The
Hollywood Economist
The numbers behind the industry.
The
78 th Academy Awards, with its scripted speeches by stars,
tearful acceptances, eulogies, red-carpet celebrity fashion
show, and gold-dipped statuettes, has the same mission that
it did when Louis B. Mayer convinced the other studio moguls
to create the event in 1927: "establish the industry in
the public's mind as a respectable institution." Now, televised
by ABC in dazzling high-definition color, the evening-long
informational will further the long-standing myth that Hollywood
is in the business of making great—and original—movies.
This
illusion, like all successful deceptions, requires misdirecting
the audience's attention from reality to a few brilliant
aberrations. Take this year's Best Picture nominations:
Brokeback Mountain , Capote , Crash , Munich , and Good
Night, and Good Luck . What all of these films
have in common is that they have virtually nothing to do
with the real business of the Hollywood studios. For Hollywood
to choose them as a public display of its virtue is almost
as absurd as international oil companies presenting awards
to avant-garde artists who happen to paint in oil. Just
as Exxon, Royal Dutch Shell, and British Petroleum do not
make their living from oil paint (which, after all, is typically
not made from crude), Hollywood studios do not make money
from producing (or distributing) the occasional art or social-commentary
movie.
In
fact, the movie business is no longer about making movies.
It is about creating properties—including TV programs, cartoons,
videos, and games—that can serve as licensing platforms
for a multitude of markets. For the first 20 years of the
Academy Awards, the movie business was entirely about movies.
Two-thirds of Americans went to a movie in an average week,
and all the studios' earnings came from the proceeds of
the tickets sold at movie houses. But that was "BT," before
the advent of television in the late 1940s. Once people
could watch sports, game shows, and movies at home for free,
most of the habitual audience disappeared. By the late 1970s,
U.S. movie theaters, which had sold 4.8 billion tickets
in 1948, sold only 1 billion. Hollywood, on the verge of
financial ruin, had no choice but reinvent itself.
The
studios simply followed their audiences home. To do this,
they first repackaged the movies shown at theaters Pied
Piper-style by making movies that visually appealed mainly
to children and teenagers and then recycled them into home
products, including DVDs, TV shows, games, and toys, which,
in 2005, produced more than 86 percent of their revenues.
In this business model, alas, art, literary, and social-commentary
movies are marginalized, since they cannot be either turned
into licensing franchises or used to lure huge opening-week
audiences to theaters. (Even Steven Spielberg's Munich
attracted only a trickle—less than 1 million people—in
its opening week compared with the flood—17 million people—for
the opening of George Lucas' Star Wars: Episode 3 —
Revenge of the Sith .) And, as satisfying as these
art films may be to directors, writers, actors, and producers,
they do not lend themselves to sequels, prequels, or other
licensable properties. They do, however, perform one function
very well: acting as decoys at Hollywood's annual celebration
of itself.
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