The economy is a ruthless master. Tad Smith is out at Variety parent Reed Business Information, which was put up for sale and then taken off the market due to the unforgiving economy.

The cash crunch is hitting the Los Angeles County Museum of Art, which has quietly been letting go of many of its curators. It is now canceling its weekend film program, reports the LA Times. Head programmer Ian Birnie will be shifted to part-time consultant status. LACMA said the program lost $1 million over the last ten years and had failed to build an audience. Sorry, I thought the room was usually packed when I attended. I loved the programming, but it was arcane and eclectic, as a museum's should be, not designed to "build an audience."

For four decades, the Los Angeles County Museum of Art has fed film aficionados a steady diet of movie masterpieces -- retrospectives that included works from Roman Polanski, Cary Grant, Ernst Lubitsch and, in a current series, James Mason. But after the museum's weekend film program lost $1 million over the last 10 years and failed to build an audience, LACMA said Tuesday that it was pulling the plug on its cinematic centerpiece.

Before there were local film festivals nearly every week, and mass merchants such as Target stocked art-house hits like "A Room With a View" and "Gosford Park" on their DVD shelves, LACMA's film series was one of the few places area movie lovers could find Hollywood classics and foreign-language standouts.

The museum said that it was not abandoning its commitment to films and filmmakers but wanted to rethink its approach to the art form and would look for potential donors to underwrite an unspecified future film program that is curated like any other part of the museum's exhibits.

BTW, the scrappy survivor in the LA exhibition scene is the American Cinematheque, led by executive director Barbara Smith, recent recipient of a French knighthood. She knows how to woo film fans to two very different locations, Hollywood's Egyptian and Santa Monica's Aero. They work hard to market and get the word out to their fanbase. So does UCLA's Film & Television Archive, now relocated at the Billy Wilder Theatre at the Hammer Museum in Westwood.

UPDATE: Statement from LACMA on the jump.

While the studios will continue to spend $250 million on sure bets like the Harry Potter franchise, they are cutting back everywhere else. The town is feeling the pinch, as production starts decline, budgets are slashed and risks are not being taken. Ask Steven Soderbergh, who sounds depressed indeed in this Guardian interview on Che. (That four-hour Spanish-language money-loser for French financier Wild Bunch is the main source of Soderbergh's Moneyball woes.) For the moment he may direct a play for Cate Blanchett's theatre company in Sydney. Luckily, his Matt Damon whistleblower comedy The Informant! could score at September's Toronto Film Fest.

Here's the line-up for the Toronto Fest, which opens September 10 with Jon Amiel's Charles Darwin biopic, Creation.

The Financial Times reports that Variety parent Reed Elsevier is starting to break up parts of Reed Business Information, which it had intended to sell in one piece before the recession. They're selling the TWgroup travel publishing division.

The Toronto International Film Festival is starting to post its line-up. The press release is on the jump.

The NYT's David Carr visits the source of the Evil Google Empire.

Don't believe all the conventional wisdom about advertising in a recession.

The economy is a ruthless, Darwinian Master. Only the strong shall survive, and that applies to the mighty studios as well as everyone else. Sure, the theatrical market is holding up pretty well. But for every Fast & Furious, Star Trek and The Hangover there's a cynically bloated flop like Land of the Lost (for which Universal pulled print ads on its second weekend) or Imagine That. (The Wrap was inspired to do a quickie Stars Who Should Worry chart including Will Ferrell and Eddie Murphy, which probably got the site into more trouble than it was worth.)

In any case, healthy boxoffice doesn't bail Hollywood out of the predicament each studio owner is in. DVDs, once a beautiful way for the studios to reap tidy profits, are inexorably declining, most dramatically among the blockbusters that used to deliver huge returns. For example, Pixar's 2004 The Incredibles earned $260 million at the domestic boxoffice and sold 18 million DVDs. By comparison, in 2008, DreamWorks' Kung Fu Panda earned $215 million domestically, but sold 11 million DVDs. That's a sizable drop. Sales are down across the board, including classic rereleases, and less precipitously, specialty titles.

The studios can recoup those losses in three ways:

Make movies cheaper.

Make talent their partner. Push back the gross to a point where the studio can make some money.

Cut marketing costs. As the studios produce fewer movies going forward, one bonus will be less clutter and noise for marketing departments to cut through.

