Steven Spielberg and his friends at movie studio Dreamworks are in the process of raising $500 million to $600 million from India’s Reliance ADA Group. Dreamworks is now part of the Paramount operations of Sumner Redstone’s Viacom (VIA).

According to The Wall Street Journal, "The film industry has been closely monitoring the fate of the 61-year-old Mr. Spielberg and partner David Geffen, co-founders of DreamWorks SKG."

Whether it was a faux pas or an intentional statement, Sumner Redstone’s puppet CEO at Viacom, Philippe Dauman, said that Dreamworks was "completely immaterial" when it came to the parent company’s financial future.

Dauman may be right. Big movies still make money, sometimes a lot of it. But, budgets for blockbusters can run close to $200 million, which makes them risky. Pay-per-view and DVD sales help offset that. But, films are pirated on file-sharing services and in countries like China and Russia, so the film business is not what it once was.

Recent research from comScore shows that Americans watched 11 billion videos online in April. Even if each video is short, that eats up a lot of time. People can only watch so much. Then their eyes fall out of their heads.

Most analysts think that online operations like YouTube, which make up most of the internet video content, can’t make money. Big advertisers like Procter & Gamble and GM don’t want their nice marketing messages next to videos of farting preachers. Who can blame them? But, that is what people spend their time watching.

The YouTube viewer may be a buffoon, but he is a buffoon in the majority, watching those 11 billion videos. He can’t make it to the movies. Where will he find the time? Spielberg can leave Viacom. He is too expensive to keep.

Douglas A. McIntyre

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