dreamworks movies have had superstar talent as voices, many do not. KUNG FU PANDA and HOW TO TRAIN YOUR DRAGON, two of the studio's best films did not have household names. Pixar cast Tom Hanks and Tim Allen to voice characters in the Toy Story series, not exactly unknowns. They were cast because they were right for the parts. Jeffrey does the same thing. If having a big name might help a little at the box office, what is the harm? I think Jeffrey has done his best to adhere to the principals outlined in his memo of 20 years ago.


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