WIP and Picturehouse Shut Down

It’s almost shocking after the success of PAN’S LABYRINTH, but it was announced today that they will close shop on both Warner Independent Pictures and Picturehouse, which puts numerous titles’ release in question – such as the long delayed Amusement, which is almost definitely going direct-to-DVD. Read on for the sad announcement.
Warner Bros. has discovered a way to deal with the specialty film business — it’s staying away from it.

In a move that reflects the massive pressures to cut costs., Warner Bros. has decided to shutter both Picturehouse and Warner Independent Pictures. The closings – which caught Hollywood off guard — will eliminate more than 70 slots.

Announcement came late Thursday morning from Alan Horn, Warner’s president and chief operating officer, who pointed to the recent move to fold in New Line to Warner Bros. More than 500 New Line jobs have been cut as a result.

“With New Line now a key part of Warner Bros., we’re able to handle films across the entire spectrum of genres and budgets without overlapping production, marketing and distribution infrastructures,” he said. “After much painstaking analysis, this was a difficult decision to make, but it reflects the reality of a changing marketplace and our need to prudently run our businesses with increased efficiencies.”

Horn told Daily Variety that the decision – made in conjunction with Warner topper Barry Meyer – was “wrenching” from the standpoint of its impact on pink-slipped employees. But he emphasized that it made no sense for Warner Bros. to continue funding marketing and distribution infrastructures at Picturehouse and WIP – particularly since Warner has expanded its capacity to handle films by absorbing New Line’s marketing-distribution operations.

“We concluded that carrying the Picturehouse and WIP infrastructures wasn’t the most economic usse of our resources,” he added. “We have to capacity to disribute and market anything.”

Horn cited the fact that 600 pics get released annually as having made the specialty biz less attractive financially in recent year. He also said that such pics have becomce more likely to screen at multiplexes rather than art-hosue venues and expresssed confidence in Warner’s distribution side to ensure that smaller films receive the proper handling.

Horn admitted that the announcement’s likely to be interpreted as Warner Bros. getting out of the indie film biz but stressed that it will still acquire and produce specialty pics. He cited the success of such fare as “March of the Penguins,” “Before Sunset,” “We Don’t Live Here Anymore,” “La Vie en Rose” and “Snow Angels” as examples of the kinds of projects that Warner will still look to buy and produce.

“I’m a card-carrying adult and I love these movies,” Horn admitted. “But it’s never been a high-margin business.”

Horn also said it’s more likely that the studio will go the acquisitions route. But he also but noted that Warners’ will still look to set up specialty-style products, citing Warner’s long relationships with such filmmakers as George Clooney, Steven Soderbergh and Clint Eastwood.

“We’re confident that the spirit of independent filmmaking and the opportunity to find and give a voice to new talent will continue to have a presence at Warner Bros.”

Picturehouse, run by president Bob Berney, has 43 employees. WIP, under Polly Cohen, employs 31 staffers. Horn said Cohen will continue to work for Warner Bros. as she’s still under contract and stressed that he’s hopeful that the studio can reach some kind of deal with Berney.

Berney also said Picturehouse will release “Mongol,” “Kit Kittredge” and “The Women” before ceasing operations in September. He and staffers will go to Cannes.

Warner Bros. was the last major to form a specialty label. Under former WIP prexy Mark Gill, it generated some hits, including 2005′s “March of the Penguins.”

Cohen, a former production exec at the studio, succeeded Gill and her acquisitions have included “Introducing the Dwights” and “Snow Angels.” It also produced Tommy Lee Jones vehicle “In the Valley of Elah.”

Berney’s tenure include New Line buying out former partner HBO and investing in two foreign-language films — “La Vie en rose” and “Pan’s Labyrinth” — which nabbed five Oscar awards between them.

Berney told Daily Variety that he first heard about the shuttering late Wednesday and noted that Horn and Meyer stressed that the decision was a matter of philosophy.

“Their decision was not to be in this business,” he added. “It’s not a reflection on me or Picturehouse. It’s not their world.”

Berney has no specific plans for a new job, adding, “A lot of people want to do something — companies, investors. I am confident at the end of the day I will find something but it needs to be a place that fits.