Studios answer to beleaguered corporate parents fighting their own battles. Paramount owner Viacom--which one report suggests is open to a Paramount merger when there's no evidence that anyone has interest in buying anybody else--has volatile Sumner Redstone at the helm as ad rates plummet. Each of the six media behemoths is rocked to some degree by the horrid ad climate: 30 to 70 % of their incomes come from ads. News Corp and Time Warner are coping with reeling publishing empires. NBC/Universal parent GE is dealing with its troubled financing division. Disney's Robert Iger is worrying about ABC and theme park attendance. And Sony's hardware divisions are getting slammed.

But at this point in history one studio won't buy another studio because it's impossible to put a value on their assets. Studios generate new hits as locomotives for their libraries. That's the studio business. But now it's tough to place value on the library because nobody knows whether the copyrights will live forever, or be worth nothing in a few years because of the Internet. (The music business has gone from a combined value of $30 billion to $8 billion because the music catalogs are worth next to nothing, due to free music downloads.)

Four weaker companies are more likely to seek new alliances in order to survive: indie Lionsgate, having over-leveraged itself, is under attack by financial agitator Carl Icahn; fledgling Overture's pitiless owner John Malone could easily withdraw support if the company doesn't deliver some Summit-sized grosses; and both MGM and The Weinstein Co. are desperately seeking relief from their crushing debt burdens. Trouble is, while a deep-pocketed player could buy enough debt to shut down a company and buy its library, who's to say what it's worth today? Goldman Sachs is desperately trying to recapitalize MGM before its $4 billion comes due next year. Ordinarily they'd find some action, but at this rate they may have to sell the library at a discount to a tech player with a digital future.

Some folks believe the entertainment economy will bounce back. Others think the Internet has killed the golden goose. (Here's Wired's Chris Anderson on the free economy.) Some studios want to pursue a Hulu model, others prefer following iTunes or Netflix. But unless the consumer has an easy way to buy cheap movies, they'll download them for nothing.

In the worst of times, Darwinian forces are winnowing out the weak. Companies like Marco Weber's Senator Entertainment that were making their mark at Sundance in January are no longer able to meet their commitments in June. Mark Urman went from the frying pan at David Bergstein's beleaguered ThinkFilm into the fire at Senator as president, moving from NY to LA--and back again. Weber, a hybrid filmmaker-businessman who bought out German company Senator's U.S. arm three years ago, assembled a production slate of six films with the intention of building a distribution company. To that end, he hired away Urman as Bergstein's empire was crumbling under financial strain.

Weber scored a deal with Sony Worldwide to release his slate on DVD and pay and free TV, on the strength of the films Weber had lined up: the horror thriller Clock Tower, based on a vidgame; two genre thrillers from Gregor Jordan, Unthinkable, starring Samuel L. Jackson and Sundance premiere The Informers, starring Billy Bob Thornton and Mickey Rourke, which flopped in April release; the long on-the-shelf family drama Fireflies in the Garden, starring Julia Roberts, scheduled for summer release; and the acquisitions Public Enemy Number One, a French gangster pic starring Vincent Cassel; and another long-finished horror film All the Boys Love Mandy Lane, which had been picked up, then dropped, by another struggling indie, The Weinstein Co. Senator also acquired indie Pierce Brosnan drama The Greatest after Sundance. UPDATE: Producers Don Murphy and Susan Montford withdrew their film Splice, starring Adrien Brody and Sarah Polley and produced by Guillermo del Toro, two months ago when signs became unfavorable, sources said.

Weber pre-sells some territories on each title overseas via different sales companies. Sundance acquisition Brooklyn's Finest, an operatic New York cop tragedy directed by Antoine Fuqua and starring Ethan Hawke, Don Cheadle, Richard Gere and Wesley Snipes, also appealed to Sony, which approved and bought into the deal as the seventh film on the Senator slate. Fuqua was re-editing the picture for a fall release on Senator's dime. But with Senator looking for distribution partners and unlikely to stay in the prohibitive release game, many of these titles are going to be up for grabs. UPDATE: Screen reports on where the films are going to go.

The Seattle International Film Festival had to scramble at the last minute when Senator's two-part Public Enemy Number One was pulled. The lab wouldn't let go of the print. Not a good sign, if other pictures are also in hock.

