Do you still want to come to Hollywood and be in the entertainment business?

As evidenced by Disney’s recent firing of its studio chief, Dick Cook, and Universal Pictures’ dismissal Monday of chairmen Marc Shmuger and David Linde, Hollywood is in a state of panic-producing turmoil.

It used to be that Hollywood’s corporate parents could stomach a dry spell from their studio managers. But as DVD sales have collapsed by as much as 25% at some studios, access to outside financing has vanished and production and marketing costs remain sky-high, media companies are cracking under all the pressure.

As the lineup of newly elevated studio executives scramble for solutions, expect an even greater emphasis on so-called “branded entertainment”: sequels and movies based on toys, old television shows and other familiar themes. Movies already in development include one based on the View-Master children’s toy and an adaptation of the board game Battleship, scheduled for release July 2011, the same month as a third “Transformers” film. There also will likely be far fewer adult dramas and less reliance on movie stars — many of whom can no longer draw ticket buyers, and are seeing their guaranteed salaries slashed.

“You’re not going to get away with the old business model,” said Hal Vogel, an entertainment industry analyst who runs Vogel Capital Management. “They still haven’t found a new business model to replace the old one.” (more…)