Paramount blocks two releases as crunch bites

Paramount Pictures has delayed two major movies as fears grow that even Hollywood may not be immune to the crisis gripping financial markets.

The studio has decided to postpone the release of The Soloist, a drama about a homeless violin player set in Los Angeles, and Defiance, a war picture starring Daniel Craig.

Paramount has made cost cuts of around $60 million (£35 million) so far for 2009.

The Soloist comes from DreamWorks, the Paramount unit whose principals, Steven Spielberg and Stacey Snider, recently left to start a new film company.

The new plan "is definitely responsive to the current economic climate", Rob Moore, vice chairman of Paramount told the Wall Street Journal.

He said the plan had been on the agenda for some time but had been delayed while the DreamWorks deal was being finalised.

"We now have a new strategy that wasn't possible before the DreamWorks deal was concluded," Moore said. "We couldn't engage in long-term planning because there was a big variable blocking that process."

Spielberg and Snider could independently put into production up to eight films a year without Paramount approval, limiting the room to cut the number of releases a year.

While conventional wisdom suggests that the film industry is recession-proof, Hollywood is likely to reduce the niche films it makes.

Even before the financial crisis the industry was battening down the hatches.

The axe has fallen on the studio's "specialty" divisions that make smaller release films.