One would hope that distribution veteran Urman had learned a few things along the way; he spun himself out of his Senator contract nine months in. This time he protected himself from twisting in the wind. If there wasn't enough P & A money raised to back a bonafide distribution effort, then he was out. There wasn't.

Here's IndieWire, The Hollywood Reporter and Variety.

Thirteen things to know about Tilda Swinton.

West Slide Story is singing the economy blues.

Confessions of an Old Media Junkie: Ira Deutchman's approach is eerily close to mine. Except that I ingest more online media as well.

Another critic gets moved out of his primary role: "Phil Villarreal was reassigned to General Assignments for the AZ Daily Star's Metro desk today," reports David Poland, who has added posters to MovieCityNews. And Columbus, Ohio is also losing its critic, alas.

David O. Russell's Nailed never got nailed down, Jessica Biel tells The Orlando Sentinel:

"I am a huge David O. Russell fan. It’s just heartbreaking that so many people put so much work into this particular project only to have it sit there, unfinished. But it’s one of those things where we had no idea it would have happened. If I’d had an idea that it might happen, would I still have done it? I don’t know. Probably. I had an incredible experience with David and the rest of the cast. It made me a better actor. For all that, I’m devastated that it’s not finished and who knows when it will be and will come out. I still have my fingers crossed that something good will come of it, that it will be finished."

It was about a year ago that ThinkFilm and Capitol were tangling with David Bergstein as he ran out of funds for a series of movies in production and heading for release. Nailed, which also stars Jake Gyllenhaal, was shut down four times for failing to meet its payroll before it wrapped production in July. Luckily, for Biel, she scores in Stephan Elliott's Easy Virtue as a flamboyant American car racer who tries to win over her husband's finicky British family. Sony Pictures classics will open the film on May 22.

Here's the trailer:

One sure sign that a magazine is in trouble is a constant stream of new publishers. When I was at Premiere, we had three publishers and editors in three years. And the magazine folded not so long after I left. It makes me sick that EW, where I worked before Premiere, is floundering, as evidenced by the departure of its fifth publisher in as many years. Advertising sucks right now, and circulation is dipping too. But the good news is EW's website is thriving and Time Warner says it will keep publishing the mag under new editor Jess Cagle:

Mr. Donaton, previously the editor-turned-publisher of Advertising Age, became EW's fifth publisher in five years when he accepted the vacant job post 17 months ago. He and Rick Tetzeli, then the managing editor, set about a redesign and re-articulation of the mission designed, among other things, to set EW apart from celebrity magazines. He also oversaw an overhaul of EW's website, boosting the number of blogs, videos and the range of community tools. In January, EW named Jess Cagle to succeed Mr. Tetzeli as managing editor.

But, unsurprisingly given a recession that has caused dramatic drop in many consumer magazines' ad revenue, ad-page declines continued after the redesign. EW's first-quarter ad pages this year came in 38% below their mark in the first quarter last year, according to the Publishers Information Bureau. They fell 20% in 2008, Mr. Donaton's first year on the job, after falling 13% in 2007 and 8% in 2006. Paid and verified circulation in the second half of 2008 averaged 1.7 million copies, 1% lower than a year earlier, as paid subscriptions dipped almost 3%, EW reported to the Audit Bureau of Circulations.

I was disturbed when my USC film students--unlike my 19-year-old daughter Nora, btw, who doesn't read newspapers but loves such mags as EW, The Week and Teen Vogue--said they didn't read EW, either online or in print. I still read both.

The weekly should not be stinting, in my view, on what they have to offer over the competition--great reporters who can report the hell out of stories early. The web can handle the fast-breaking stuff--but there is room for depth and context and consolidation in the mag. Why bother to do a spring preview that has 150-word capsules? EW can distinguish itself with the seasonal movie and tv and music previews and hot lists and insider reports. Why is writing shorter the answer in the print edition? I wish EW was more like Premiere and less like People. And I wish the studios would step up their endemic advertising and support it, because I for one don't want to live in an online only world. Magazine covers and gorgeous photo spreads and smart elegant profiles by the likes of Christine Spines set up a movie star unlike anything else.

