For Movie Producers, a Golden Age Fades

Life is harder for producers in the new, tightfisted Hollywood.

The number of on-the-lot deals has fallen 52% since 2000. Average spending on each producer deal has also dropped sharply, say studio executives. And houses aren't being built for anyone. Funding in Hollywood's flush days came in large part from booming DVD sales, which peaked in 2004. Consumers were so willing to pick up a disc on their way out of Wal-Mart or Target that even box-office flops often ended up profitable. Now, thanks to cheap options such as Netflix and Redbox, home-entertainment revenue at studios is off about 40%, executives say, and it is easy to lose money on a movie. Studios have responded in two ways. All have cut their slates of new pictures. The six major studios released 120 movies in 2013, compared with 204 in 2006. They also have sought to slash spending—and nobody has felt the brunt as much as producers. "It's not something you'd want your son to be these days," says Michael Lobell, the producer of "Striptease" and "Honeymoon in Vegas."