This post escaped into the wild half-complete. The version below has now been completed, so it you looked at it earlier and were puzzled why it ended mid-sentence, you may want to look at it again.

James Russell links to this report on Warner Bros. plans to establish an arthouse specialty unit, and comments that he fears the prospect of major studios making arthouse movies.

It is a bit late for that, given that most major studios have specialty units already. Disney owns Miramax (although it is run as an entirely separate studio). Fox runs Fox Searchlight, Sony runs Sony Pictures Classics, New Line runs Fine Line Features. Paramount has a Paramount Classics division, although Paramount isn't a terribly large player in this area. The situation with Universal is terribly complicated, but they also promote specialty films. (Okay, Universal used to run Gramercy in partnership with Polygram, but then they sold their share to Polygram, and bought October films. Then Universal purchased Polygram, and got all of Gramercy back as part of the acquisition. Then, when Barry Diller left universal, he purchased Gramercy and October as part of the deal, and merged them to form USA Films. Then, when acquired by Vivendi, Universal bought back Barry Diller's parent company in order that he return to Universal as an exactutive, and thus USA Films became a subsidiary of Universal again. However, just to confuse matters, it was then merged with Good Machine Entertainment to form Focus Features, which is the present name of the arthouse subsidiary of Universal Got all that? (I wonder if there is anybody who initially worked for Gramacy who has been through all this and is still there). Meanwhile, Vivendi Universal has imploded, so who knows what is happening next). These specialty units have produced or distributed plenty of good films over the years. The majors keep them on because they don't cost all that much and they tend often make films that win awards. That is, they are largely about prestige and ego. Plus, once in a while they produce a breakout hit. ( The Full Monty made so much money for Fox to pay the overhead for Fox Searchlight for decades).

My problem is not with the idea of major studios producing arthouse films, but with Warner Brothers producing arthouse films. Warners are the most bureacratic and lumbering of studios. If the problem with Hollywood is that studios were once owned by people who love movies but they are now owned by bean counters, then Warners is the worst case of this.

For example, over the last few years, we have had something of a resurgence of films based on comics, and given that Warners have exclusive rights to make movies based on DC's properties, by far the richest in the world of comics, one would expect them to make something of this. Instead, most of the successful movies have come from the less rich Marvel universe. Warners have merely been screwing up their most valuable properties. Warners have spent $30 million on a new Superman movie, in which they have managed to hire people, bureacratically interfere with them, rewrite them, thoroughly piss them off, and then either fire them or have them quit in disgust. And what do they have to show for that $30m. No greenlight, no decent script, no confirmed director, and no confirmed actors. They might have well have spent nothing. If you are someone making an independent movie, do you really want to work with these people? Time Warner already have a specialty division in Fine Line Features, which is part of New Line Pictures, which reports to Bob Shaye, the man who greenlit The Lord of the Rings . As far as I can see, a much better move would simply be to give Bob more money.

The sad fact though is that Lord of the Rings or no Lord of the Rings, Warner Bros. remains the studio with the influence in Time Warner, and New Line is the poor relation. Therefore, if the egos of the people running Warners require that Warners have specialty division then it will probably get one. And these people are going to continue to run the studio for a while. Warners lucked out by finding itself with the rights to the Harry Potter books, which were virtually impossible to screw up, at least partly because creative control over the movies remained with J.K. Rowling. This has done no end of good for the studio's profitability. And in 2003, Warners are releasing two Matrix sequels, which will be gigantic hits. The first Matrix movie was a hit in spite of the studio rather than because of it: it was produced by Joel Silver and was a co-production with Village Roadshow of Australia. It was as good as it was because the studio wasn't watching. However, the studio has still reaped the profits, and will reap the profits of the sequels. This luck will mean that the studio's finances will look good for at least a couple more years, despite the general dreadfulness of the management of the studio.