As the reeling economy puts more pressure on Hollywood's giant conglomerates, and the Internet looms as the ultimate unknown devaluator, The Daily Beast's Kim Masters reports that at some point in time, whether it's sooner or later, General Electric will be forced to unload NBC Universal--no matter how well it's doing--and that Time Warner's Jeffrey Bewkes might not be able to resist buying it:

The main lure for Time Warner meanwhile, would be NBC Universal’s cable channels: USA, Bravo, Sci-Fi, and CNBC. Those would go nicely with Time Warner’s HBO, TNT and TBS. And while no one’s getting rich off news, CNN and NBC News could make a strong combination. Universal Pictures, on the other hand, would likely be folded since Time Warner—which owns Warner Bros.—has no need for another film studio. Yes, that would truly be the end of an era. But industry veterans believe that there’s every reason to expect a number of eras to end in the foreseeable future in the entertainment world, just as big names are vanishing in other industries.

As advertising revenues continue to skid, Reed Business Information announced layoffs of 7 % across all its divisions, plus possible unpaid leaves for staffers. Daily Variety executive editor Michael Speier was among the second round of layoffs at the trade; TV reporter Dan Frankel and New York bureau chief Dade Hayes were also let go. UPDATE: Here's a follow-up from The Wrap.

This year the recession is also hitting the 22-year-old American Pavilion at Cannes. The Americans' home-away-from-home, complete with food bar, computers, mailboxes, panels and the occasional live satellite feed, may run in the red for the first time if founder and director Julie Sisk can't find any sponsors with cash. For the first time, Sisk has no airline partner; former sponsors Apple, Kodak, HP, Cisco, Flip Cam, Access Hollywood and the LAT are all no-gos this year.

While the Am Pav's membership and college film student programs bring in income, without any newspaper or tech sponsors the Pavilion may not be able to break even. Unlike the other national pavilions lined up along the Cannes Croisette, Sisk has always managed the Am Pav without any government backing. Brother, can you spare a dime?

As Fast & Furious does better at the weekend b.o. than it has any right to do--the weekend was up 75-80% from last year-- Entertainment Weekly's Mark Harris sees the first casualty of the recession: ambition. If all audiences want is escape, he worries, that's all the studios and TV networks will give them. "Stop the inanity!" he pleads.

Back in 1940, for example, Twentieth Century Fox acquired the rights to John Steinbeck's great Depression novel The Grapes of Wrath, hired John Ford to direct, Nunnally Johnson to write and Henry Fonda to star as Tom Joad. The results: two Oscar wins (for Ford and Jane Darwell) and money in the bank.

The NYT's Dave Kehr looks some Paramount Depression era DVD releases.

We're reading The Grapes of Wrath for my book group this month. Here's the trailer:

Well, the movie industry doesn't mind that audiences are returning to theaters in droves during a recession. It's obviously good news all around. But David Poland debunks the NYT's recession "hype." While the studios may have been smart enough to not only give the audiences what they want but market the hell out of Paul Blart: Mall Cop and Taken, there's no question that these movies are doing better than they would ordinarily do. And the NYT stat that admissions are up by almost 16% is staggering.

But strong theatrical numbers still don't fix the studios' real bottom line: DVDs sales are down 30 %--mainly from disappointing tentpole titles.

A WGA panel Sunday night addressed these issues and other industry ills, reports John August's blog:

Yes, but movies are doing well, right? Box office receipts are on the up and up.

True, but the motherships (Time Warner/GE etc.) suck out that revenue and use it to prop up other flagging sectors. So that money doesn’t go back into development or the pockets of writers. Also, Navid McIlhargey notes that while theatrical has made a comeback, DVD sales have dropped by roughly 30%. That means four things:

The financial models studios look at before greenlighting a picture are skewed. (Depending on various factors, DVD revenue used to be equal to or greater than domestic theatrical revenue.) The projections for break-even are falling short on movies that might have been easily greenlit a few years ago. One way to counter that is by exploiting the international marketplace, which translates to more big action, (male) star-driven movies.

Long ago and far away, I worked at New York's Film Society of Lincoln Center, brought in by Film Comment editor Richard Corliss to replace Brooks Riley as Associate Editor. This was during the last days of Richard Roud's rein at the New York Film Festival. After I fell in love with frequent FC contributor David Chute, who had taken a new job as second-string film critic to Peter Rainer at the Los Angeles Herald Examiner, I joined my future husband in L.A.--and continued on as Film Comment's west coast editor (while doing various other things) until I joined EW in 1993.

