Studio Report Card: For Paramount, It Was Low Risk, Shared Reward

Studio Report Card: For Paramount, It Was Low Risk, Shared Reward

Despite releasing only 13 films in 2010, Paramount was second in market share — but co-productions and straight distribution deals limited profit

Sixth in a series of studio report cards from TheWrap; previously:

DISNEY: For Disney, Big Hits Came With Big Bills
UNIVERSAL:
Studio Grows Some Green Shoots
FOX: For Fox, a Hot Start to 2010 Goes South
LIONSGATE: Stallone, 'Exorcism' Fuel Lionsgate's Low-Cost Hit Streak
SONY: Sony Bets on Originals in Franchise-Heavy Market

Paramount
Grade: B+
The mountain had only one dud in 2010, the Harrison Ford/Diane Keaton comedy "Morning Glory," while managing to pull off a nifty follow-up to "Paranormal Activity." But it released just 13 movies, and produced only a few itself. Taking a risk counts, too

Film-for-film, no studio had a better distribution year than Paramount, which saw seven of the 13 movies it released in 2010 gross more than $100 million domestically.

And the studio is ending the year on a high note, with "The Fighter" and "True Grit" both over-performing at the box office as they garner awards attention.

Despite that 13-film release total — lowest of the majors and the same as Lionsgate — Paramount was second in domestic market share, controlling 16.1 percent of all North American theaterical revenue, trailing only to Warner (18.3 percent according to Box Office Mojo).

"We've had a pretty spectacular year," Paramount Pictures vice chairman Rob Moore told TheWrap. "To be in second place in market share is really an accomplishment."

With a similarly sized slate for 2011, Moore said Paramount and corporate parent Viacom remain comfortable with "doing the most with the fewest."

However, not only does the studio limit the number of shots it takes, but its limited exposure on many movies curtails just how profitable a wildly successful year at the box office can be.

Even though Paramount released seven of the top 20 domestic revenue earners this year, three — "How to Train Your Dragon," "Shrek Forever After" and "Megamind" — came out of distribution service deals with producer DreamWorks Animation, while others, like "Iron Man 2," were co-productions (the latter with Disney-owned Marvel).

While revenue has grown, profits haven't necessarily kept pace. For example, in Viacom's latest quarterly report last month, revenue for the media company increased 5 percent to $3.33 billion, but the film division's operating profit declined 29 percent to $52 million.

“Paramount is a marginally profitable studio," Janney Montgomery Scott stock analyst Tony Wible told TheWrap last month, "but they need to improve their margins so they no longer lag behind their peers.”

Despite its reliance on distribution partnerships, Paramount did find some things inhouse that worked quite well at the box office, too.

Notably, the studio duplicated the low-budget success of the "Paranormal Acitivity" phenomena of 2009, releasing a sequel in October that grossed $169.2 million on a $3 million production spend.

"Jackass 3D," meanwhile, rendered $169.7 million on a $20 million budget, making it the most successful installment of the three-film, eight-year-old franchise.

Meanwhile, Martin Scorsese thriller "Shutter Island" was the filmmaker's most commercially successful film ever, grossing $294.8 million after Paramount brass decided to push the movie back from fourth-quarter 2009 to last February.

"The move that was most criticized at the time was, in hindsight, one of the best moves we made," Moore notes.

The studio's only miss, meanwhile, was Harrison Ford/Diane Keaton rom-com "Morning Glory," an underperformance Moore attributes to the competitiveness of the release calendar.

"It may have been that we were too ambitioius in terms of the release date on that one," he said. "We should have looked at how many movies were jammed into early November and been more flexible.

In terms of 2011, Paramount has every reason to expect to challenge the nearly $1.7 million in domestic box office revenue it grossed this year.

Movies on tap include a Justin Bieber concert film, Marvel-produced tentpoles "Thor" and "Captain America: The First Avenger," a "Footloose" remake and a "Mission Impossible" sequel.