The film society was the classic dysfunctional family. Decisions were made on the basis of Father Roud and Mother Joanne Koch's loyalties and needs, and on how things had always been done. That culture has endured through the years, under Koch and her successors, Film Fest director Richard Pena, and subsequent magazine editors Harlan Jacobson, Richard Jameson and Gavin Smith. Now ex-Hollywood studio exec Mara Manus, who by all accounts ran a tight ship at The Public Theatre, is cleaning house at the Film Society, reports Indiewire, with a recession at her back:

But those familiar with Mara Manus’s six-year tenure at the Public Theater suggest some of the staffing changes may be as much about asserting control as cost cutting.

While her economic track record at the Public has been heralded, nearly doubling the downtown theater institution’s budget and increasing individual support by 270% and subscriber revenue by 134%, Manus reportedly clashed with artistic director Oskar Eustis and was disliked by some staffers for her aloof corporate style, hierarchical approach, and hiring those who shared her views and firing or alienating those that didn’t.

Public Relations director Jeanne Berney moved on soon after the fall NYFF was over. And now people who worked there for decades are being axed, such as arts programmer Joanna Ney and administrator Sayre Maxfield. Out with the old. We'll see about the new.

Diablo Cody is not only the mother of Juno and the many faces of Tara but she has also spawned Jennifer's Body, starring hottie Megan Fox as a possessed mean-girl cheerleader gone very wrong. Think Carrie meets the Attack of the 50 Foot Woman. Karyn Kusama directs, Jason Reitman produces. (EW has a preview in their current issue which I can't find online.) It's due in the fall. UPDATE: And Cody is producing a script with Mason Novick called Breathers: A Zombie's Lament, written by ex-reader Geoff LaTulippe.

Never to waste a moment licking his Oscar wounds, Clint Eastwood talks to The Guardian about Gran Torino and his upcoming Mandela, based on the book by John Carlin. Morgan Freeman will star in the title role.

Trekmovie.com tours the new USS Enterprise. I know the J.J. Abrams movie looks commercial. It may charge up another next generation of fans. But this ship doesn't ring "Trek" to me. Isn't that important here?

An Education's Carey Mulligan is the toast not only of Sundance, but Berlin.

Variety owner Reed Elsevier negotiates to extend its loans.

A lot of folks used to living large at the top of the Hollywood food chain are getting a serious dose of reality these days. Whether it's the plummeting value of stock portfolios or 401Ks or real estate, nobody is as rich as they used to be.

Steven Spielberg, for one, had one of his foundations hit by the Madoff Ponzi scheme. And suddenly the fact that DreamWorks raised $500 million in equity from India's Reliance Big Entertainment doesn't mean quite so much when JPMorgan is struggling to raise the rest of the planned $750 million in today's horrific credit environment.

But it's Steven Spielberg! It doesn't matter. The banks aren't lending to anybody. It's sheer bad luck. That pesky old Paramount deal is probably starting to look cushy indeed.

At the rate DreamWorks is going, Spielberg and Stacey Snider could wind up running another Amblin Entertainment. Here's my story.

Quite a few people in Hollywood, not unlike the soft roly-poly humans in leisure chairs in Wall-E, are going to be unprepared for what's coming: a leaner meaner tougher smaller world.

So the cutbacks continue across the entertainment industry and journalism. It's depressing to watch one's colleagues worry about their jobs as they struggle to survive the brutal combo of the crashing economy and the transition to the Internet.

Nowhere is that more evident than at the LATimes, which is looking to add a new job amid all the downsizing: an entertainment editor capable of wrangling the disparate cultures of the combined Calendar, Business and online staffs. I don't envy that person, whoever it is.

That's because the print people look down on online people, the calendar has an entirely different approach to covering the entertainment industry than the business section--and more than ever there is pressure on everyone to file more and more stories. The Big Picture columnist Patrick Goldstein has adapted to the faster pace of blogging with commendable zeal, but has wrestled with his slower print brethren over stories. In one case, one LAT business writer was furious when Goldstein insisted on going forward on his blog with a story that had been in the works for weeks--and even used their specially created art.

Survival of the fittest right now may favor the fastest.

As the American economy goes to hell in a hand basket, Michael Moore is working on his new still untitled doc. Announced by Overture and Paramount Vantage at Cannes in May as a follow-up to Fahrenheit 9/11, the doc couldn't be more timely. The gadfly who went after General Motors in his breakthrough film Roger and Me is now chasing down the villains of Wall Street and corporate America, the Gordon "greed is Good" Gekkos of the world.

"Its scope is large-scale," he said in Cannes. "It's not a sequel to Fahrenheit 9/11. It's for me the next logical step in a series of films that began with Bowling for Columbine and went through Fahrenheit and now bring me to this particular place... In this film I'm going to take a look at the empire we have created and how did we get there and exactly when are the lights going to be turned out on this empire?"

Here's the full Cannes interview:

In Portfolio, gifted business writer Michael Lewis of The New New Thing fame analyzes the end of the Wall Street boom. (Steve Zaillian is currently adapting Lewis's baseball expose Moneyball: The Art of Winning an Unfair Game, with director David Frankel attached.)

[Illo courtesy Portfolio]

The LA Weekly is cutting staff, including vet columnist Marc Cooper. And Playgirl is shuttering its print operation in favor of online.

The NYT's David Carr does a good job of synthesizing and explaining what's happening to old media. I read the story online.

It's all happening faster than we thought--the economy is pushing change. Here's the LAT on how the cash crunch will hit Hollywood. And here's Time. It's the Internet, stupid.

When the going gets tough....the LAT has set loose film critic Carina Chocano, among the expected 75 staff cuts announced today.

Manohla Dargis was a hard act to follow. When the critic was lured to the NY Times in 2004, the LAT saw fit to move TV critic Chocano over to film, in a classic "anyone can do this" move. Suddenly someone perfectly suited to the TV beat was out of her league and never managed to catch hold on the film side. She did better at feature essays than daily criticism, and was always a strong voice on women's issues. One of her best pieces, not surprisingly, was her Sex and the City review. Here's her LAT gallery of reviews.

Now, to quote from reality-TV jargon, she's out. It's all a game of Survivor in journalism these days.

Here's LAT editor Russ Stanton's letter to the troops:

Colleagues, The growing economic downturn is forcing us to undergo another round of job reductions and cost cuts. I deeply regret to report that today, 75 of our friends, colleagues and capable staff members in Editorial will be told that they are losing their jobs. This is about 10% of our total staff and these cuts are comparable in scale to those made on the business side of The Times last week. The severance terms being offered to our colleagues are similar to those offered in the other reductions we've faced this year. I appreciate your patience, understanding and cooperation during this difficult period. Your department heads and the senior editing team, including John, Davan, Meredith and I, are available to hear your concerns and answer any questions. Russ Stanton Editor Los Angeles Times

With financial pressure from their owners and stock prices in the toilet, there's movement afoot among the major studios. And much speculation. Here's Fortune's frightening story on NBC Universal owner General Electric, always one of the best-run and most solid of American corporations.

Kim Masters addresses Sumner Redstone's problems with the plummeting stock value of his companies Viacom and CBS. Some people think that the mogul, who's looking vulnerable (and just announced his divorce from his wife), should put the two companies he split, Viacom and CBS, back together again. UPDATE: Redstone swears to the WSJ that there's "not a chance" he will sell any more stock in Viacom or CBS. "I will not sell Viacom and I will not sell CBS. They're two great companies." He added: "We have no intention to sell any more stock and I'm decisive about that."

Loved the LAT's lede on their story about the rapacious Carl Icahn, who's buying up low-priced shares in Lionsgate as he ogles their massive library: "The barbarian is at the gate." There's also speculative talk of debt-ridden MGM being for sale as well, and of an MGM/Lionsgate merger.

Universal is in talks to unload its Rogue genre unit to buccaneer financeer Ryan Kavanaugh's Relativity Media for $150 million. They'll pocket the cash on their three-year investment and still collect a 10% distribution fee.

While I appreciate the shoutout from Patrick Goldstein, he's reporting uninformed speculation that because other latecomer studio specialty units have been downsized or shut down, or Jeff Zucker is calling for $500 million in cuts across all of NBC Universal, that must mean that Universal's Focus Features, which launched Rogue, is next on the cutting block.

That Universal is also going to unload Focus is far from obvious. The subsid has a huge international business; as much PR as Fox Searchlight deservedly enjoys, thanks to overseas business, Focus is just as profitable. In Bruges and Burn After Reading are two 2008 worldwide hits for the label. Universal execs flatly deny that they have any intention of selling the unit.

And closer to home, Peter Bart reflects on the dwindling number of full-on studio Oscar campaigns this year. In a climate where the studios are really up against their bottom lines, for once they may not have to indulge every vanity awards campaign that ordinarily would have been business as usual. Nothing these days, as many hurting Hollywood folks can testify, is business as usual.

Holy Cow! NBC Universal's Jeff Zucker is calling for $500 million in budget cuts in 2009 at each division's discretion. "There must be a lot of executives over there sweating," said one producer. NBC Universal had a good year, but owner General Electric is always looking at the numbers. Here's Variety's story.

With Paramount pushing two pics into 2009, and announcing a 20-pic scaled back 2009 release schedule, expect other studio cutbacks going forward. But one thing remains true about the movie business: the studios have to keep making and releasing movies. And watching spending can be a good thing. But layoffs--that's scary.

I asked one studio marketing chief at lunch today if we should expect the studios to spend less on marketing. The answer was no.

Here's Variety's story: Will Showbiz Hit the Skids? And my column on reducing star salaries.

"We're in the money," sang Ginger Rogers in the escapist musical Gold Diggers of 1933. Luxurious Busby Berkeley musical comedies were big hits during the Depression.

It will be interesting to see how Hollywood calibrates the current economic crisis in terms of the movies they will make. Warners' $100-million CIA thriller Body of Lies proved to be too downbeat and Iraq-centric to lure mass audiences. The opening was decidedly weaker than it should have been. (Here's Variety's weekend boxoffice wrap.) As a counter-example, this summer's escapist musical Mamma Mia! scored big all over the world: it's global gross is $520 million. If I were a studio head I'd start greenlighting a bunch of light escapist movies--fantasies, musicals, comedies, romances. The NYT's David Carr checks in with some studio execs.

It's no longer a given that people will flock to the movies during an economic downturn. (Boxoffice has been steady, BTW, and was up 18% this weekend.) Back in the Depression there was no entertainment competition and movies were cheap. Will people still buy $20 DVDs when they're worrying about their frivolous spending? Or rent instead? I argue that given the chance to laugh their heads off and escape into another magical world, they will go out to a movie theater and join in that communal experience. But they won't go there to be depressed further.

In Sullivan's Travels, Preston Sturges took a sincere Hollywood filmmaker (Joel McCrae) and put him on the road with hobos where he learned how much laughing at cartoons means to people. Who's going to be this decade's Marx Brothers or Berkeley? (Check out the Busby Berkeley Disc.) NPR's Bob Mondello looks at the Marx Bros. classic, Duck Soup.

Here are some more examples of what played during the Depression:

We're in the Money:

Jimmy Cagney sings and dances Shanghai Lil in another Berkeley pre-Code classic, Footlight Parade:

And Groucho Marx is Rufus T. Firefly in Duck Soup:

On AMC's Shootout this week, Peter Guber and Peter Bart address the issue of whether audiences will support the crop of political movies coming up, including W. They talk to Oliver Stone and James Cromwell:

As the Dow Industrials continue to plummet, Hollywood speculation centers on the fiscal health of the studios, whose owners have been suffering huge losses in stock value. While most of the majors seem stable, many wonder if MGM, the only studio carrying huge debt, will be able to roll over its 3.7 billion loan by the time it comes due in 2012. Even if the MGM/Sony release Quantum of Solace kicks ass at the boxoffice this fall, can MGM afford to finance another James Bond movie? For now, they have production funds to greenlight a slate of movies, including $500 million in UA money, reports Marc Graser.

"Even if they make ten James Bond movies they won't make enough money," warns one Hollywood insider. "Who will they find to lend them $3 1/2 billion? There's no credit out there at all. It's astounding."

Observers were waiting to see how General Electric would fare in its quarterly report; standout NBC Universal, which doesn't fit neatly into the GE family, continues to perform strongly.

Viacom and CBS lowered their third quarter earnings outlook on Friday. While some Wall Street analysts think that Viacom should sell Paramount, as long as one-time exhibitor Sumner Redstone is in charge of his studio trophy (hard-won in a duel of the titans with Barry Diller), it's unlikely that he would let it go. He is, however, planning to sell some $400 million shares of National Amusements non-voting stock to pay down debt. Here's the LAT and Variety.